Document:

exhibit10-1.htm

    
      
         

      

      
         

        
          

        

      

      
         

        
          EXHIBIT
10.1

        

      

    

    

    

    

    

    OPERATING
AGREEMENT

     

    OF

     

    1850
DE LA CRUZ LLC,

     

    a
California limited liability company

     

    

    

    

    

    ===================================================================

    THE
INTERESTS (AS DEFINED BELOW) HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAVE THEY BEEN
REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.  THE
INTERESTS HAVE BEEN ISSUED AND SOLD PURSUANT TO AN EXEMPTION FROM THE SECURITIES
ACT OF 1933, AS AMENDED AND THE SECURITIES LAWS OF THE VARIOUS
STATES.  THE INTERESTS MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS QUALIFIED AND REGISTERED UNDER
APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE MANAGER (AS DEFINED BELOW), SUCH QUALIFICATION AND
REGISTRATION ARE NOT REQUIRED.  ANY TRANSFER OF THE INTERESTS IS
FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH
IN THIS OPERATING AGREEMENT.

    ===================================================================

    

    

    
      
        
          587048 v8/SD 

        

         

      

      
         

        
          

        

      

      
         

        
          Table
of Contents

          

          Page

           

          

        

      

    

    
      	
               
      

            	
              ARTICLE
      1           
      FORMATION                                                                                                                                                                                                                                        
      1

            

    

     

    
      	
               
      

            	
              1.1

            	
              Recitals 

            	
              1

            

    

     

    
      	
               
      

            	
              1.2

            	
              Formation 

            	
              1

            

    

     

    
      	
               
      

            	
              1.3

            	
              Name 

            	
              2

            

    

     

    
      	
               
      

            	
              1.4

            	
              Principal
      Place of Business; Statutory Office and Agent 

            	
              2

            

    

     

    
      	
               
      

            	
              1.5

            	
              Term 

            	
              2

            

    

     

    
      	
               
      

            	
              ARTICLE
      2           
      PURPOSES                                                                                                                                                                                                                                            
      2

            

    

     

    
      	
               
      

            	
              2.1

            	
              Permitted
      Businesses and Activities 

            	
              2

            

    

     

    
      	
               
      

            	
              ARTICLE
      3           
      MEMBERS AND
      CONTRIBUTIONS                                                                                                                                                                                               
      2

            

    

     

    
      	
               
      

            	
              3.1

            	
              Identity
      of Members 

            	
              2

            

    

     

    
      	
               
      

            	
              3.2

            	
              Classes
      of Members 

            	
              2

            

    

     

    
      	
               
      

            	
              3.3

            	
              Initial
      Capital Contributions 

            	
              2

            

    

     

    
      	
               
      

            	
              3.4

            	
              Liability
      of Members; Interest on and Return of Capital Contribution; Priority and
      Return of Capital 

            	
              4

            

    

     

    
      	
               
      

            	
              3.5

            	
              Loans 

            	
              4

            

    

     

    
      	
               
      

            	
              3.6

            	
              Guarantee
      of Debt or Liabilities 

            	
              4

            

    

     

    
      	
               
      

            	
              3.7

            	
              No
      Admission of New Member 

            	
              4

            

    

     

    
      	
               
      

            	
              3.8

            	
              Additional
      Capital Contributions 

            	
              4

            

    

     

    
      	
               
      

            	
              ARTICLE
      4           
      DISTRIBUTIONS AND
      ALLOCATIONS                                                                                                                                                                                        7

            

    

     

    
      	
               
      

            	
              4.1

            	
              Distributions 

            	
              7

            

    

     

    
      	
               
      

            	
              4.2

            	
              Allocation
      of Profits and Losses 

            	
              8

            

    

     

    
      	
               
      

            	
              ARTICLE
      5           
      MANAGEMENT RIGHTS AND
      DUTIES                                                                                                                                                                                          
      8

            

    

     

    
      	
               
      

            	
              5.1

            	
              Number
      and Tenure 

            	
              8

            

    

     

    
      	
               
      

            	
              5.2

            	
              Management 

            	
              8

            

    

     

    
      	
               
      

            	
              5.3

            	
              Resignation,
      Termination, Removal, and Vacancies 

            	
              10

            

    

     

    
      	
               
      

            	
              5.4

            	
              Liability
      for Certain Acts 

            	
              10

            

    

     

    
      	
               
      

            	
              5.5

            	
              Indemnity
      by Company 

            	
              11

            

    

     

    
      	
               
      

            	
              5.6

            	
              Expenses 

            	
              12

            

    

     

    
      	
               
      

            	
              5.7

            	
              Payment
      of Fees to Manager 

            	
              12

            

    

     

    
      	
               
      

            	
              5.8

            	
              No
      Exclusive Duty; Other Business and Activities; Competitive
      Activities 

            	
              12

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              5.9

            	
              Transactions
      Between the Company and the Manager 

            	
              12

            

    

     

    
      	
               
      

            	
              5.10

            	
              Bank
      Accounts 

            	
              13

            

    

     

    
      	
               
      

            	
              5.11

            	
              Meetings 

            	
              13

            

    

     

    
      	
               
      

            	
              5.12

            	
              Appointment
      of Officers 

            	
              13

            

    

     

    
      	
               
      

            	
              5.13

            	
              Ownership 

            	
              13

            

    

     

    
      	
               
      

            	
              5.14

            	
              Authority
      as to Third Persons 

            	
              13

            

    

     

    
      	
               
      

            	
              5.15

            	
              Safe
      Harbor Election and Forfeiture Allocations 

            	
              13

            

    

     

    
      	
               
      

            	
              ARTICLE
      6           
      ACCOUNTING, TAX MATTERS AND
      REPORTS                                                                                                                                                                     
      14

            

    

     

    
      	
               
      

            	
              6.1

            	
              Tax
      Matters Partner 

            	
              14

            

    

     

    
      	
               
      

            	
              6.2

            	
              Accounting
      Principles 

            	
              14

            

    

     

    
      	
               
      

            	
              6.3

            	
              Returns 

            	
              14

            

    

     

    
      	
               
      

            	
              6.4

            	
              Records
      and Reports 

            	
              14

            

    

     

    
      	
               
      

            	
              6.5

            	
              Access
      to Records 

            	
              15

            

    

     

    
      	
               
      

            	
              ARTICLE
      7            RIGHTS
      AND OBLIGATIONS OF
      MEMBERS                                                                                                                                                                            15

            

    

     

    
      	
               
      

            	
              7.1

            	
              Limitation
      of Liability 

            	
              15

            

    

     

    
      	
               
      

            	
              7.2

            	
              Indemnity
      by Company 

            	
              16

            

    

     

    
      	
               
      

            	
              7.3

            	
              Other
      Business and Activities; Competitive Activities 

            	
              16

            

    

     

    
      	
               
      

            	
              7.4

            	
              Restrictions
      on Member 

            	
              16

            

    

     

    
      	
               
      

            	
              7.5

            	
              Voting 

            	
              16

            

    

     

    
      	
               
      

            	
              7.6

            	
              Meetings 

            	
              17

            

    

     

    
      	
               
      

            	
              7.7

            	
              Environmental
      Work 

            	
              19

            

    

     

    
      	
               
      

            	
              7.8

            	
              Buy/Sell
      Right 

            	
              19

            

    

     

    
      	
               
      

            	
              7.9

            	
              Operations
      in Pre-Closing Period 

            	
              21

            

    

     

    
      	
               
      

            	
              ARTICLE
      8           
      TRANSFERS                                                                                                                                                                                                                                       
      21

            

    

     

    
      	
               
      

            	
              8.1

            	
              Transfers
      of Member Interest 

            	
              21

            

    

     

    
      	
               
      

            	
              8.2

            	
              Permitted
      Transfer 

            	
              23

            

    

     

    
      	
               
      

            	
              8.3

            	
              Non-Permitted
      Transfer on Death or Trustee Change 

            	
              23

            

    

     

    
      	
               
      

            	
              8.4

            	
              Involuntary
      Transfer (Purchase Option) 

            	
              23

            

    

     

    
      	
               
      

            	
              8.5

            	
              Voluntary
      Transfer (Right of First Offer) 

            	
              25

            

    

     

    
      	
               
      

            	
              8.6

            	
              Transfer
      Notice 

            	
              26

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              8.7

            	
              Assignees
      Versus Substitute Members 

            	
              26

            

    

     

    
      	
               
      

            	
              8.8

            	
              Further
      Restrictions; Invalid Restrictions 

            	
              27

            

    

     

    
      	
               
      

            	
              8.9

            	
              Deceased
      Transferor or Changed Trustee 

            	
              27

            

    

     

    
      	
               
      

            	
              8.10

            	
              Election
      to Adjust Basis 

            	
              28

            

    

     

    
      	
               
      

            	
              ARTICLE
      9           
      DISSOLUTION                                                                                                                                                                                                                                   
      28

            

    

     

    
      	
               
      

            	
              9.1

            	
              Dissolution 

            	
              28

            

    

     

    
      	
               
      

            	
              9.2

            	
              Effect
      of Dissolution Event 

            	
              28

            

    

     

    
      	
               
      

            	
              9.3

            	
              Distribution
      of Assets upon Dissolution 

            	
              28

            

    

     

    
      	
               
      

            	
              9.4

            	
              Filing
      of Certificate of Cancellation 

            	
              29

            

    

     

    
      	
               
      

            	
              9.5

            	
              Winding
      Up 

            	
              30

            

    

     

    
      	
               
      

            	
              9.6

            	
              Allocations
      Upon Dissolution 

            	
              30

            

    

     

    
      	
               
      

            	
              9.7

            	
              No
      Action for Dissolution 

            	
              30

            

    

     

    
      	
               
      

            	
              9.8

            	
              Merger 

            	
              30

            

    

     

    
      	
               
      

            	
              ARTICLE
      10           INVESTOR
      PROVISIONS                                                                                                                                                                                                              31

            

    

     

    
      	
               
      

            	
              10.1

            	
              Representations
      and Warranties 

            	
              31

            

    

     

    
      	
               
      

            	
              10.2

            	
              Brokers
      Indemnity 

            	
              35

            

    

     

    
      	
               
      

            	
              10.3

            	
              Indemnity 

            	
              35

            

    

     

    
      	
               
      

            	
              10.4

            	
              Legal
      Representation 

            	
              35

            

    

     

    
      	
               
      

            	
              ARTICLE
      11           
      MISCELLANEOUS
      PROVISIONS                                                                                                                                                                                              
      36

            

    

     

    
      	
               
      

            	
              11.1

            	
              Notices 

            	
              36

            

    

     

    
      	
               
      

            	
              11.2

            	
              Enforcement
      and Attorney’s Fees 

            	
              36

            

    

     

    
      	
               
      

            	
              11.3

            	
              Dispute
      Resolution 

            	
              37

            

    

     

    
      	
               
      

            	
              11.4

            	
              Choice
      of Law 

            	
              38

            

    

     

    
      	
               
      

            	
              11.5

            	
              Jurisdiction 

            	
              38

            

    

     

    
      	
               
      

            	
              11.6

            	
              Signer’s
      Warranty 

            	
              39

            

    

     

    
      	
               
      

            	
              11.7

            	
              Waiver
      of Action for Partition 

            	
              39

            

    

     

    
      	
               
      

            	
              11.8

            	
              Amendments 

            	
              39

            

    

     

    
      	
               
      

            	
              11.9

            	
              Waivers 

            	
              39

            

    

     

    
      	
               
      

            	
              11.10Rights
      and Remedies
      Cumulative                                                                                                                                                                                                                                      
             
39

            

    

     

    
      	
               
      

            	
              11.11Time
      and
      Days                                                                                                                                                                                                                                                                             
      40

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              11.12Additional
      Documents and
      Acts                                                                                                                                                                                                                                              
      40

            

    

     

    
      	
               
      

            	
              11.13Heirs,
      Successors, and
      Assigns                                                                                                                                                                                                                                                
      40

            

    

     

    
      	
               
      

            	
              11.14Parties
      in Interest; No Third Party
      Beneficiaries                                                                                                                                                                                                                     
      40

            

    

     

    
      	
               
      

            	
              11.15Counterparts                                                                                                                                                                                                                                                                                 
      40

            

    

     

    
      	
               
      

            	
              11.16Severability
      of
      Provisions                                                                                                                                                                                                                                                          
      40

            

    

     

    
      	
               
      

            	
              11.17Complete
      Agreement                                                                                                                                                                                                                                                                  
      40

            

    

     

    
      	
               
      

            	
              11.18Appendices,
      Schedules, and
      Exhibits                                                                                                                                                                                                                                     
       40

            

    

     

    
      	
               
      

            	
              11.19Interpretation                                                                                                                                                                                                                                                                               
      41

            

    

     

    
      	
               
      

            	
              11.20Construction                                                                                                                                                                                                                                                                                
      41

            

    

     

    
      	
               
      

            	
              11.21Headings                                                                                                                                                                                                                                                                                      
      41

            

    

     

    
      	
               
      

            	
              11.22Statutes                                                                                                                                                                                                                                                                                         
      41

            

    

     

    
      	
               
      

            	
              11.23Cross-References                                                                                                                                                                                                                                                                        
      41

            

    

     

    
      	
               
      

            	
              11.24Consents                                                                                                                                                                                                                                                                                      
      41

            

    

     

    
      	
               
      

            	
              11.25Articles
      in
      Exhibits                                                                                                                                                                                                                                                                      
      41

            

    

     

    
      	
               
      

            	
              ARTICLE
      12            DEFINED
      TERMS                                                                                                                                                                                                                           B-1

            

    

     

    
      	
               
      

            	
              12.1

            	
              “Act” 

            	
              B-1

            

    

     

    
      	
               
      

            	
              12.2

            	
              “Adjusted
      Capital Account Balance” 

            	
              B-1

            

    

     

    
      	
               
      

            	
              12.3

            	
              “Affiliate” 

            	
              B-1

            

    

     

    
      	
               
      

            	
              12.4

            	
              “Agreement” 

            	
              B-1

            

    

     

    
      	
               
      

            	
              12.5

            	
              “Arbitration
      Notice” 

            	
              B-1

            

    

     

    
      	
               
      

            	
              12.6

            	
              “Arbitrator” 

            	
              B-1

            

    

     

    
      	
               
      

            	
              12.7

            	
              “Assignee” 

            	
              B-1

            

    

     

    
      	
               
      

            	
              12.8

            	
              “Avis
      Lease” 

            	
              B-2

            

    

     

    
      	
               
      

            	
              12.9

            	
              “Bad
      Act” 

            	
              B-2

            

    

     

    
      	
               
      

            	
              12.10        “Bankruptcy”                                                                                                                                                                                                                                                               
            
B-2

            

    

     

    
      	
               
      

            	
              12.11        “Business
      Day”                                                                                                                                                                                                                                                                  
      B-2

            

    

     

    
      	
               
      

            	
              12.12       
      “Buy/Sell
      Amount”                                                                                                                                                                                                                                                            
      B-2

            

    

     

    
      	
               
      

            	
              12.13       
      “Buy/Sell
      Notice”                                                                                                                                                                                                                                                               
      B-2

            

    

     

    
      	
               
      

            	
              12.14       
      “Buy/Sell
      Offeree”                                                                                                                                                                                                                                                             
      B-2

            

    

     

    
      	
               
      

            	
              12.15      
      “Buy/Sell
      Offeror”                                                                                                                                                                                                                                                              
      B-3

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              12.16“Buy/Sell
      Right”                                                                                                                                                                                                                                                                        
      B-3

            

    

     

    
      	
               
      

            	
              12.17“Capital
      Account”                                                                                                                                                                                                                                                                     
      B-3

            

    

     

    
      	
               
      

            	
              12.18“Capital
      Contribution”                                                                                                                                                                                                                                                              
      B-4

            

    

     

    
      	
               
      

            	
              12.19“Capital
      Notice”                                                                                                                                                                                                                                                                         
      B-4

            

    

     

    
      	
               
      

            	
              12.20“Certificate
      of
      Formation”                                                                                                                                                                                                                                                         B-4

            

    

     

    
      	
               
      

            	
              12.21“Closing”                                                                                                                                                                                                                                                                                    
      B-4

            

    

     

    
      	
               
      

            	
              12.22“Code”                                                                                                                                                                                                                                                                                        
      B-4

            

    

     

    
      	
               
      

            	
              12.23“Company”                                                                                                                                                                                                                                                                                
      B-4

            

    

     

    
      	
               
      

            	
              12.24“Company
      Minimum
      Gain”                                                                                                                                                                                                                                                     
      B-4

            

    

     

    
      	
               
      

            	
              12.25“Contributed
      Property”                                                                                                                                                                                                                                                           
      B-4

            

    

     

    
      	
               
      

            	
              12.26“Contributing
      Members”                                                                                                                                                                                                                                                         
      B-4

            

    

     

    
      	
               
      

            	
              12.27“Deceased
      Member or Changed
      Trustee”                                                                                                                                                                                                                            
      B-4

            

    

     

    
      	
               
      

            	
              12.28“Depreciation”                                                                                                                                                                                                                                                                           
      B-4

            

    

     

    
      	
               
      

            	
              12.29“Disability”                                                                                                                                                                                                                                                                                
      B-4

            

    

     

    
      	
               
      

            	
              12.30“Dispute”                                                                                                                                                                                                                                                                                   
      B-4

            

    

     

    
      	
               
      

            	
              12.31“Dispute
      Notice”                                                                                                                                                                                                                                                                      
      B-4

            

    

     

    
      	
               
      

            	
              12.32“Dispute
      Parties”                                                                                                                                                                                                                                                                      
      B-5

            

    

     

    
      	
               
      

            	
              12.33“Dissolution
      Event”                                                                                                                                                                                                                                                                 B-5

            

    

     

    
      	
               
      

            	
              12.34“Distributable
      Cash”                                                                                                                                                                                                                                                               
      B-5

            

    

     

    
      	
               
      

            	
              12.35“Economic
      Interest”                                                                                                                                                                                                                                                                
      B-5

            

    

     

    
      	
               
      

            	
              12.36“Effective
      Date”                                                                                                                                                                                                                                                                       
      B-5

            

    

     

    
      	
               
      

            	
              12.37“Entity”                                                                                                                                                                                                                                                                                      B-5

            

    

     

    
      	
               
      

            	
              12.38“Entity
      CPA”                                                                                                                                                                                                                                                                            
      B-5

            

    

     

    
      	
               
      

            	
              12.39“Environmental
      Work”                                                                                                                                                                                                                                                           
      B-5

            

    

     

    
      	
               
      

            	
              12.40“Environmental
      Work Completion
      Date”                                                                                                                                                                                                                            
      B-5

            

    

     

    
      	
               
      

            	
              12.41“Escrow
      Holder”                                                                                                                                                                                                                                                                      
      B-5

            

    

     

    
      	
               
      

            	
              12.42“Excess
      Company
      Loan”                                                                                                                                                                                                                                                       
      B-5

            

    

     

    
      	
               
      

            	
              12.43“Excess
      Member
      Loan”                                                                                                                                                                                                                                                          
      B-5

            

    

     

    
      	
               
      

            	
              12.44“Excess
      Member Loan
      Payments”                                                                                                                                                                                                                                        
      B-5

            

    

     

    
      	
               
      

            	
              12.45“Executive
      Order”                                                                                                                                                                                                                                                                    
      B-5

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              12.46“Fair
      Market
      Value”                                                                                                                                                                                                                                                                
      B-5

            

    

     

    
      	
               
      

            	
              12.47“Financing”                                                                                                                                                                                                                                                                              
      B-6

            

    

     

    
      	
               
      

            	
              12.48“Fiscal
      Year”                                                                                                                                                                                                                                                                             
      B-6

            

    

     

    
      	
               
      

            	
              12.49“Gross
      Asset
      Value”                                                                                                                                                                                                                                                               
      B-6

            

    

     

    
      	
               
      

            	
              12.50“Interest”                                                                                                                                                                                                                                                                                  
      B-6

            

    

     

    
      	
               
      

            	
              12.51“Involuntary
      Transfer”                                                                                                                                                                                                                                                           
      B-6

            

    

     

    
      	
               
      

            	
              12.52“Involuntary
      Transferor”                                                                                                                                                                                                                                                       
      B-6

            

    

     

    
      	
               
      

            	
              12.53“IRS”                                                                                                                                                                                                                                                                                         
      B-7

            

    

     

    
      	
               
      

            	
              12.54“JAMS”                                                                                                                                                                                                                                                                                     B-7

            

    

     

    
      	
               
      

            	
              12.55“Law
      Firm”                                                                                                                                                                                                                                                                               
      B-7

            

    

     

    
      	
               
      

            	
              12.56“Law
      Firm
      Client”                                                                                                                                                                                                                                                                     B-7

            

    

     

    
      	
               
      

            	
              12.57“Losses”                                                                                                                                                                                                                                                                                   
      B-7

            

    

     

    
      	
               
      

            	
              12.58“Major
      Capital
      Event”                                                                                                                                                                                                                                                            
      B-7

            

    

     

    
      	
               
      

            	
              12.59“Major
      Capital Event
      Proceeds”                                                                                                                                                                                                                                           
      B-7

            

    

     

    
      	
               
      

            	
              12.60“Manager”                                                                                                                                                                                                                                                                               
      B-7

            

    

     

    
      	
               
      

            	
              12.61“Members”                                                                                                                                                                                                                                                                               
      B-7

            

    

     

    
      	
               
      

            	
              12.62“Nanook”                                                                                                                                                                                                                                                                                 
      B-7

            

    

     

    
      	
               
      

            	
              12.63“Non-Permitted
      Transfer on Death or Trustee
      Change”                                                                                                                                                                                                  
      B-7

            

    

     

    
      	
               
      

            	
              12.64“Nonrecourse
      Debt”                                                                                                                                                                                                                                                              
      B-7

            

    

     

    
      	
               
      

            	
              12.65“Non-Transferring
      Member(s)”                                                                                                                                                                                                                                            
      B-7

            

    

     

    
      	
               
      

            	
              12.66“NV
      Manager”                                                                                                                                                                                                                                                                         B-7

            

    

     

    
      	
               
      

            	
              12.67“OFAC”                                                                                                                                                                                                                                                                                   
      B-7

            

    

     

    
      	
               
      

            	
              12.68“Owens”                                                                                                                                                                                                                                                                                  
      B-8

            

    

     

    
      	
               
      

            	
              12.69“Executive
      Order”                                                                                                                                                                                                                                                                   B-8

            

    

     

    
      	
               
      

            	
              12.70“Officer”                                                                                                                                                                                                                                                                                  
      B-8

            

    

     

    
      	
               
      

            	
              12.71“Parties”                                                                                                                                                                                                                                                                                  
      B-8

            

    

     

    
      	
               
      

            	
              12.72“Patriot
      Act”                                                                                                                                                                                                                                                                          
      B-8

            

    

     

    
      	
               
      

            	
              12.73“Patriot
      Act Related
      Laws”                                                                                                                                                                                                                                                 
       B-8

            

    

     

    
      	
               
      

            	
              12.74“Percentage
      Interest”                                                                                                                                                                                                                                                            
      B-8

            

    

     

    
      	
               
      

            	
              12.75“Permitted
      Transfer”                                                                                                                                                                                                                                                              B-8

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              12.76“Permitted
      Transferee”                                                                                                                                                                                                                                                         
      B-8

            

    

     

    
      	
               
      

            	
              12.77“Person”                                                                                                                                                                                                                                                                                  
      B-8

            

    

     

    
      	
               
      

            	
              12.78“Profits”
      or
      “Losses”                                                                                                                                                                                                                                                             
      B-9

            

    

     

    
      	
               
      

            	
              12.79“Property”                                                                                                                                                                                                                                                                              
      B-9

            

    

     

    
      	
               
      

            	
              12.80“Purchase
      and Sale
      Agreement”                                                                                                                                                                                                                                        
      B-9

            

    

     

    
      	
               
      

            	
              12.81“Purchase
      Option”                                                                                                                                                                                                                                                               
      B-9

            

    

     

    
      	
               
      

            	
              12.82“Purchase
      Option
      Buyers”                                                                                                                                                                                                                                                
      B-10

            

    

     

    
      	
               
      

            	
              12.83“Purchase
      Option
      Notice”                                                                                                                                                                                                                                                 
      B-10

            

    

     

    
      	
               
      

            	
              12.84“Purchase
      Option
      Price”                                                                                                                                                                                                                                                   
      B-10

            

    

     

    
      	
               
      

            	
              12.85“Regulatory
      Allocations”                                                                                                                                                                                                                                                 
      B-10

            

    

     

    
      	
               
      

            	
              12.86“Removal
      Event”                                                                                                                                                                                                                                                               
      B-10

            

    

     

    
      	
               
      

            	
              12.87“Required
      Amount”                                                                                                                                                                                                                                                           B-10

            

    

     

    
      	
               
      

            	
              12.88“Required
      Capital”                                                                                                                                                                                                                                                            
      B-10

            

    

     

    
      	
               
      

            	
              12.89“Reserves”                                                                                                                                                                                                                                                                          
      B-10

            

    

     

    
      	
               
      

            	
              12.90“ROFO”                                                                                                                                                                                                                                                                               
      B-10

            

    

     

    
      	
               
      

            	
              12.91“ROFO
      Notice”                                                                                                                                                                                                                                                                 
      B-10

            

    

     

    
      	
               
      

            	
              12.92“Safe
      Harbor
      Election”                                                                                                                                                                                                                                                      
      B-10

            

    

     

    
      	
               
      

            	
              12.93“Securities
      Laws”                                                                                                                                                                                                                                                              
      B-10

            

    

     

    
      	
               
      

            	
              12.94“Shortfall
      Amount”                                                                                                                                                                                                                                                           
      B-10

            

    

     

    
      	
               
      

            	
              12.95“Shortfall
      Capital
      Contributions”                                                                                                                                                                                                                                    B-10

            

    

     

    
      	
               
      

            	
              12.96“Shortfall
      Makeup
      Rights”                                                                                                                                                                                                                                             
      B-10

            

    

     

    
      	
               
      

            	
              12.97“Shortfall
      Member”                                                                                                                                                                                                                                                         
      B-10

            

    

     

    
      	
               
      

            	
              12.98“Shortfall
      Notice”                                                                                                                                                                                                                                                             B-10

            

    

     

    
      	
               
      

            	
              12.99“Substitute
      Member”                                                                                                                                                                                                                                                      
      B-10

            

    

     

    
      	
               
      

            	
              12.100“Target
      Final
      Balances”                                                                                                                                                                                                                                                
      B-10

            

    

     

    
      	
               
      

            	
              12.101“Tax
      Matters
      Partner”                                                                                                                                                                                                                                                    
      B-10

            

    

     

    
      	
               
      

            	
              12.102“Third
      Party
      Price”                                                                                                                                                                                                                                                         
      B-11

            

    

     

    
      	
               
      

            	
              12.103“Transfer”                                                                                                                                                                                                                                                                        
      B-11

            

    

     

    
      	
               
      

            	
              12.104“Transfer
      Interest”                                                                                                                                                                                                                                                         
      B-11

            

    

     

    
      	
               
      

            	
              12.105“Transfer
      Notice”                                                                                                                                                                                                                                                            
      B-11

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              12.106“Transferee”                                                                                                                                                                                                                                                                    
      B-11

            

    

     

    
      	
               
      

            	
              12.107“Transferor”                                                                                                                                                                                                                                                                     B-11

            

    

     

    
      	
               
      

            	
              12.108“Treasury
      Regulations”                                                                                                                                                                                                                                                  B-11

            

    

     

    
      	
               
      

            	
              12.109“Unrecovered
      Capital
      Contributions”                                                                                                                                                                                                                         
      B-11

            

    

     

    
      	
               
      

            	
              12.110“Voluntary
      Transfer”                                                                                                                                                                                                                                                     
      B-11

            

    

     

    
      	
               
      

            	
              12.111“Voting
      Majority”                                                                                                                                           
      B-11

            

    

     

    
      	
               
      

            	
              12.112“Withholding
      Tax
      Deficiency”                                                                                                                                                                                                                                     
      B-11

            

    

     

    
      	
               
      

            	
              ARTICLE
      13    ADDITIONAL TAX
      PROVISIONS                                                                                                                                                                                            
      C-1

            

    

     

    
      	
               
      

            	
              13.1

            	
              Special
      Tax Provisions 

            	
              C-1

            

    

     

    
      	
               
      

            	
              13.2

            	
              Partner
      Nonrecourse Debt 

            	
              C-2

            

    

     

    
      	
               
      

            	
              13.3

            	
              Excess
      Nonrecourse Liabilities 

            	
              C-2

            

    

     

    
      	
               
      

            	
              13.4

            	
              Tax
      Allocations—Interest in the Company; Assignee
    Provisions 

            	
              C-2

            

    

     

    
      	
               
      

            	
              13.5

            	
              Change
      In Interest 

            	
              C-3

            

    

     

    
      	
               
      

            	
              13.6

            	
              Recapture 

            	
              C-3

            

    

     

    
      	
               
      

            	
              13.7

            	
              Code
      Section 704(c); Mandatory Tax Allocations 

            	
              C-3

            

    

     

    
      	
               
      

            	
              13.8

            	
              Capital
      Account Adjustments 

            	
              C-4

            

    

     

    
      	
               
      

            	
              13.9

            	
              Company
      Withholding Obligations 

            	
              C-4

            

    

     

    
      	
               
      

            	
              13.10Allocation
      Provisions BindingC-5

            

    

     

    

    
      
        
          
            	
                    587048 v8/SD
    

                  	
                    --

                  	 
      

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Page
Where

    First
Referenced

     

    
      	
               
      

            	
              EXHIBIT
      “A” – INITIAL CAPITAL CONTRIBUTIONS; INITIAL CAPITAL ACCOUNTS; AND INITIAL
      PERCENTAGE INTERESTS2

            

    

     

    
      	
               
      

            	
              EXHIBIT
      “B” - ARTICLE 12 DEFINED
  TERMS1

            

    

     

    
      	
               
      

            	
              EXHIBIT
      “C” - ARTICLE 13 ADDITIONAL TAX
      PROVISIONS42

            

    

     

    
      	
               
      

            	
              EXHIBIT
      “D” - ASSIGNMENT, ACCEPTANCE OF ASSIGNMENT AND AGREEMENT TO BE BOUND, AND
      CONSENT TO ASSIGNMENT27

            

    

     

    
      	
               
      

            	
              INDEX
      OF DEFINED TERMS

            

    

     

     

    

    
      
        
          587048 v8/SD 

        

         

      

      
         

        
          

        

      

      
         

      

    

    OPERATING
AGREEMENT

     

    OF

     

    1850
DE LA CRUZ LLC,

     

    a
California limited liability company

     

    THIS
OPERATING AGREEMENT (this “Agreement”)
is entered into as of July 16, 2008 (the “Effective
Date”), among NV MANAGER, LLC, a California
limited liability company (“NV
Manager”), OWENS MORTGAGE INVESTMENT FUND, a California limited
partnership (“Owens”),
and NANOOK VENTURES LLC, a Delaware limited liability company (“Nanook”),
who hereby agree as follows.  Each capitalized but undefined term used
in this Agreement is defined in Article 12 of
attached Exhibit “B”.

     

    ARTICLE
1                                

     

    

     

    FORMATION

     

    1.1 Recitals.  This
Agreement is made with reference to the following recital of essential
facts:

     

    (a) Purchase and Sale
Agreement.  Owens, as seller, and Nanook, as buyer, are parties
to the Purchase and Sale Agreement dated July 24, 2007 (as amended and
assigned, the “Purchase and Sale
Agreement”) with respect to the Property.  For the reasons set
forth below, and for other reasons, the Parties are entering into this Agreement
as a replacement for the “Closing” under the Purchase and Sale Agreement (the
“Closing”),
except that all of Owens’ obligations and liabilities under the Purchase and
Sale Agreement that would have survived the Closing (if it had occurred under
the Purchase and Sale Agreement) shall survive the execution of this Agreement
and shall be fully binding on Owens as if the Closing had occurred under the
Purchase and Sale Agreement.

     

    (b) Environmental
Remediation.  During the course of due diligence under the
Purchase and Sale Agreement, it was discovered that the Property is contaminated
and that remediation and monitoring are required.  After the Closing,
Owens shall continue to be responsible for such remediation and monitoring, as
more fully set forth below.

     

    (c) Avis Lease.  In
contemplation of a possible Closing under the Purchase and Sale Agreement,
Nanook previously entered into a lease with Avis Rent a Car System, LLC, with
respect to a portion of the Property (the “Avis
Lease”).  The Parties intend that Nanook assign the Avis Lease
to the Company, as more fully set forth below.

     

    1.2 Formation.  Pursuant
to the Act, the Manager and the Members have caused to be formed a limited
liability company under the laws of the State of California by filing the
Certificate of Formation with the California Secretary of State and entering
into this Agreement.  The rights and liabilities of the Manager and
the Members shall be determined pursuant to the Act and this
Agreement.  To the extent that the rights or obligations of any Member
or Manager are different by reason of any provision of this Agreement than they
would be in the absence of such provision, this Agreement shall, to the extent
permitted by the Act, control.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    1.3 Name.  The Company
shall conduct its activities under the name 1850 De La Cruz LLC” or, upon
compliance with applicable laws, any other name deemed appropriate or advisable
by the Manager.

     

    1.4 Principal Place of Business;
Statutory Office and Agent.  The Company may locate its
principal place of business at any place or places, within or without the State
of California, as the Manager may from time to time deem advisable; provided,
however, that the Company shall at all times maintain within the State of
California a
registered agent and a registered office.  Such initial agent and
office are stated in the Certificate of Formation.  The Manager shall
cause the Company to be registered and qualified at all relevant times to do
business in any state in which such registration and qualification is deemed
necessary or advisable by the Manager.

     

    1.5 Term.  The existence
of the Company commenced upon the filing with the California Secretary of State
of the Certificate of Formation, and shall continue without dissolution until
dissolved as hereinafter provided.

     

    ARTICLE
2                                

     

    

     

    PURPOSES

     

    2.1 Permitted Businesses and
Activities.  The purposes of the Company shall be to engage in
any or all of the following businesses and activities:

     

    (a) Property.  To
obtain, develop, operate, rehabilitate, manage, lease, maintain, sell, transfer,
and/or dispose of the Property, and all activities that are related or
incidental thereto.

     

    (b) Hold for Investment
Purposes.  To hold the Property for investment
purposes.

     

    (c) All Other
Powers.  To exercise all other powers which may be legally
exercised by limited liability companies under the Act and necessary to,
reasonably connected with, or convenient to the conduct, promotion or attainment
of the business or purposes of the Company or the protection or benefit of the
Company and its assets.

     

    ARTICLE
3                                

     

    

     

    MEMBERS
and CONTRIBUTIONS

     

    3.1 Identity of
Members.  The names and addresses of the Members, as of the
Effective Date, are set forth on attached Exhibit “A”.

     

    3.2 Classes of
Members.  There is one class of Members in the
Company.

     

    3.3 Initial Capital
Contributions.  The Company shall have an initial
capitalization of the sum of the initial Capital Contributions specified under
the heading “Initial Capital Contributions and Initial Capital Accounts” on
attached Exhibit “A”
which shall be contributed by (or credited to) the Members as specified on
attached Exhibit “A”
and as set forth in this Section 3.3.  Amounts or property contributed by a
Member under this Section 3.3 shall be credited
to such Member’s Capital Account and Capital Contribution when actually paid or
transferred.  The Members shall, upon the execution of this Agreement
(or as soon thereafter as so notified by the Manager), contribute such amounts
as are set forth on attached Exhibit “A”
as such Member’s initial Capital Contribution.1

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (a) Owens’ Initial Capital
Contribution.  Owens hereby contributes to the Company, as of
the Effective Date and as Owens’ initial Capital Contribution, the Property (the
“Contributed
Property”), which the Parties agree has a fair market value, as of the
Effective Date, of $6,350,000.  In exchange for such Capital
Contribution, Owens shall receive an initial credit to Owens’ Capital Account
and Capital Contribution in such amount.  Immediately upon the
Closing, and pursuant to Section 3.3(b), the
sum of $3,175,000 shall be distributed by the Company to Owens such that Owens
shall thereupon have an initial Capital Account balance in the amount of
$3,175,000.

     

    (b) Nanook’s Initial Capital
Contribution.  Nanook shall contribute to the Company, as of
the Effective Date, through “Escrow Holder” under the Purchase and Sale
Agreement (“Escrow
Holder”), and as Nanook’s initial Capital Contribution, the sum of
$3,175,000, which shall (after the Closing) be distributed by the Escrow Holder
(on behalf of Company as set forth above) to Owens.  In exchange for
such Capital Contribution, Nanook shall receive an initial credit to Nanook’s
Capital Account and Capital Contribution in such amount.

     

    (c) Avis Lease.  Nanook
shall assign to the Company, as of the Effective Date, all of Nanook’s right,
title and interest in and to the Avis Lease, which assignment shall not affect
in any manner the Capital Contributions or Capital Accounts of the
Members.

     

    (d) Closing under Purchase and Sale
Agreement.  All of the provisions of the Purchase and Sale
Agreement shall be deemed incorporated by reference in this Agreement and shall
be binding on and benefit Owens (as seller) and the Company (as buyer), as if
Nanook had assigned to the Company Nanook’s rights under the Purchase and Sale
Agreement, subject to the other provisions of this Agreement and subject to the
following provisions: (i) the “Buyer” under the Purchase and Sale Agreement
shall be deemed to be the Company; (ii) the Company shall not be obligated
to pay or deliver (whether to Owens or to Escrow Holder or to any other Person)
the “Purchase Price” under the Purchase and Sale Agreement (such payment being
replaced by other provisions of this Section 3.3); (iii) the closing costs described in
Clauses (B), (C) and (D) of the first paragraph of Section 10 of the
Purchase and Sale Agreement and in Clauses (A), (B), (C), (D) and (E) of
the second paragraph of Section 10 of the Purchase and Sale Agreement shall
be shared equally (50/50) by Owens and Nanook through payments to and from (as
appropriate) Escrow Holder (but not as Capital Contributions); and
(iv) Owens shall reimburse Nanook as of the Effective Date in the amount of
all expenses incurred by Nanook with respect to environmental investigations of
the Property under the Purchase and Sale Agreement, which reimbursement shall be
an expense of Owens but not a Capital Contribution.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.4 Liability of Members; Interest on and
Return of Capital Contribution; Priority and Return of
Capital.  Subject to the terms of this Agreement, and except as
otherwise provided in the Act, the liability of a Member is restricted and
limited to the amount of the actual Capital Contributions made and/or to be made
with respect to such Member’s Interest.  Unless otherwise specifically
provided for in this Agreement, including pursuant to Section 4.1, no Member may withdraw any portion of the capital
of the Company, no Member shall be entitled to interest on such Member’s Capital
Contributions, and no Member shall be entitled to a return of such Member’s
Capital Contributions.  Except as specifically provided in this
Agreement, no Member shall have priority over any other Member, as to the return
of a Capital Contribution, as to allocations of Profits or Losses, or as to any
distributions; provided that this Section 3.4
shall not apply to loans (as distinguished from a Capital Contribution) which a
Member has made to the Company.

     

    3.5 Loans.  Nothing in
this Agreement shall prevent any Member or Manager (or its Affiliate) from
making secured or unsecured loans to the Company subject to the approval of the
Manager.  If any Member or Manager or its Affiliate shall make any
loan or loans to the Company or advance money on behalf of the Company, then the
amount of any such loan or advance shall not be treated as a Capital
Contribution but shall be a debt due from the Company.  The amount of
any such loan or advance by a lending Member or Manager shall be repayable out
of the cash of the Company.  Such loan or advance shall bear interest
at the rate of ten percent (10%) per annum calculated on a cumulative (but not
compounded) basis, but no more than the maximum rate allowed by
law.

     

    3.6 Guarantee of Debt or
Liabilities.  A Member or Manager (or Affiliate of a Member or
Manager) may guarantee the Company’s debt or liabilities only upon the prior
consent of the Manager.

     

    3.7 No Admission of New
Member.  Subject to article 8 and
Section 3.8(e), no Person may acquire an
Interest in the Company directly from the Company and be admitted as an
additional Member, or (if such Person is already a Member) acquire an additional
Interest.

     

    3.8 Additional Capital
Contributions.   Except in accordance with the express
provisions of this Section 3.8, no Member may
make any additional Capital Contribution.

     

    (a) Required
Capital.  The Manager may request that additional capital be
contributed to the Company if, at any time or from time to time, the Manager
reasonably determines that additional funds are required (i) for the reasonable
working capital needs of the Company or (ii) for costs associated with the
construction of improvements which may be requested by the tenant under any
lease of the Property or any portion thereof, including the Avis Lease (the
“Improvement
Costs”), provided that (A) the Improvement Costs are amortized at a
reasonable rate over the term of any such lease and (B) the tenant under any
such lease will be required to reimburse the Company for its Improvement Costs
as additional rent (it being understood that with respect to improvements
requested under the Avis Lease it is the intention that the Manager first use
commercially reasonable efforts to obtain non-recourse mortgage financing to
fund such Improvement Costs).  The Manager shall notify each Member in
writing (the “Capital
Notice”) of the total amount requested to be contributed (the “Required
Capital”).  Such Required Capital shall be made as a Capital
Contribution by each Member pursuant to the provisions of this Section 3.8.  The Capital Notice shall specify the
Required Capital, the due date for such Required Capital (which shall be at
least thirty (30) calendar days after the giving of the Capital Notice), and the
portion of the Required Capital required of each Member, which shall be in
proportion to the then-current Percentage Interest of each Member (the “Required
Amount”).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (b) No Personal
Obligation.  Unless a Member so obligates itself pursuant to
Section 3.8(c), a Member shall have no personal
liability for the failure to make an additional Capital Contribution and the
failure of a Member to make an additional Capital Contribution shall not
constitute a breach or default of this Agreement.

     

    (c) Shortfall
Notice.  Each Member shall notify the Manager, within ten (10)
calendar days after the giving of the Capital Notice, of the amount (if any) of
the Required Amount that such Member elects (in the sole and absolute discretion
of such Member) to obligate itself to make as an additional Capital
Contribution.  Failure to so notify the Manager within such 10-day
period shall be deemed to be such Member’s election to not obligate itself to
make a Capital Contribution with respect to the Required Amount.  The
Manager shall immediately thereafter notify (the “Shortfall
Notice”) each Member if there is any shortfall between the amounts so
obligated by the Members and the amount of the Required Capital (the “Shortfall
Amount”), which Shortfall Notice shall identify each Member that is not
obligating itself to contribute its Required Amount (a “Shortfall
Member”).  For purposes of this Agreement, “Shortfall
Amount” shall also include any amount thereafter not timely contributed
by a Member that such Member obligated itself to contribute pursuant to this
Section 3.8, and “Shortfall Member” shall also include
such Member.

     

    (d) Rights of Contributing
Members.  Upon the giving of a Shortfall Notice by the Manager,
each Member that is not a Shortfall Member (each a “Contributing
Member” and, collectively, the “Contributing
Members”), shall have the right, but not the obligation (in the sole and
absolute discretion of such Contributing Member), to elect to exercise any one
(but not more than one) of the provisions set forth in Section 3.8(d)(i), Section 3.8(d)(ii), or Section 3.8(d)(iii) (any of the preceding, the “Shortfall Makeup
Rights”) with respect to such Contributing Member’s “share” of the
Shortfall Amount as follows.  Initially, such “share” shall be based
on the relative Percentage Interests of the Contributing
Members.  Each Contributing Member must make such election of a
Shortfall Makeup Right on or before seven (7) calendar days after the giving of
the Shortfall Notice.  Thereafter, to the extent that Contributing
Members have not elected Shortfall Makeup Rights as to the entire Shortfall
Amount, any remaining Shortfall Amount shall be apportioned among the electing
Contributing Members as the Manager shall determine.  The Manager may
use any reasonable method to allow Shortfall Makeup Rights to be exercised as to
the maximum amount of the Shortfall Amount.

     

    (i) Fund such
Contributing Member’s share of the Shortfall Amount to the Company, and treat
the Shortfall Amount so funded as a loan to the Company from such Contributing
Member (“Excess Company
Loan”) and not a Capital Contribution.  Each Excess Company
Loan shall bear interest at the rate of ten percent (10%) per annum calculated
on a cumulative (but not compounded) basis, but no more than the maximum rate
allowed by law.  Payments made on Excess Company Loans shall be made
pursuant to Section 4.1(a)(i) and
Section 4.1(b)(i), with any such repayment
first applied to reduce the interest accrued on such Excess Company Loan and
then to reduce the principal amount of such Excess Company Loan.  If
there are more than one (1) outstanding Excess Company Loans, then each such
Excess Company Loan shall be repaid by the Company in proportion to the amount
it represents of the total amount owing under all such Excess Company
Loans.  If not sooner repaid, all principal and interest on Excess
Company Loans shall become immediately due and payable upon the sale, transfer
or other disposition of all or substantially all of the assets of the Company or
the dissolution and liquidation of the Company.

     

    
      
        
        

      

      
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    (ii) Fund such
Contributing Member’s share of the Shortfall Amount to the Company, and treat
the Shortfall Amount so funded as a loan to the Shortfall Member from such
Contributing Member (an “Excess Member
Loan”), except that such loan shall be non-recourse to the Shortfall
Member except to the extent of such Shortfall Member’s right to receive
distributions from the Company and such Shortfall Member shall have no personal
liability for the payment of such loan except as set forth in this
Section 3.8(d)(ii).  Each Excess
Member Loan shall bear interest at the rate of ten percent (10%) per annum
calculated on a cumulative (but not compounded) basis, but no more than the
maximum rate allowed by law.  In such event, all amounts that would
otherwise have been distributed or paid by the Company to the Shortfall Member
or any Affiliate of the Shortfall Member (including without limitation amounts
distributable or payable upon the dissolution and liquidation of the Company)
(“Excess
Member Loan Payments”) will, for all purposes of this Agreement, be
deemed and accounted for as if distributed or paid to the Shortfall Members or
Affiliate, but will in fact be paid directly to the Contributing Member by the
Company on account of such Excess Member Loan, with Excess Member Loan Payments
being first applied to interest accrued on such Excess Member Loan and then to
reduce the principal amount of such Excess Member Loan.  If there are
more than one (1) outstanding Excess Member Loans, then each such Excess Member
Loan Payment shall be applied thereto in proportion to the amounts outstanding
under all such Excess Member Loans.  The Shortfall Member shall
execute, acknowledge, deliver, file, and/or record, as appropriate, any
documents, instruments, and agreements reasonably necessary to direct such
Excess Member Loan Payments to the Contributing Member.  If not sooner
repaid, all principal and interest on Excess Member Loans shall become (subject
to Section 3.8(b)) immediately due and payable
upon the sale, transfer or other disposition of all or substantially all of the
assets of the Company or the dissolution and liquidation of the
Company.

     

    (iii) Fund such
Contributing Member’s share of the Shortfall Amount to the Company, and treat
the Shortfall Amount so funded as an additional Capital Contribution to the
Company by such Contributing Member (“Shortfall Capital
Contributions”).  In such event the provisions of
Section 3.8(e) shall apply.

     

    (e) Dilution and Adjustment of Percentage
Interests.  Immediately after an additional Capital
Contribution by any Member that is disproportionate (for whatever reason) to
such Member’s then-current Percentage Interest, the Percentage Interest of each
Member that contributed less than such Member’s then-current Percentage Interest
shall be reduced (and the Interest of such Member shall be diluted), and the
Percentage Interest of each Member that contributed more than such Member’s
then-current Percentage Interest shall be increased (and the Interest of such
Member shall be accreted) as follows: The Percentage Interest of each Member
shall be adjusted (which adjustments shall be deemed reflected on attached Exhibit “A”)
to the percentage equal to the Unrecovered Capital Contributions of such Member
(as of immediately following any such disproportionate Capital Contribution)
divided by the total Unrecovered Capital Contributions of all Members (as of
immediately following any such disproportionate Capital
Contribution).

     

    (f) Further
Documents.  Each Shortfall Member shall execute any and all
further documents reasonably necessary to carry out the provisions of this
Section 3.8 and to pay all costs, including
reasonable attorneys’ fees, incurred by the Contributing Member or the Company
in documenting and enforcing the same.  In addition, each Shortfall
Member agrees that damages would be an inadequate remedy and that injunctive
relief may be granted to compel compliance herewith.  Each Member
hereby appoints as such Member’s attorney-in-fact each other Member for the
purpose of executing, acknowledging, verifying, filing, certifying, publishing,
and delivering any promissory note and any other documents required of such
Member if it is a Shortfall Member or as otherwise necessary to carry out the
provisions of this Section 3.8.

     

    
      
        
        

      

      
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    ARTICLE
4                                

     

    

     

    DISTRIBUTIONS
AND ALLOCATIONS

     

    4.1 Distributions.

     

    (a) Distributable
Cash.  All Distributable Cash shall be paid, reserved or
distributed, as the case may be, in each Fiscal Year in the following order of
priority:

     

    (i) First, to
pay any outstanding debts and obligations of the Company that are currently due
to lenders and creditors.

     

    (ii) Next, to
establish or add to any Reserves.

     

    (iii) Next, to
distribute to each Member, pro rata, an amount equal to such Member’s Shortfall
Capital Contributions (less prior distributions under this Section 4.1(a)(iii) and Section 4.1(b)(iii)).

     

    (iv) Finally,
to distribute the balance to each Member, in proportion to its respective
Percentage Interest.

     

    (b) Major Capital Event
Proceeds.  All Major Capital Event Proceeds shall be paid,
reserved or distributed, as the case may be, in the following order of
priority:

     

    (i) First, to
pay any outstanding debts and obligations of the Company that are currently due
to lenders and creditors.

     

    (ii) Next, to
establish or add to any Reserves.

     

    
      
        
        

      

      
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    (iii) Next, to
distribute to each Member, pro rata, an amount equal to such Member’s Shortfall
Capital Contributions (less prior distributions under Section 4.1(a)(iii) and this Section 4.1(b)(iii)).

     

    (iv) Next, to
distribute to each Member, pro rata, an amount equal to such Member’s
Unrecovered Capital Contributions.

     

    (v) Finally,
to distribute the balance to each Member, in proportion to its respective
Percentage Interest.

     

    (c) Timing of
Distributions.  The Manager shall determine when, and the
extent to which, distributions should be made, in the reasonable discretion of
the Manager.

     

    (d) Distributions in Violation of
Act.  The Company shall not be required to make any
distribution that would be in violation of the Act or any other applicable
law.  A Member or Assignee is obligated to return a distribution from
the Company only to the extent required under the Act or any other applicable
law.

     

    4.2 Allocation of Profits and
Losses.  Except as otherwise provided in Article 13, for each Fiscal Year or other period,
Profits and Losses shall be allocated among the Members so as to give economic
effect to the distribution provisions in Section 4.1, so that to the extent possible the Capital Account
balance of each Member is equal to the distributions such Member would receive
if the Company were liquidated at the end of such period and all Distributable
Cash and Major Capital Event Proceeds were distributed.

     

    ARTICLE
5                                

     

    

     

    MANAGEMENT
RIGHTS AND DUTIES

     

    5.1 Number and
Tenure.  The Company shall have one Manager.  The
initial Manager is NV Manager.  The Manager shall hold office until
its successor has been elected and qualified.

     

    5.2 Management.

     

    (a) In General.  The
business, property, and affairs of the Company shall be managed by the
Manager.  The Manager shall have all of the necessary powers to manage
and control the business of the Company.  The Manager shall manage the
Company in a manner consistent with this Agreement and the Act.

     

    (b) Management
Powers.  In furtherance of this Section 5.2, and subject to the provisions of Section 7.5, the Manager shall have power and authority on
behalf of the Company to act as follows with respect to the Company’s business
and assets:

     

    (i) To
acquire real and personal property from, and to contract for repairs on and
improvements to such property with, any Person as the Manager may
determine.  The fact that a Member is directly or indirectly
affiliated or connected with any such Person shall not prohibit the Manager from
dealing with that Person.

     

    
      
        
        

      

      
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    (ii) To borrow
money for the Company from banks, other lending institutions, the Members, or
Affiliates of the Members for the purpose of funding Improvement Costs as
provided in Section 3.8(a)(ii) hereof, on such terms as deemed appropriate by
the Manager, and in connection therewith, to hypothecate, encumber, and grant
security interests in the assets of the Company to secure repayment of the
borrowed sums.  Owens shall have the right to participate in the
bidding for any such loan.  Except as otherwise provided in the Act,
no debt shall be contracted or liability incurred by or on behalf of the Company
except by the Manager.

     

    (iii) To
purchase liability and other insurance to protect the Company’s property and
business.

     

    (iv) To hold
and own any Company real and/or personal property in the name of the
Company.

     

    (v) To invest
any Company funds temporarily including without limitation in time deposits,
short-term governmental obligations, commercial paper, or other
investments.

     

    (vi) To act as
partner, member, and/or manager of, to appoint officers for, and to otherwise
act on behalf of the Company with respect to any limited partnership, limited
liability company, or any other Entity managed by the Company or in which the
Company has an interest.

     

    (vii) Intentionally
deleted.

     

    (viii) Intentionally
deleted.

     

    (ix) 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,
and any other instruments or documents necessary, in the opinion of the Manager,
to the business of the Company.

     

    (x) To employ
or engage accountants, legal counsel, brokers, managing agents or other experts
and consultants to perform services for the Company and to compensate them from
Company funds.

     

    (xi) To enter
into any and all other agreements on behalf of the Company, with any other
Person, for any purpose, in such forms as the Manager may approve.

     

    (xii) To
pursue, defend, compromise, and settle all claims or lawsuits by or against the
Company.

     

    (xiii) To apply
for and obtain all permits and approvals determined to be appropriate by the
Manager to the Property.

     

    
      
        
        

      

      
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    (xiv) To
enforce the terms of leases, collect rents, make repairs and alterations, pay
all costs and expenses of management, maintain books and records, and generally
to assume and direct management and operation of the Property and any other
assets held by the Company.

     

    (xv) To change
the Tax Matters Partner, as provided in Section 6.1.

     

    (xvi) To do and
perform any and all other acts as the Manager believes may be necessary or
appropriate to the conduct of the Company’s business.

     

    (c) No Authority for
Members.  Unless authorized to do so by this Agreement or by
the Manager in writing, no Member, agent, or employee 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 for any purpose.

     

    5.3 Resignation, Termination, Removal,
and Vacancies.

     

    (a) Resignation.  The
Manager may resign at any time by giving written notice to the other
Parties.

     

    (b) Termination.  The
Manager shall be terminated as Manager, without any requirement for any
approval, election, vote, decision or other determination or action by any other
Parties, (i) with respect to a Manager that is a natural person, if such
Manager dies, (ii) with respect to a Manager that is an Entity, upon the
dissolution of such Manager under applicable law, and/or (iii) upon the
Bankruptcy of such Manager.

     

    (c) Removal.  The
Manager may be removed as Manager only as follows (any of the following, a “Removal
Event”):

     

    (i) Upon the
occurrence of a Bad Act with respect to the Manager and the subsequent vote of a
Voting Majority of disinterested Members.  Such removal shall take
effect upon such vote.

     

    (ii) With
respect to a Manager that is a natural person, if, because of a disability,
injury or illness, such Manager does not fulfill or becomes incapable of
fulfilling his or her obligations under this Agreement and such failure to
fulfill obligations occurs or will occur over at least ninety (90) calendar days
in the aggregate during any consecutive six (6) month period (a “Disability”).  Any
Party may give a notice to the Manager that such Party claims that the Manager
has a Disability.  The Manager may dispute such claim by so notifying
such Party, within twenty (20) calendar days after receipt of such initial
notice of Disability, in which event such dispute shall be subject to the
provisions of Section 11.3 (except that the
Dispute Parties may proceed to the mediation provisions of Section 11.3(c) without observing the resolution provisions of
Section 11.3(b)), and the Manager shall not be
removed until such dispute is resolved under Section 11.3.  If the Manager does not dispute such
initial notice of Disability within such 20-day period, then the Manager shall
be deemed to have a Disability and be immediately removed as the
Manager.

     

    
      
        
        

      

      
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    (d) Vacancies.  Any
vacancy in the office of the Manager occurring for any reason shall be filled by
the approval of all Members (which shall be in their
sole and absolute discretion).

     

    5.4 Liability for Certain
Acts.

     

    (a) Liability of
Manager.  The Manager shall exercise business judgment in
participating in the management of the business, operations, and affairs of the
Company as measured in light of the provisions of Section 5.4(b).  Neither the Manager nor any
Affiliate of the Manager shall be liable or obligated to the Company or any
Member for any mistake of fact or judgment or for any act or failure to act by
the Manager in conducting the business, operations, and affairs of the Company,
which may cause or result in any loss or damage to the Company or any Member,
except in the event of a Bad Act by the Manager (or any Affiliate of the
Manager).  Except to the extent a result of a Bad Act by the Manager
(or any Affiliate of the Manager), neither the Manager (nor any Affiliate of the
Manager) is or will become personally liable for, or guarantee, or otherwise
have any responsibility for (i) the return of any Capital Contribution made
by any Member, (ii) a profit for any Member from the operations of the
Company, (iii) a loss of investment of any Member, and/or (iv) a loss
in operations of the Company.  Notwithstanding anything to the
contrary in this Agreement, the Manager is specifically permitted to satisfy any
Company obligations as to which the Manager is personally liable before
satisfying Company obligations as to which the Manager has no such personal
liability.

     

    (b) Standard of Care; Reliance on Third
Parties.  Notwithstanding anything to the contrary in this
Agreement, the duty of care in the discharge of the duties of the Manager to the
Company and to the Members is limited to refraining from engaging in any Bad
Act.  In discharging the duties of a “manager,” the Manager is fully
protected in relying in good faith upon such information, opinions, reports, or
statements by any Party (or the agents of any Party), or by any other Person, as
to matters the  Manager reasonably believes are within such other
Person’s professional or expert competence, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits or losses of the Company or any other facts pertinent to the existence
and amount of assets from which distributions to a Member might properly be
paid.

     

    5.5 Indemnity by
Company.  Except for claims, actions or demands arising from a
Bad Act, the Company shall indemnify the Manager (and Affiliates thereof) to the
fullest extent permitted by law, and shall defend, save, and hold them harmless
from and in respect of, all fees, costs, losses, damages, and expenses
(including attorneys’ fees) incurred in connection with or resulting from any
claim, action, or demand arising out of or in any way relating to the Company or
its properties, including amounts paid in settlement or compromise (if
recommended by the Company’s counsel) of any such claim, action, or demand and
all fees, costs, and expenses (including attorneys’ fees) in connection
therewith.  The termination of any action, suit or proceeding by
judgment, order, settlement or upon a plea of nolo contendere or its equivalent,
shall not of itself create a presumption that any Person committed a Bad
Act.  In addition to the indemnification conferred in this
Section 5.5, the Manager (and Affiliates
thereof) shall also be entitled to be reimbursed for, or to have paid directly
by the Company, the expenses reasonably incurred in defending any such
proceeding against the Manager or such Officer (and Affiliates thereof) in
advance of its final disposition, to the fullest extent permitted by law, as the
same exists or may hereafter be amended.  The right to indemnification
conferred in this Section 5.5 is a contract
right.  The Company may, by action of the Manager, provide
indemnification to such of the Officers, employees and agents of the Company to
such extent and to such effect as determined to be appropriate by the Manager
and authorized under the Act, as the same exists or may hereafter be
amended.  The rights and authority conferred in this Section 5.5 shall not be exclusive of any other right which the
Manager may have or hereafter acquire under any statute, under any provision of
the Certificate of Formation, under this Agreement, by vote of the Members, or
otherwise.  Any repeal or amendment of this Section 5.5 shall not adversely affect any right or protection
of the Manager or any Officer (or Affiliates thereof) existing at the time of
such repeal or amendment.

     

    
      
        
        

      

      
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    5.6 Expenses.  The
Company shall pay or reimburse the Manager for the actual cost of services,
goods, and materials advanced by the Manager and reasonably related to or used
for or by the Company, except as otherwise provided in this
Agreement.  

     

    5.7 Payment of Fees to
Manager.  Except as expressly set forth elsewhere in this
Agreement, the Manager and/or Affiliates of the Manager shall receive no fees
from the Company except (subject to Section 5.9) such fees for services to the Company as
determined by the Manager and all Members.

     

    5.8 No Exclusive Duty; Other Business and
Activities; Competitive Activities.  Except as otherwise
provided in this Agreement, the Manager shall not be required to manage the
Company as the sole and exclusive function of the Manager.  Except as
otherwise provided in this Agreement, the Manager may engage in or possess an
interest in other activities, investments, and business ventures of every nature
and description independently or with others, whether or not competitive with
the Company (including without limitation as the manager and/or general partner
of other Entities), whether distinct from or related to the Company, and the
doctrine of “corporate opportunity” or any analogous doctrine shall not apply to
the Manager.  Except as otherwise provided in this Agreement, neither
the Company nor any other Member or Manager has any right by virtue of this
Agreement in and to any such activity, investment, or business venture, or to
the income or profits derived from such activity, investment, or business
venture, and the pursuit of such activities, investments, and business ventures
shall not be deemed wrongful or improper or the breach of any duty under this
Agreement or existing at law, in equity, or otherwise.  In this
connection, each Member hereby acknowledges that Affiliates of the Manager are
and shall continue to be the manager and/or general partner of other Entities,
including Entities that own or manage real estate projects that are adjacent to
or near the Property whether or not competitive with the business of the
Company.

     

    5.9 Transactions Between the Company and
the Manager.  Subject to the terms of this Section 5.9 and
Section 7.5, the Manager may, and may cause its Affiliates to, engage in any
transaction (including without limitation the purchase, sale, lease, or exchange
of any property or the rendering of any service, or the establishment of any
salary, other compensation, or other terms of employment) with the Company so
long as such transaction is not expressly prohibited by this Agreement and so
long as the terms and conditions of such transaction, on an overall basis, are
fair and reasonable to the Company and are at least as favorable to the Company
as those that are generally available from Persons capable of similarly
performing them and in similar transactions between parties operating at arm’s
length.  A transaction between the Manager and/or Affiliates of the
Manager, on the one hand, and the Company, on the other hand, shall be
conclusively determined to constitute a transaction on terms and conditions, on
an overall basis, fair and reasonable to the Company and at least as favorable
to the Company as those generally available in a similar transaction between
parties operating at arm’s length only if a Voting Majority of disinterested
Members affirmatively vote or consent to approve the transaction (for these
purposes only, a Member will be excluded from voting or consenting, and be
deemed interested, if such Member, directly or indirectly, owns or controls the
Manager, is owned or controlled by the Manager, or is under common ownership or
control with the Manager).  

     

    
      
        
        

      

      
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    5.10 Bank Accounts.  The
Manager may from time to time open bank accounts in the name of the
Company.

     

    5.11 Meetings.  Regular
meetings of the Manager are not mandatory.  The Members or, in the
absence of action by the Members, the Manager, shall adopt such rules regarding
the holding of meetings of the Manager, as determined by the Manager to be
necessary or appropriate and in compliance with the Act.

     

    5.12 Appointment of
Officers.  The Manager may from time to time appoint Officers
of the Company, with the same standard of care and obligations as the Manager
described in this Article 5, which may include
without limitation the following: (a) a President; (b) one or more
Vice Presidents; (c) a Secretary, and (d) a Chief Financial
Officer.  The Manager may delegate a portion of its day-to-day
management responsibilities to any such Officers, and such Officers shall have
the authority to contract for, negotiate on behalf of and otherwise represent
the interests of the Company as authorized by the Manager in any job description
created by the Manager.

     

    5.13 Ownership.  All
property owned by the Company, including without limitation the Property, shall
be owned by the Company as an entity and, to the fullest extent permitted by
law, no Member shall have any ownership interest in any Company property in its
individual name or right, and each Member's Interest shall be personal property
for all purposes.

     

    5.14 Authority as to Third
Persons.  No third party dealing with the Company shall be
required to investigate the authority of the Manager or secure the approval or
confirmation by the Members of any act of the Manager in connection with the
conduct of the Company’s business.  No purchaser of any property or
interest owned by the Company is required to determine the right to sell or the
authority of the Manager to sign and deliver any instrument of transfer on
behalf of the Company, or to see to the application or distribution of revenues
or proceeds paid or credited in connection therewith.  Any Manager
shall have full authority to execute on behalf of the Company any and all
agreements, contracts, subleases, licenses, conveyances, deeds, mortgages, and
other instruments, and the execution thereof by the Manager is the only
execution necessary to bind the Company thereto (no signature of any Member is
required to bind the Company).  The Manager may, by separate
instrument or document, authorize one or more individuals to execute subleases,
licenses, operating agreements, and documents related thereto on behalf of the
Company and any such documents executed by such agent is binding upon the
Company as if executed by the Manager.

     

    
      
        
        

      

      
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    5.15 Safe Harbor Election and Forfeiture
Allocations.  If there is a Safe Harbor Election when there is
a Transfer of an Interest to a service provider, then the Company and each
Member will treat each such Interest transferred in connection with the
performance of services as having a fair market value equal to the “liquidation
value” (as that term is defined in Notice 2005-43) of such
Interest.  If there is not a Safe Harbor Election when there is a
Transfer of an Interest to a service provider, then the following provisions
shall apply:  (a) the Company is authorized and directed to make
the Safe Harbor Election; (b) the Company and each of Member (including any
Person to whom an Interest is transferred in connection with the performance of
services) agree to comply with all requirements of the Safe Harbor Election
while the Safe Harbor Election remains effective; and (c) the Company and
each Member (including any Person to whom an Interest is transferred in
connection with the performance of services) shall report the income tax effects
of the transfer of an Interest to a service provider in a manner consistent with
the requirements of the Safe Harbor Election.

     

    ARTICLE
6                                

     

    

     

    ACCOUNTING,
TAX MATTERS AND REPORTS

     

    6.1 Tax Matters
Partner.  The Manager shall be the tax matters partner of the
Company for purposes of Chapter 63 of the Code and the Treasury Regulations
(“Tax
Matters Partner”).  The Tax Matters Partner may resign as Tax
Matters Partner at any time or may be changed by the prior written consent of
the Manager (which shall be in the sole and absolute discretion of the
Manager).  All elections permitted to be made by the Company under
federal or state laws shall be made by the Tax Matters Partner in such Tax
Matters Partner’s sole and absolute discretion.  All expenses incurred
in connection with any audit, investigation, settlement, or review of the
Company’s tax liabilities will be borne by the Company.  The Company
shall indemnify, defend and hold harmless the Tax Matters Partner from and
against any and all claims, liabilities, costs and expenses (including
reasonable attorney fees and court costs) incurred by him, her or it as a
consequence as serving or acting as the Tax Matters Partner (except to the
extent arising from a Bad Act by the Tax Matters Partner).

     

    6.2 Accounting
Principles.  The Profits and Losses of the Company shall be
determined in accordance with accounting principles applied on a consistent
basis under the method of accounting determined by Owens in consultation with
the Tax Matters Partner and the Entity CPA.

     

    6.3 Returns. Owens shall cause the
preparation and timely filing of all tax returns required to be filed by the
Company pursuant to the Code and all other tax returns deemed necessary and
required in each jurisdiction in which the Company does
business.  Copies of such returns, together with any additional
information necessary for the completion of Members’ federal and state income
tax or information returns, shall be furnished by Owens to the Members within
ninety (90) calendar days after the end of the Fiscal Year.  The
Manager shall reasonably cooperate with Owens with respect to Owens’ obligations
under this Section 6.3 and Section 6.4.

     

    6.4 Records and Reports. Owens shall, on behalf
of the Company, maintain, and each Party shall have the right to obtain from
Owens and the Company, from time to time upon reasonable demand for any purpose
reasonably related to the Interest of such Party, the following:

     

    
      
        
        

      

      
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    (a) Transactions.  True
and proper books, records, reports, and accounts in which shall be entered fully
and accurately all transactions of the Company.

     

    (b) Status of Business and Financial
Condition.  True and full information regarding the status of
the business and financial condition of the Company.

     

    (c) Returns.  Promptly
after becoming available, a copy of the Company’s federal, state, and local
income tax returns for each year.

     

    (d) Members and
Managers.  A current list of the name and last known business,
residence or mailing address, and email address of each Member or
Manager.

     

    (e) Organic
Documents.  Copies of this Agreement and the Certificate of
Formation, as amended, together with executed copies of any written powers of
attorney pursuant to which this Agreement or the Certificate of Formation, as
amended, have been executed.

     

    (f) Financial
Statements.  Copies of the financial statements of the Company,
if any, for the six (6) most recent Fiscal Years.

     

    (g) Capital
Contributions.  True and full information regarding the amount
of cash and a description and statement of the agreed value of any other
property or services contributed by each Member and which each Member has agreed
to in writing to contribute in the future, and the date on which each became a
Member.

     

    (h) Other
Information.  Other information regarding the affairs of the
Company as is just and reasonable.

     

    The
Company’s books shall be kept and its financial statements, if any, shall be
prepared under the method of accounting described in Section 6.2.

     

    6.5 Access to
Records.  Upon the written request of any Party, setting forth
the purpose for such request, Owens shall (on behalf of the Company) promptly
deliver to such Party, at the Company’s expense, a copy of the information
required to be maintained pursuant to Section 6.4, so long as the purpose for such request
reasonably relates to the Interest of such Party.  Each Party has the
right upon reasonable request, for purposes reasonably related to the Interest
of such Party, to (a) inspect and copy during normal business hours any of
the records required to be maintained pursuant to Section 6.4, and (b) to obtain, promptly after becoming
available, a copy of the Company’s federal, state, and local income tax or
information returns for each Fiscal Year.

     

    
      
        
        

      

      
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    ARTICLE
7                                

     

    

     

    RIGHTS
AND OBLIGATIONS OF MEMBERS

     

    7.1 Limitation of
Liability.  Except as otherwise provided by law or in
Section 3.4 or in Section 4.1(d), or in Section 7.7, a Member shall not be personally liable under any
judgment of a court, or in any other manner, for any debt, obligation, or
liability of the Company, whether such liability or obligation arises in
contract, tort, or otherwise, solely by reason of being a Member.

     

    7.2 Indemnity by
Company.  To the fullest extent permitted by applicable law,
the Company shall indemnify each Member and shall defend, save, and hold each
Member harmless from and in respect of, all fees, costs, losses, damages, and
expenses (including attorneys’ fees) incurred in connection with or resulting
from any claim, action, or demand arising out of the Member’s status as a member
of the Company.  Notwithstanding any provision in this Agreement, any
indemnity under this Section shall be provided out of and to the extent of
Company assets only.

     

    7.3 Other Business and Activities;
Competitive Activities.  Except as otherwise provided in this
Agreement, the Members may engage in or possess an interest in other activities,
investments, and business ventures of every nature and description independently
or with others, whether or not competitive with the Company (including without
limitation as the manager and/or general partner of other Entities), whether
distinct from or related to the Company.  Except as otherwise provided
in this Agreement, neither the Company nor any other Party has any right by
virtue of this Agreement in and to any such activity, investment, or business
venture, or to the income or profits derived from such activity, investment, or
business venture.

     

    7.4 Restrictions on
Member.  No Member has either the obligation or the right to
take part, directly or indirectly, in the active management or control of the
business of the Company, except as otherwise specifically permitted in this
Agreement.  Unless authorized to do so by this Agreement or by the
Manager pursuant to Article 5, no Member, agent, or
employee 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 for any
purpose.  The restrictions of this Section 7.4 shall not apply to a Manager that is also a Member
with respect to such rights and obligations that apply to a “Manager” under this
Agreement.

     

    7.5 Voting.

     

    (a) Voting
Matters.  Except as expressly provided in this Section 7.5 or elsewhere in this Agreement, the Members shall
have no voting, approval or consent rights.  Notwithstanding anything
to the contrary in this Agreement, the Members shall have the right to approve
or disapprove the following matters, which shall require the necessary vote or
written consent of a Voting Majority or all Members (and the Manager, if so
indicated) as set forth below:

     

    (i) The
removal of the Manager in accordance with Section 5.3(c)(i) (which requires the vote of the Voting
Majority of disinterested Members).

     

    
      
        
        

      

      
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    (ii) The
admission of a new Manager, in accordance with Section 5.3(d) (which requires the vote of all
Members).

     

    (iii) Any fees
or increased fees to any Manager in accordance with Section 5.7 (which requires the vote of all
Members).

     

    (iv) The
approval of a transaction between the Company and the Manager, in accordance
with Section 5.9 (which requires the vote of a
Voting Majority of disinterested Members).

     

    (v) The
dissolution of the Company in accordance with Section 9.1(a)(i) (which requires the vote of all Members and
of the Manager).

     

    (vi) The
merger of the Company in accordance with Section 9.8 (which requires the vote of a Voting Majority and
of the Manager).

     

    (vii) Except as
otherwise provided in Section 11.8, amendments
to this Agreement (which require the vote of all Members and of the
Manager).

     

    (viii) The sale,
transfer, exchange or disposition of the Property or any portion thereof (which
requires the vote of all Members).

     

    (ix) Except as
otherwise provided in Section 3.8(a), the making of additional Capital
Contributions.

     

    (x) Except as
otherwise provided in Section 5.2(b)(ii), the borrowing of money for and on
behalf of the Company.

     

    (xi) Any other
matter in this Agreement that expressly requires the vote or consent of some or
all of the Members.

     

    (b) Voting Rights.  Only
Members who are original Members or Substitute Members shall have the right to
vote under this Agreement (subject to any express provisions of this Agreement
that limit the right to vote of a Member under certain circumstances such as
default).

     

    7.6 Meetings.

     

    (a) Call of Meetings;
Secretary. No annual or regular
meetings of the Members are required to be held.  Unless otherwise
proscribed by statute or the Act, a meeting of the Members may be called by
(i) the Manager, or (ii) any Member or Members holding at least twenty
percent (20%) of the total Capital Contributions of all Members, for the
election of the Manager and any other purpose or purposes, to be held at such
date and at such time as may be designated by the persons calling the
meeting.  At any meeting of the Members, the Manager or an individual
appointed by the Manager shall preside at the meeting and the Secretary (or if
none, an individual appointed by the Manager) shall act as secretary of the
meeting.  The secretary of the meeting shall prepare minutes of the
meeting which shall be placed in the minute books of the Company.

     

    
      
        
        

      

      
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    (b) Place of
Meetings.  The place of meetings shall be the principal place
of business of the Company, or such other place as determined by the
Manager.

     

    (c) Notice of
Meetings.  Except as provided in Section 7.6(d), written notice stating the place, date, and
time of the meeting and the general nature of the business to be conducted at
the meeting shall be given not less than ten (10) nor more than sixty (60)
calendar days before the date of the meeting, by or at the direction of the
Manager or the Member(s) calling the meeting, to each Member entitled to vote
(as set forth in Section 7.5(b)) at such
meeting.  Except as set forth in such notice, no other business may be
transacted at the meeting.

     

    (d) Meeting of All
Members.  If all of the Members meet at any time and place,
either within or outside of the State of Delaware, and provide written consent
to the holding of a meeting at such time and place, then such meeting shall be
valid without call or notice, and at such meeting any lawful action may be
taken.

     

    (e) Record Date.  For
the purpose of identifying or determining Members entitled to vote at any
meeting of Members, any adjournment of such meeting, or notice thereof, or
entitled to receive payment of any distribution, or in order to make a
determination with respect to Members for any other purpose, the close of
business on the Business Day next preceding the date on which notice of the
meeting is given or the close of business on the date on which the resolution
declaring such distribution is adopted, as the case may be, shall be the record
date for such identification or determination.  When identification of
Members entitled to vote at any meeting of Members has been made as provided in
this Section 7.6(e), such identification shall
apply to any adjournment of such meeting.

     

    (f) Quorum.  A Voting
Majority, represented in person or by proxy, shall constitute a quorum at any
meeting of Members.  In the absence of a quorum at any such meeting, a
Voting Majority so represented may adjourn the meeting from time to time for a
period not to exceed forty-five (45) calendar days without further
notice.  However, if the adjournment is for more than forty-five (45)
calendar 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 such adjourned
meeting at which a quorum is 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
such meeting of Members whose absence would cause less than a
quorum.

     

    (g) 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.  Such proxy
shall be filed with the Manager 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.

     

    (h) Telephone
Meetings.  Any Member may participate in a meeting by means of
conference telephone or similar communications equipment, as long as all Members
participating in the meeting can hear one another, and participation in a
meeting by such means constitutes presence in person at such
meeting.

     

    
      
        
        

      

      
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    (i) Action by Members Without a
Meeting.  Any action that may be taken at a meeting of the
Members may be taken without a meeting and without prior notice if a consent or
consents in writing, setting forth the action so taken, are signed and delivered
to the Company within sixty (60) calendar days of the record date for that
action by Members having not less than the minimum number of votes that would be
necessary to authorize or take that action at a meeting at which all Members
entitled to vote thereon were present and voted.  The record date for
determining Members entitled to take action without a meeting shall be the date
the first Member signs a written consent.  Unless the consents of all
Members entitled to vote have been solicited in writing, notice of any Member
approval of (i) an amendment to the Certificate of Formation or this
Agreement, (ii) a dissolution of the Company as provided in Section 9.1, or (iii) a merger of the Company as provided
in Section 9.8, without a meeting by less than
unanimous written consent shall be given to those Members entitled to vote who
have not consented in writing at least ten (10) calendar days before the
consummation of the action authorized by such approval.  For any other
action approved by Members without a meeting by less than unanimous written
consent, prompt notice shall be given to those Members entitled to vote who have
not consented in writing.

     

    (j) Waiver of
Notice.  When any notice is required to be given to any Member,
a waiver of such notice requirement in writing signed by the Member entitled to
such notice, whether before, at, or after the time stated in such notice, shall
be equivalent to the giving of such notice.  Attendance of a Member at
a meeting shall constitute a waiver of notice of the meeting, unless the Member
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.

     

    7.7 Environmental
Work.  Owens shall be solely responsible (a) to fund any
costs to contain, remove, remediate and monitor all environmental contamination
with respect to the Property and (b) at Owens’ sole cost, to manage the
process, hire the contractors and coordinate with the various governmental or
quasi-governmental agencies having jurisdiction thereof until such time as such
agencies issue final written determinations that no further action is required
and the Property is fully compliant with all applicable environmental laws (the
“Environmental
Work”).2  Owens shall diligently pursue the
obligations described in the preceding sentence.  Owens shall
indemnify and hold the Company and the other Parties harmless from and against
any and all claims, costs, and liabilities relating to such contamination and/or
the Environmental Work.  Owens shall promptly (within five (5)
calendar days after delivery of notice from Manager) reimburse the Company if
and to the extent that the Company incurs any costs or expenses with respect to
the Environmental Work.  Such obligation of Owens shall continue and
survive whether or not Owens is a member of the Company and shall not constitute
any Capital Contribution by Owens or affect the Capital Accounts of the Members
in any way.  If Owens defaults in such obligation, then Nanook may, at
its election in its sole and absolute discretion, loan such defaulted amount to
the Company, which loan shall be repaid with interest at the rate of nine
percent (9%) per annum calculated on a cumulative (but not compounded) basis,
but no more than the maximum rate allowed by law and which loan shall have
priority of expenses set forth in Section 4.1(a)(i) and/or Section 4.1(b)(i).

     

    
      
        
        

      

      
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    7.8 Buy/Sell Right. Each Member shall have
the right to implement the buy/sell procedure set forth in this Section 7.8 in strict accordance with the provisions of this
Section 7.8 (the “Buy/Sell
Right”).

     

    (a) Exercise.  Owens
shall have the right to exercise its Buy/Sell Right at any time following
completion of the Environmental Work and fulfillment of Owens’ obligations under
Section 7.7 (the “Environmental
Work Completion Date”).  Nanook shall have the right to
exercise its Buy/Sell Right at any time following the earlier to occur of
(i) at any time that Owens is in breach of Section 7.7, provided that Manager or Nanook has so notified
Owens and provided Owens with at least ten (10) calendar days to cure such
breach, or (ii) the Environmental Work Completion Date.  The
Member desiring to exercise its Buy/Sell Right (the “Buy/Sell
Offeror”) shall do so by giving written notice (the “Buy/Sell
Notice”) to the other Member (the “Buy/Sell
Offeree”) setting forth a statement of intent to invoke Buy/Sell
Offeror’s Buy/Sell Right under this Section 7.8, which Buy/Sell Notice shall include the amount
(the “Buy/Sell
Amount”) at which the Buy/Sell Offeror values the Project as of the date
the Buy/Sell Notice is delivered, free and clear of all liabilities, and shall
include notice of all oral or written offers and/or inquiries received by the
Buy/Sell Offeror during the previous three-month period relating to the
financing or disposition of the Project or any material portion thereof
(including without limitation proposals for the formation of a new Entity for
the ownership and operation of the Project).

     

    (b) Buy/Sell Offeree’s
Election.  Within thirty (30) days after the giving of the
Buy/Sell Notice, the Buy/Sell Offeree shall elect to either (i) sell the
Buy/Sell Offeree’s Interest to the Buy/Sell Offeror for a purchase price equal
to the amount that would be distributed to the Buy/Sell Offeree if the Company
were to sell the Project to a third party for the Buy/Sell Amount on the date of
the Buy/Sell Notice and the Company were to immediately satisfy all Company
liabilities and then distribute the “hypothetical” Major Capital Event Proceeds,
or (ii) purchase the Buy/Sell Offeror’s Interest from the Buy/Sell Offeror
for a purchase price equal to the amount that would be distributed to the
Buy/Sell Offeror if the Company were to sell the Project to a third party for
the Buy/Sell Amount on the date of the Buy/Sell Notice and the Company were to
immediately satisfy all Company liabilities and then distribute the
“hypothetical” Major Capital Event Proceeds.  The Buy/Sell Offeree’s
failure to timely make such election shall be deemed to constitute the Buy/Sell
Offeree’s election to sell the Buy/Sell Offeree’s Interest as of the expiration
of such 30-day period.

     

    (c) Closing.  The
closing of a purchase and sale of an Interest pursuant to this Section 7.8 shall be held at the principal place of business
of the Company on a mutually acceptable date not later than ninety (90) days
after Buy/Sell Offeree’s election (or deemed election) to sell the Buy/Sell
Offeree’s Interest or to purchase the Buy/Sell Offeror’s Interest.  At
such closing, the following shall occur:

     

    (i) The
selling Member shall assign to the purchasing Member the selling Member’s
Interest, and shall execute and deliver to the purchasing Member all documents
which may be required to give effect to the disposition and acquisition of such
Interest, in each case free and clear of all liens, claims, and encumbrances,
with covenants of general warranty.

     

    
      
        
        

      

      
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    (ii) The
purchasing Member shall pay to the selling Member cash or other immediately
available funds in the amount of the purchase price for the selling Member’s
Interest (as determined pursuant to Section 7.8(b)).

     

    (iii) Upon the
purchasing Member’s purchase of such Interest, (A) the Company shall
indemnify and hold the selling Member harmless from and against any and all
losses, damages or expenses that the selling Member may incur thereafter under
any liability, debt or obligation of the Company except to the extent such
losses, damages or expenses were caused by the selling Member’s Bad Act (or
Owens’ breach of any provision of Section 7.7) and except that in no event shall Owens be
indemnified for any breach of the provisions of Section 7.7, (B) the Company and the purchasing Member
shall use reasonably good faith efforts to cause any guarantees made or
collateral pledged by the selling Member to secure obligations of the Company to
be released by creditors, and (C) all outstanding Excess Member Loans made
by the selling Member shall be repaid in full together with all accrued and
unpaid interest thereon.

     

    (d) Enforcement.  It is
expressly agreed that any remedy at law for breach of the obligations of the
Members set forth in this Section 7.8 is
inadequate in view of (i) the complexities and uncertainties in measuring
the actual damage to be sustained by reason of the failure of a Member to comply
fully with such obligations, and (ii) the uniqueness of the Company’s
business and the relationships of the Members.  Accordingly, each of
such obligations shall be, and is hereby expressly made, enforceable by specific
performance.

     

    7.9 Operations in Pre-Closing
Period.  From the date of a Buyout Notice or Buy/Sell Notice
until the Buyout Closing Date (or closing under Section 7.8(c), as the case may be), the Company will continue
to be operated in the ordinary course as if the closing were not going to occur,
the Members will continue to have all power and authority granted them in this
Agreement (including the power to make distributions), and the Members will
exercise their power and authority in good faith and without regard to the fact
that such closing may occur; provided, however, that without the approval of
both Members (a) to the extent not otherwise reflected in the determination
of the purchase price for a selling Member’s Interest, any and all distributions
of Major Capital Event Proceeds from the Company to such
selling Member shall be credited against and reduce the purchase price otherwise
payable to such selling Member for its Interest and any Capital Contributions
made by such selling Member to the Company during such period shall be added to
and increase the purchase price otherwise payable to such selling Member for its
Interest, and (b) the Company shall not enter into any contracts or
agreements, or otherwise agree, to sell or otherwise dispose of the Project;
however, the Company shall be authorized to consummate any transactions which
were the subject of binding contractual obligations entered into before the
commencement of such period.

     

    ARTICLE
8                                

     

    

     

    TRANSFERS

     

    8.1 Transfers of Member
Interest.  No Member may effect a Transfer, except in
compliance with the provisions of this Article
8.  “Transfer” means, with respect to a
Member, to offer, sell, pledge, assign, transfer (including by way of a
transmutation of the character of the property from separate property into
community property or between spouses), encumber or in any manner whatsoever
directly or indirectly dispose of all or any portion of such Member’s Interest
(or any Economic Interest with respect to such Interest), whether voluntarily,
including by inter vivos transfer, or involuntarily (whether on death, or
testamentary disposition or otherwise), or by operation of law, including
without limitation the events or occurrences described as a Transfer in
Section 8.1(a).  If a Person is
either (1) a Member as a trustee or co-trustee of a trust or (2) a trustee
or co-trustee of a trust that is a Member, then, in either case, the death of
such Person, or the resignation or removal of such Person as a trustee or
co-trustee of such trust, or the admission of any additional Person as a trustee
of such trust shall also constitute a Transfer.  If such Member is an
Entity, then a change of control or the Transfer of any actual or beneficial
ownership of such Member shall also constitute a Transfer of its
Interest.  If a Member is an individual with a spouse that has a
community property interest in such Member’s Interest (and such spouse is a
signatory to this Agreement as a Member), then such Member is not deemed to have
died unless and until both such Member and such spouse have
died.  Each such Transfer shall be categorized as one and only one of
the following categories.

     

    
      
        
        

      

      
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    (a) “Permitted
Transfer” means
each Transfer with respect to which the Transferee is one of the following
Persons (a “Permitted
Transferee”):

     

    (i) The
Company.

     

    (ii) Another
Member.

     

    (iii) Any
corporation, partnership or limited liability company of which the Transferor
and/or Permitted Transferee(s) collectively own and control one hundred percent
(100%) of the voting and ownership interests (and a Transfer that is not a
Permitted Transfer will be deemed to occur at such time as one hundred percent
(100%) of such voting and ownership interests are no longer owned and controlled
by the Transferor and/or Permitted Transferee(s)).

     

    (b) “Non-Permitted
Transfer on Death or Trustee Change” means any Transfer (other
than a Permitted Transfer) that is triggered by a Member’s becoming a Deceased
Member or Changed Trustee.  “Deceased Member
or Changed Trustee” means, (i) if the
Member is an individual, then the death of such individual, (ii) if the
Member includes two or more individuals (either as joint tenants, or husband and
wife as community property, or otherwise) each of whom is a signatory and listed
in this Agreement as a Member, then the death of the last-surviving of such
individuals, and (iii) if a Person is either (A) a Member as a trustee
or co-trustee of a trust or (B) a trustee or co-trustee of a trust that is
a Member, then a change in trustees with respect to such trust that results in a
Transfer.

     

    (c) “Involuntary
Transfer” means
each of the following Transfers (other than any of the following that is a
Non-Permitted Transfer on Death or Trustee Change or a Permitted
Transfer):

     

    (i) The
Bankruptcy of a Member.

     

    
      
        
        

      

      
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    (ii) A Member
makes a gift of all or a portion of its Interest (including any Economic
Interest).

     

    (iii) A Member
pledges, encumbers, mortgages or hypothecates all or any portion of the Member’s
Interest (including any Economic Interest), other than pursuant to
Section 3.8(f).

     

    (iv) A Member
attempts to withdraw from the Company.

     

    (v) Any other
involuntary transfer of a Member’s Interest (including any Economic
Interest).

     

    (vi) Any other
event that, were it not for this Agreement, would cause the Member’s Interest
(including any Economic Interest) to be sold, assigned, or otherwise
transferred, but excluding any such sale, assignment or transfer that is to a
third party in an arms’ length transaction for consideration (i.e. a Voluntary
Transfer).

     

    (d) “Voluntary
Transfer” means
any Transfer that is neither an Involuntary Transfer, nor a Permitted Transfer,
nor a Non-Permitted Transfer on Death or Trustee Change, such as a Transfer to a
third party in an arms’ length transaction for consideration.

     

    8.2 Permitted
Transfer.  The Manager and each Member hereby consent to each
Permitted Transfer.  For each Permitted Transfer, the Transferor and
the Permitted Transferee shall (a) provide a Transfer Notice in accordance
with Section 8.6, and (b) comply with the
provisions of Section 8.7(b), Section 8.7(c), and Section 8.7(d).  Upon compliance with such
provisions, such Permitted Transferee shall become a Substitute
Member.  The provisions of Section 8.8 (Further Restrictions; Invalid Restrictions), and,
if the Transferor is a Deceased Member or Changed Trustee, Section 8.9 (Deceased Transferor or Changed Trustee) shall
apply to Permitted Transfers.  The provisions of Section 8.3 (Non-Permitted Transfer on Death or Trustee
Change), Section 8.4 (Purchase Option), and
Section 8.5 (ROFO) shall not apply to any
Permitted Transfer.

     

    8.3 Non-Permitted Transfer on Death or
Trustee Change.  If a Transfer is a Non-Permitted Transfer on
Death or Trustee Change (and thus, by definition, not a Permitted Transfer),
then the provisions of Section 8.2 (Permitted
Transfer), Section 8.4 (Purchase Option),
Section 8.5 (ROFO), and Section 8.8 (Further Restrictions; Invalid Restrictions) shall
not apply.  The provisions of Section 8.6 (Transfer Notice), Section 8.7 (Assignees Versus Substitute Members), and
Section 8.9 (Deceased Transferor or Changed
Trustee) shall apply to a Non-Permitted Transfer on Death or Trustee
Change.

     

    8.4 Involuntary Transfer (Purchase
Option).  Subject to the following sentence, upon the
occurrence of any Involuntary Transfer, the Transferor or such Transferor’s
purported Transferee or representative (collectively, the “Involuntary
Transferor”) is deemed to offer to sell first to the Company, and
thereafter to all Members other than the Involuntary Transferor (the “Non-Transferring
Member(s)”), the Transfer Interest for the consideration and on the
following terms and conditions (the “Purchase Option”).  

     

    
      
        
        

      

      
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    (a) Fair Market
Value.  The fair market value of a Transfer Interest (the
“Fair Market Value”)
means either (i) the aggregate fair market value agreed upon in writing by
the Involuntary Transferor (or, with respect to a Transfer upon the Bankruptcy
of a Transferor, as agreed upon by an unaffiliated third party appointed as
trustee by the court) and the Manager or (ii) if they do not mutually agree
on such value within thirty (30) calendar days of delivery of the Transfer
Notice, then an independent appraiser shall be appointed by the Manager within
sixty (60) calendar days of delivery of the Transfer Notice and such appraiser
shall promptly appraise the fair market value (after reduction for costs of sale
and after discounting the Transfer Interest for all applicable discounts), as of
the date of delivery of the Transfer Notice, which appraisal shall be the
binding and conclusive determination of the Fair Market Value.  The
costs of such appraisal shall be borne equally by the Company and the
Involuntary Transferor.  Such “applicable discounts” shall represent a
fair estimation of the minority, marketability, and any other valuation
discounts attributable to the Transfer Interest.  After the Fair
Market Value is so determined, the Manager shall so notify each of the Members
of such determination and of their rights under this Article 8.

     

    (b) Purchase Option
Notice.  On or before the later to occur of (i) forty-five
(45) calendar days following receipt of the appraisal set forth above, or
(ii) one hundred twenty (120) calendar days following the date of the
Transfer, the Company may, with the prior written consent of the Manager (in the
sole and absolute discretion of the Manager), elect to purchase all (but not
less than all) of the remaining Transfer Interest by delivering written notice
of such election to the Involuntary Transferor.  If the Company does
not so elect to purchase the entire Transfer Interest, then the Company shall
deliver a written notice to each of the Non-Transferring Member(s) of their pro
rata right to purchase the Transfer Interest.  Within thirty (30)
calendar days of receiving such notice, each Non-Transferring Member shall
deliver to the Company a written notice (the “Purchase Option Notice”)
specifying the maximum amount of the Transfer Interest that the Non-Transferring
Member desires to purchase.  Each Non-Transferring Member is entitled
to purchase (at a minimum) that Non-Transferring Member’s pro rata share of the
Transfer Interest, in the same proportion that the Non-Transferring Member’s
Percentage Interest bears to the aggregate Percentage Interests of all
Non-Transferring Member(s) electing to so purchase.  The Manager may
use any reasonable method to allow the Transfer Interest to be as fully
purchased by the Non-Transferring Member(s) as possible, and if the entire
Transfer Interest is not fully purchased, then the Company may purchase all (but
not less than all) of the balance of the Transfer Interest.  The
failure of a Non-Transferring Member to submit a written notice to the Manager
within the thirty (30) calendar day period described above constitutes an
election by the Non-Transferring Member not to purchase any of the Transfer
Interest.  The delivery by each Non-Transferring Member and/or if
applicable the Company (collectively, the “Purchase Option
Buyers”) of a Purchase Option Notice to the Involuntary Transferor
creates an irrevocable, binding contract between such Purchase Option Buyer and
the Involuntary Transferor for the purchase and sale of the Transfer
Interest.  The aggregate amount to be paid for the Transfer Interest
(the “Purchase Option Price”)
shall be the Fair Market Value.

     

    (c) Closing.  If
Purchase Option Notices are given by Purchase Option Buyers for all (but not
less than all) of the Transfer Interest, then the closing thereof shall occur
within ten (10) Business Days after the end of the last relevant period set
forth in Section 8.4(b).  On or
before the date of such closing, each Purchase Option Buyer shall pay its share
(based on the portion of the Transfer Interest that such Purchase Option Buyer
elected to purchase under Section 8.4(b)) of
the Purchase Option Price by delivering to the Involuntary Transferor (or, in
the event of a Bankruptcy of the Transferor, the Transferee) cash in an amount
not less than twenty percent (20%) of its pro rata share of the Purchase Option
Price and the balance of the Purchase Option Price evidenced by a non-negotiable
promissory note secured by a pledge of the portions of the Transfer Interest so
purchased.  The promissory note(s) and pledge agreement(s) evidencing
the purchase of the Transfer Interest shall be in such form and substance
satisfactory to counsel for the Company, and shall contain standard and
customary provisions for secured instruments.  The promissory note(s)
shall be payable in equal quarterly payments of principal and interest over a
period of ninety-six (96) months, with the first such payment commencing not
more than ninety (90) calendar days after such closing and shall bear interest
at the rate of ten percent (10%) per annum calculated on a cumulative (but not
compounded) basis, but no more than the maximum rate allowed by
law.  The maker of each promissory note may prepay all or part of the
principal of the promissory note without penalty.

     

    
      
        
        

      

      
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    (d) Entire Transfer Interest
Only.  The provisions of this Section 8.4 shall apply to the entire (but not less than the
entire) Transfer Interest and if the Company and/or the Non-Transferring
Member(s) do not elect to purchase the entire Transfer Interest, then the
provisions of this Section 8.4 shall not
apply.

     

    (e) Other
Provisions.  The provisions of Section 8.6 (Transfer Notice), Section 8.7 (Assignees Versus Substitute Members), and
Section 8.8 (Further Restrictions; Invalid
Restrictions) shall apply to an Involuntary Transfer.  The provisions
of Section 8.2 (Permitted Transfer) and
Section 8.5 (ROFO) shall not apply to an
Involuntary Transfer.

     

    8.5 Voluntary Transfer (Right of First
Offer).  Subject to the following sentence, prior to the
occurrence of any Voluntary Transfer, the Transferor shall offer the Transfer
Interest to all Non-Transferring Member(s) in accordance with the provisions of
this Section 8.5 (the “ROFO”).

     

    (a) Right of First
Offer.  The Non-Transferring Member(s) shall have the right to
purchase the Transfer Interest for a price equal to the Third Party Price and on
the terms of payment designated in the Transfer Notice.  If the
Transfer Notice provides for the payment of non-cash consideration, then any
Non-Transferring Member(s) electing to purchase may elect to pay the
consideration in cash in an amount equal to the good-faith estimate of the
present net fair market value of the non-cash consideration offered, as
determined by the Manager in the sole and absolute discretion of the
Manager.

     

    (b) Notice of
Election.  If there is one Non-Transferring Member, then on or
before ninety (90) calendar days after the giving of the Transfer Notice, the
Non-Transferring Member shall notify the Transferor in writing (the “ROFO
Notice”) of its desire to purchase all (but not less than all) of the
Transfer Interest.  If there are two or more Non-Transferring
Member(s), then the Company shall deliver a written notice to each of the
Non-Transferring Member(s) of their pro rata right to purchase the Transfer
Interest.  Within thirty (30) calendar days of receiving such notice,
each Non-Transferring Member shall deliver to the other Parties a ROFO Notice
specifying the maximum amount of the Transfer Interest that the Non-Transferring
Member desires to purchase.  Each Non-Transferring Member is entitled
to purchase (at a minimum) that Non-Transferring Member’s pro rata share of the
Transfer Interest, in the same proportion that the Non-Transferring Member’s
Percentage Interest bears to the aggregate Percentage Interests of all
Non-Transferring Member(s) electing to so purchase.  The Manager may
use any reasonable method to allow the Transfer Interest to be as fully
purchased by the Non-Transferring Member(s) as possible.  The failure
of a Non-Transferring Member to submit a written notice to the Manager within
the thirty (30) calendar day period described above constitutes an election by
the Non-Transferring Member not to purchase any of the Transfer
Interest.  The delivery by each Non-Transferring Member of a ROFO
Notice creates an irrevocable, binding contract between such Non-Transferring
Member and the Transferor for the purchase and sale of the Transfer
Interest.  Any closing of the purchase of such Transfer Interest by
the Non-Transferring Member(s), under this Section 8.5, shall occur at the same time as a closing would
have occurred pursuant to the Transfer Notice, but no earlier than thirty (30)
calendar days after the end of the last relevant period during which a Party has
an election to so purchase.

     

    
      
        
        

      

      
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    (c) Entire Transfer Interest
Only.  The provisions of this Section 8.5 shall apply to the entire (but not less than the
entire) Transfer Interest and if the Non-Transferring Member(s) do not elect to
purchase the entire Transfer Interest, then (i) the provisions of this
Section 8.5 shall not apply and (ii) with
respect to any Transfer Notice (related to a Voluntary Transfer) that is given
from and after the Environmental Work Completion Date, such Voluntary Transfer
shall be deemed a Permitted Transfer.

     

    (d) Other
Provisions.  The provisions of Section 8.2 (Permitted Transfer), Section 8.3 (Non-Permitted Transfer on Death or Trustee
Change), and Section 8.4 (Purchase Option)
shall not apply to a Voluntary Transfer (except as otherwise set forth in
Clause (ii) of Section 8.5(c)).  The provisions of Section 8.6 (Transfer Notice), Section 8.7 (Assignees Versus Substitute Members), and
Section 8.8 (Further Restrictions; Invalid
Restrictions) shall apply to a Voluntary Transfer.

     

    8.6 Transfer Notice.  In
the event of a proposed Transfer, the transferring Member (the “Transferor”)
shall provide written notice to the Manager and Members of such proposed
Transfer (the “Transfer
Notice”).  The Transfer Notice shall set forth the name and
address of the proposed transferee (the “Transferee”),
the intended effective date of the Transfer, the Transferor’s bona fide
intention or obligation to Transfer its Interest, the reasons for the Transfer,
the Interest or portion of an Interest to be transferred (the “Transfer
Interest”), the purchase price or consideration (the “Third Party
Price”), the terms of payment for the Transfer Interest, and any other
relevant details.  Prior to the later of the receipt of the Transfer
Notice or the effective date of the Transfer, the Company and the Manager may
treat a Transferor as the absolute owner in all respects of the Transfer
Interest, and neither the Company nor the Manager will incur any liability for
allocations of Profits or Losses, distributions, or transmissions of reports or
notices, made in good faith to a Transferor.

     

    8.7 Assignees Versus Substitute
Members.  Upon any Transfer, the Transferee shall, unless and
until admitted as a Substitute Member pursuant to this Section 8.7 (until admission as a Substitute Member, an “Assignee”),
hold only an Economic Interest and shall not be a Member or Substitute
Member.  To the fullest extent permitted by law, the Manager has no
duty (including without limitation any fiduciary duty) or obligation to an
Assignee.  Neither any Transfer nor the admission of a Substitute
Member shall release the Transferor from any liability to the
Company.  An Assignee may be admitted as a substitute Member (a “Substitute
Member”) only upon satisfaction of all of the following
conditions:

     

    
      
        
        

      

      
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    (a) Consent.  Except
with respect to a Permitted Transfer (which shall be deemed to have the consent
of all Parties), the prior written consent of the Manager, which consent shall
(i) prior to the Environmental Work Completion Date, be in the sole and
absolute discretion of the Manager, and (ii) thereafter, be subject to the
reasonable consent of the Manager.

     

    (b) Expenses.  The
Transferor and Transferee shall have paid or obligated themselves to pay all
reasonable expenses connected with the Assignee’s admission (as determined
solely by the Manager, but which expenses the Manager may, in the sole and
absolute discretion of the Manager, waive), including without limitation the
cost of preparing, filing, and publishing any appropriate
documents.

     

    (c) Securities
Laws.  The Transfer complies with applicable Securities Laws
and regulations under any Securities Laws.  With respect to a
Permitted Transfer, the Manager may, in the sole and absolute discretion of the
Manager, waive the provisions of this Section 8.7(c).

     

    (d) Acceptance of Assignment
Agreement.  The Company receives the Transferee’s executed
Acceptance of Assignment and Agreement To Be Bound in the form of attached Exhibit “D”,
under which the Transferee agrees to be bound by the terms of this Agreement
(and pursuant to which the Transferee expressly makes to the Manager and the
Company the representations and warranties of Article
10).

     

    (e) Other
Conditions.  Except with respect to a Permitted Transfer, such
other conditions as the Manager reasonably may impose.

     

    Any
Person who is an Assignee, but who is not a Substitute Member, and who desires
to make a further Transfer, is subject to all of the provisions of this Article 8 to the same extent and in the same manner as
any Member desiring to make a Transfer.  Upon the admission of a
Substitute Member, the Manager shall appropriately amend attached Exhibit “A”.  Upon
the effectiveness of any Transfer in which the Transferee remains an Assignee,
the Manager may, at the election of the Manager, amend attached Exhibit “A”
to reflect such Transfer.

     

    8.8 Further Restrictions; Invalid
Restrictions.  Notwithstanding anything to the contrary in this
Article 8, the following provisions shall
apply:

     

    (a) Events that Cause Dissolution,
Financing Acceleration, or Accounting Changes.  Other than upon
a Non-Permitted Transfer on Death or Trustee Change or upon a Permitted Transfer
that results from a Deceased Member or Changed Trustee, or upon the written
waiver of this Section 8.8(a) by the Manager
(in the sole and absolute discretion of the Manager), no Member may effect a
Transfer (i) if such Member is Owens, at any time prior to the
Environmental Work Completion Date, (ii) if such Transfer, when added to
the total of all other Interests sold or exchanged in the preceding twelve (12)
consecutive months, would cause the dissolution of the Company under the Code,
as determined by the Manager, (iii) if such Transfer would cause any
creditor to be entitled to accelerate any portion of the Company’s debt or would
require payment of an assumption or similar fee, or (iv) if such Transfer
would cause the Company to change its method of accounting.

     

    
      
        
        

      

      
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    (b) Effect of
Invalidity.  If any restriction set forth in this Article 8 is held to be unenforceable and invalid by a
nonappealable binding court or arbitrator order, judgment, decree, or decision,
then the Transferee shall become a holder of an Economic Interest with respect
to the Transfer Interest but shall not become a Substitute Member, and shall not
be entitled to vote or to participate in any manner in the management or affairs
of the Company.

     

    (c) No Withdrawal.  No
Member shall have the right to withdraw from the Company at any
time.

     

    8.9 Deceased Transferor or Changed
Trustee.  Upon any Transfer that results from a Member’s
becoming a Deceased Member or Changed Trustee (whether a Permitted Transfer or a
Non-Permitted Transfer on Death or Trustee Change), such Member’s personal or
authorized representative, including a successor trustee, has all the rights of
such Member for the purpose of settling or managing its estate, administering
its trust, or effecting the orderly disposition of its affairs or
business.

     

    8.10 Election to Adjust
Basis.  Upon any Transfer, the Tax Matters Partner may elect, in its sole
and absolute discretion, on behalf of the Company, to adjust the basis of the
property of the Company pursuant to Code Section 754.

     

    ARTICLE
9                                

     

    

     

    DISSOLUTION

     

    9.1 Dissolution.

     

    (a) Dissolution
Events.  The Company shall be dissolved and its affairs shall
be wound up upon the first to occur of any of the following events (each, a
“Dissolution
Event”):

     

    (i) By the
prior written consent of the Manager (which shall be in the sole and absolute
discretion of the Manager) and all Members (which shall be in their sole and
absolute discretion).

     

    (ii) The entry
of a decree of judicial dissolution pursuant to the Act.

     

    (iii) The
termination of the legal existence of the last remaining member of the Company
or the occurrence of any other event which terminates the continued membership
of the last remaining member of the Company unless the business of the Company
is continued in a manner permitted by the Act.  Notwithstanding
anything to the contrary in this Agreement, the Bankruptcy of a Member shall not
cause such Member to cease to be a member of the Company and upon the occurrence
of such an event, the Company shall continue without dissolution.

     

    
      
        
        

      

      
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    (iv) The sale
of all or substantially all of the assets of the Company.

     

    (b) Winding Up.  As soon
as is practicable following the occurrence of a Dissolution Event, the
appropriate representative of the Company shall commence winding up the
Company’s affairs in accordance with the Act and this Agreement.

     

    9.2 Effect of Dissolution
Event.  Upon the occurrence of a Dissolution Event, the Company
shall cease to carry on its business, except insofar as may be necessary to wind
up its business but its separate existence shall continue for the purpose of
winding up its affairs, prosecuting or defending actions by or against it in
order to collect and discharge obligations, disposing of and conveying its
property, and collecting and dividing its assets.

     

    9.3 Distribution of Assets upon
Dissolution.

     

    (a) Liabilities and
Distributions.  In settling accounts after dissolution of the
Company, the liabilities of the Company shall be entitled to satisfaction in the
following order and distributions shall be made thereafter in the following
order (to the extent not inconsistent with the order of priority as provided by
law):

     

    (i) First, to
satisfy creditors, in the order of priority as provided by law.  To
the extent not inconsistent with such priority, the Company shall pay any
outstanding debts and obligations of the Company that are currently due to
lenders and creditors, including debts and obligations owed to any Member or
Manager (or any Affiliate thereof), to the fullest extent permitted by
law.

     

    (ii) Next, to
a reserve as reasonably required for contingent liabilities of the Company
(after passage of a reasonable time the balance, if any, in such reserve shall
be distributed as set forth below).

     

    (iii) Next, to
distribute to each Member, in the manner and priority set forth in
Section 4.1(b)(iii), Section Error!
Reference source not found., Section 4.1(b)(iv), and Section 4.1(b)(v).

     

    (b) Other
Provisions.  Such distributions shall be made after
(i) the final allocations of Profits and Losses in connection with the
dissolution of the Company and the liquidation of its assets have been made, and
(ii) all such events, transactions, and allocations have been fully
reflected in the Members’ Capital Accounts as required by Treasury
Regulations 1.704-1(b).  Such distribution required by this
Section 9.3 shall be made by the end of the
Fiscal Year in which such dissolution occurs, or, if later, within ninety (90)
calendar days after the date of such dissolution, and shall otherwise comply
with the requirements of Treasury
Regulations 1.704-1(b).  Distributions pursuant to this
Section 9.3 may be made to a trust established
for the benefit of the Members for the purposes of liquidating the Company’s
assets, collecting amounts owed to the Company, and paying any contingent or
unforeseen liabilities or obligations of the Company or of the Manager arising
out of or in connection with the Company.  The assets of any such
trust shall be distributed to the Members from time to time, in the reasonable
discretion of the Manager, in the same proportions as the amount distributed to
such trust by the Company would otherwise have been distributed to the Members
pursuant to this Agreement.

     

    
      
        
        

      

      
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    (c) Deficit
Balances.  Except as otherwise specifically provided in this
Agreement, if any Member has a deficit balance in its Capital Account (after
giving effect to every Capital Contribution, distribution, and allocation for
all taxable years, including the year during which such “liquidation” occurs),
such Member shall have no obligation to make any Capital Contribution with
respect to such deficit, and such deficit shall not be considered a debt owed to
the Company or any other Person for any purpose whatsoever.

     

    9.4 Filing of Certificate of
Cancellation.  Upon completion of the winding up of the
Company, and when all debts, liabilities, and obligations of the Company have
been paid and discharged or adequate provisions have been made therefor and all
of the remaining property and assets of the Company have been distributed to the
Members, a certificate of cancellation shall be executed and filed with the
Delaware Secretary of State in accordance with the Act.

     

    9.5 Winding Up.  Except
as provided by law, upon dissolution of the Company, each Member shall look
solely to the assets of the Company for the return of such Member’s Capital
Contribution.  If the property of the Company remaining after the
payment, discharge or satisfaction of the debts and liabilities of the Company
is insufficient to return the Capital Contribution of each Member, then such
Member shall have no recourse against any other Member.  Except as
otherwise prescribed by law, the winding up of the affairs of the Company and
the distribution of its assets shall be conducted exclusively by the Manager,
who is hereby authorized to take all actions necessary to accomplish such
distribution, including without limitation selling any assets of the Company
deemed necessary or appropriate to sell by the Manager.

     

    9.6 Allocations Upon
Dissolution.  The tax allocation provisions of this Agreement
are intended to produce final Capital Account balances that are at levels
(“Target
Final Balances”) which permit liquidating distributions that are made in
accordance with such final Capital Account balances to be equal to the priority
distributions that would occur if such liquidating proceeds were distributed
pursuant to Section 9.3.  To the
extent that the tax allocation provisions of this Agreement would not produce
the Target Final Balances, the Members agree to take such actions as are
necessary to amend such provisions to produce such Target Final
Balances.  Notwithstanding the other provisions of this Agreement,
allocations of Company gross income and deductions shall be made prospectively
in relation to such liquidation as reasonably necessary (as determined by the
Tax Matters Partner in its sole and absolute discretion) to produce such Target
Final Balances (and, to the extent such prospective allocations would not reach
such result, the prior tax returns of the Company shall be, as determined by the
Tax Matters Partner in its sole and absolute discretion, amended to reallocate
Company gross income and deductions to produce such Target Final
Balances).

     

    9.7 No Action for
Dissolution.  Except as expressly permitted in this Agreement,
to the fullest extent permitted by law, a Member shall not take any voluntary
action that directly causes a Dissolution Event.  The Members
acknowledge that irreparable damage would be done to the goodwill and reputation
of the Company if any Member should bring an action in court to dissolve the
Company under circumstances where dissolution is not otherwise required by
Section 9.1.  This Agreement has been
drawn carefully to provide fair treatment of all
Members.  Accordingly, except where the Manager has failed to
liquidate the Company as required by this Article 9,
each Member hereby waives and renounces, to the fullest extent permitted by law,
such Member’s right to initiate legal action to seek the appointment of a
receiver or trustee to liquidate the Company or to seek a decree of judicial
dissolution of the Company on the ground that (a) it is not reasonably
practicable to carry on the business of the Company in conformity with the
Certificate of Formation or this Agreement, or (b) dissolution is
reasonably necessary for the protection of the rights or interests of the
complaining Member.  Damages for breach of this Section 9.7 shall be monetary damages only (and not specific
performance), and the damages may be offset against distributions by the Company
to which such Member would otherwise be entitled.

     

    
      
        
        

      

      
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    9.8 Merger.  The Company
may, upon the approval of the Manager and a Voting Majority (which
shall be in its or their sole and absolute discretion), merge pursuant to an
agreement of merger with or into one or more Entities formed or organized under
the laws of the State of Delaware or any other state of the United States or any
foreign country or other foreign jurisdiction, with such Entity as the merger
agreement shall provide being the surviving or resulting Entity, without the
consent of any other Person.

     

    ARTICLE
10                                

     

    

     

    INVESTOR
PROVISIONS

     

    10.1 Representations and
Warranties.  Each Member hereby represents and warrants to, and
agrees with, the Manager, the other Members, and the Company as
follows:

     

    (a) Preexisting Relationship or
Experience.  Either (i) such Member has a preexisting
personal or business relationship with the Company or the Manager, officers, or
control persons, or (ii) by reason of such Member’s business or financial
experience, or by reason of the business or financial experience of such
Member’s financial advisor who is unaffiliated with and who is not compensated,
directly or indirectly, by the Company or any Affiliate or selling agent of the
Company, such Member is capable of evaluating the risks and merits of an
investment in the Interests and of protecting such Member’s own interests in
connection with this investment.

     

    (b) No
Advertising.  Such Member has not seen, received, been
presented with, or been solicited by any leaflet, public promotional meeting,
newspaper or magazine article or advertisement, radio or television
advertisement, or any other form of advertising or general solicitation with
respect to the sale of the Interests.

     

    (c) Investment
Intent.  Such Member is acquiring the Interest for investment
purposes for such Member’s own account only, and not with a view to or for sale
in connection with any distribution of all or any part of the
Interest.  No other Person will have any direct or indirect beneficial
interest in or right to such Member’s Interest.

     

    
      
        
        

      

      
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    (d) Purpose of
Entity.  If the Member is a corporation, partnership, limited
liability company, trust, or other Entity, then it was not organized for the
specific purpose of acquiring the Interest.

     

    (e) No Registration of
Interest.  Such Member acknowledges that the Interests have not
been registered or qualified under any Securities Laws, in part, on such
Member’s representations, warranties, and agreements in this
Agreement.  Such Member represents, warrants, and agrees that neither
the Company nor the Manager is under an obligation to register or qualify the
Interests under any Securities Laws, or to assist such Member in complying with
any exemption from registration and qualification.

     

    (f) Restricted
Securities.  Such Member understands that the Interests are
“restricted securities” under the Securities Act of 1933, as amended, in that
the Interests will be acquired from the Company in a transaction not involving a
public offering, and that the Interests may be resold without registration under
the Securities Act of 1933, as amended, only in certain limited circumstances,
and that otherwise the Interests must be held indefinitely.

     

    (g) No Disposition in Violation of
Law.  Without limiting the representations set forth above,
such Member will not make any disposition of all or any part of such Member’s
Interest which will result in the violation by such Member or by the Company of
the Securities Laws.  Without limiting the foregoing, such Member
agrees not to make any disposition of all or any part of the Interest unless and
until the following conditions are fully satisfied:

     

    (i) There is
then in effect a registration statement under the Securities Act of 1933, as
amended, covering such proposed disposition and such disposition is made in
accordance with such registration statement and any applicable requirements of
other Securities Laws; or

     

    (ii) (A) Such
Member has notified the Company of the proposed disposition and has furnished
the Company with a detailed statement of the circumstances surrounding the
proposed disposition, and (B) if reasonably requested by the Manager, such
Member has furnished the Company with a written opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration
of any securities under the Securities Act of 1933, as amended, or the consent
of or a permit from appropriate authorities under any other applicable
Securities Laws.

     

    (h) Investment
Risk.  Such Member acknowledges that the Interests are a
speculative investment which involves a substantial degree of risk of loss by
such Member, that such Member understands and takes full cognizance of the risk
factors related to the purchase of the Interest, and that (if applicable) the
Company is newly organized.  Such Member has the financial ability to
bear the economic risk of its participation in the Company, has adequate means
of providing for current needs and contingencies and has no need for liquidity
with respect to its Interest.  Such Member is financially able to bear
the economic risk of an investment in the Interest, including the total loss of
such investment.

     

    (i) Information
Reviewed.  Such Member has received and reviewed all
information such Member considers necessary or appropriate for deciding whether
to purchase the Interest.  Such Member has had an opportunity to ask
questions and receive answers from the Company and its Manager, officers, and
employees regarding the terms and conditions of purchase of the Interest and
regarding the business, financial affairs, and other aspects of the Company, and
has further had the opportunity to obtain all information (to the extent the
Company possesses or can acquire such information without unreasonable effort or
expense) which such Member deems necessary to evaluate the investment and to
verify the accuracy of information otherwise provided to such
Member.  Such Member is purchasing its Interest in reliance solely on
(i) its independent verification of the accuracy of (A) any documents
delivered by the Manager to the Member and (B) any statements made by the
Manager (or Affiliate) to the Member concerning the Company, and (ii) the
opinions and advice concerning the Company of consultants engaged by such
Member.

     

    
      
        
        

      

      
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    (j) No Representations by
Company.  Neither the Manager, nor any agent or employee of the
Company or of the Manager, or any other Person, has at any time expressly or
implicitly represented, guaranteed, or warranted to such Member that a
percentage of profit and/or amount or type of consideration will result from an
investment in the Interest, that past performance or experience on the part of
the Manager or Affiliates or any other Person in any way indicates the
predictable results of the ownership of the Interest or of the overall Company
business, that any cash distributions from Company operations or otherwise will
be made to the Members by any specific date or will be made at all, or that any
specific tax benefits will accrue as a result of an investment in the
Company.

     

    (k) Consultation with
Attorney.  Such Member has been advised to consult with such
Member’s own attorney regarding all legal matters concerning an investment in
the Company and the tax consequences of participating in the Company, and has
done so, to the extent such Member considers necessary.

     

    (l) Tax
Consequences.  Such Member acknowledges that the tax
consequences to such Member of investing in the Company will depend on such
Member’s particular circumstances, and neither the Company, the Manager, the
Members, nor the shareholders, members, managers, agents, officers, directors,
employees, Affiliates or consultants of any of them will be responsible or
liable for the tax consequences to such Member of an investment in the
Company.  Such Member will look solely to, and rely upon, such
Member’s own advisers with respect to the tax consequences of this
investment.

     

    (m) No Assurance of Tax
Benefits.  Such Member acknowledges that there can be no
assurance that the Code or the Treasury Regulations will not be amended or
interpreted in the future in such a manner so as to deprive the Company and the
Members of some or all of the tax benefits they might now receive, or that some
of the deductions claimed by the Company or the allocations of items of income,
gain, loss, deduction, or credits among the Members may not be challenged by the
IRS.

     

    (n) Non-Foreign
Person.  Such Member hereby certifies that such Member
(i) is not a foreign corporation, foreign partnership, foreign trust, or
foreign estate (as those terms are defined in the Code and Treasury
Regulations), (ii) is not a disregarded entity as defined in Code
Section 1.1445-2(b)(2)(iii), (iii) the “TIN” for such Member, as set
forth in attached Exhibit “A”
or otherwise disclosed to the Manager is accurate, (iv) the “address” for
such Member; in attached Exhibit “A”
for such Member is accurate, and (v) such Member understands that the
certifications set forth in this Section 10.1(n) may be disclosed to the IRS by the Manager and
that any false statement contained in this Section 10.1(n) could be punished by fine, imprisonment, or
both.  Under penalties of perjury, such Member declares that such
Member has examined this certification and to the best of such Member’s
knowledge and belief it is true, correct, and complete, and such Member further
declares that such Member has authority to sign this Agreement.

     

    
      
        
        

      

      
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    (o) Accredited
Investor.  Such Member is an “accredited investor” within the
meaning of Regulation D of the Securities Act of 1933, as amended, and is
included within one or more of the following “accredited investor” categories of
such Regulation D:

     

    (i) Any
natural person whose individual net worth, or joint net worth with that natural
person’s spouse, at the time of such natural person’s purchase, exceeds One
Million Dollars ($1,000,000).

     

    (ii) Any
natural person who had an individual income in excess of Two Hundred Thousand
Dollars ($200,000) in each of the two most recent years or joint income with
that natural person’s spouse in excess of Three Hundred Thousand Dollars
($300,000) in each of those years and has a reasonable expectation of reaching
the same income level in the current year.

     

    (iii) Any
Entity in which all of the equity owners are accredited investors.

     

    For
purposes of this Section 10.1(o), the term “net
worth” means the excess of total assets over total liabilities.  In
computing net worth for the purposes of category (i) above, such Member’s
principal residence must be valued either at (A) cost, including the cost
of improvements, net of current encumbrances upon the property or (B) the
appraised value of the property as determined upon a written appraisal used by
an institutional lender making a loan to the individual secured by the property,
including the cost of subsequent improvements, net of current encumbrances upon
the property.  In determining income, such Member should add to such
Member’s adjusted gross income any amounts attributable to tax exempt income
received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to an IRA or Keogh retirement
plan, alimony payments, and any amount by which income from long-term capital
gains has been reduced in arriving at adjusted gross income.

     

    (p) Patriot Act.  Such
Member, and any direct or indirect beneficial owner of such Member, (i) are
currently and have been at all times in full compliance with all Patriot Act
Related Laws, and (ii) are not and have never been a Person (A) that
is listed in the Annex to, or is otherwise subject to the provisions of, the
Executive Order, (B) owned or controlled by, or acting for or on behalf of,
any Person that is listed in the Annex to, or is otherwise subject to the
provisions of, the Executive Order, (C) with whom a party is prohibited
from dealing or otherwise engaging in any transaction by any anti-money
laundering law, (D) who commits, threatens or conspires to commit or
support “terrorism” as defined in the Executive Order, (E) that is named as
a “specially designated national and blocked person” on the most current list
published by the U.S. Department of the Treasury, Office of Foreign Assets
Control at its official website,
http://www.ustreas.gov/offices/enforcement/ofac/ or at any replacement website
or other replacement official publication of such list, or (F) who is an
Affiliate of a Person listed above.  The funds invested by such Member
in the Company, and all funds received, directly or indirectly, by such Member
from any direct or indirect beneficial owner of such Member, are derived from
legal sources and without violation of any Patriot Act Related
Laws.  Such Member consents to the Company’s performing a search of
applicable governmental lists prior to acceptance of such Member as a Member,
which search may be performed by a third party firm.  Such Member
shall provide to the Company prior thereto, and from time to time thereafter as
requested by the Company, all information reasonably required by the Company to
establish compliance with the provisions set forth in this Section 10.1(p).  Such Member shall immediately
notify the Company in writing of the relevant facts and circumstances if any
representation or warranty set forth in this Section 10.1(p) is no longer true or accurate in any
respect.  Without limiting any provisions in this Agreement, it is
further agreed that no transfer of any direct or indirect interest in the
Company, or of the equity or other beneficial ownership interests in any such
Member that is an Entity, shall be effective until the transferee has provided a
written certification by the transferee to the Company that the transferee shall
be bound by, subject to and shall comply with all of the provisions set forth in
this Section 10.1(p).

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    10.2 Brokers
Indemnity.  Each Member or Manager represents and warrants that
such Member or Manager has had no contact or dealings regarding this Agreement,
the formation of the Company, or any transfer of all or any part of the Property
through any investment banker, broker or other Person who can claim a right to
any compensation in connection with this Agreement, such formation, or such
transfer.  If any investment banker, broker or other Person claims any
compensation in connection with this Agreement, such formation, or such
transfer, then the Member or Manager through whom the investment banker, broker
or other Person makes its claim shall, to the fullest extent permitted by law,
indemnify, defend, and hold harmless the other Members or Manager, their board
members, officers, directors, shareholders, partners, beneficiaries, trustees,
employees, internal investment contractors, representatives, and Affiliates, and
the Company, from and against any and all liability, loss (including without
limitation court costs and expert witnesses’ and attorneys’ fees) which any of
them may suffer or incur by reason of any such claim.  The provisions
of this Section 10.2 shall survive the
dissolution and termination of the Company.

     

    10.3 Indemnity.  Each
Member shall indemnify, hold harmless, and defend the Company, the Manager, each
and every other Member, and each of their respective Affiliates 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, by reason of or arising from any misrepresentation,
misstatement of facts, or omission to represent or state facts made by such
Member in this Article 10, against losses,
liabilities, and expenses of the Company, the Manager, each and every other
Member, and each of their respective Affiliates incurred by such Person in
connection with such action, suit, proceeding, or the like (including attorneys’
fees, judgments, fines, and amounts paid in settlement).

     

    10.4 Legal
Representation.  NV Manager (“Law Firm
Client”) has retained Cooley Godward Kronish LLP (“Law Firm”)
to prepare this Agreement.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    (a) In General.  Each
Member is advised that it is entitled to be represented by counsel of its choice
with respect to becoming a Member in the Company, and each Member or potential
Member should seek advice from its own counsel in regard to its investment in
the Company and execution of this Agreement.  Each Member acknowledges
that it has sought advice from its own separate legal counsel in this regard or
has chosen not to do so.  Each Member acknowledges that Law Firm has
not undertaken any and has no duty or obligation of any kind to any Member, in
connection with this Agreement, all other documents contemplated by this
Agreement, and/or the Property.

     

    (b) Legal Advice to Law Firm
Client.  From time to time, subject to the Rules of
Professional Conduct of the State Bar of California, Law Firm shall be permitted
to render legal advice and to provide legal services to the Law Firm Client and
its Affiliates with respect to the Property, the Company or
otherwise.  In no event does or will an attorney/client relationship
exist between Law Firm on the one hand, and any other Member or any of their
respective Affiliates, on the other hand, in the absence of an express written
engagement agreement between such Member and Law Firm.

     

    (c) Legal Advice to
Company.  To the extent requested by Law Firm Client or its
Affiliates, and subject to the Rules of Professional Conduct of the State Bar of
California, Law Firm shall be permitted to render legal advice and to provide
legal services to the Company, the Manager, and each Affiliate of the
Manager.  Each Member agrees that such representation, including of
the Company by Law Firm, from time to time, does not disqualify Law Firm from
providing legal advice and legal services (as set forth in this Section 10.4) at any time in the future.

     

    (d) Law Firm Client or
Company.  Each Member will at all times continue to engage and
consult with its own separate legal counsel, if any, in connection with matters
and affairs relating to the Company.  If any dispute or controversy
arises between any Member and the Company, on one hand, and any one or more of
Law Firm Client or its Affiliates on the other hand, then each Member agrees
that Law Firm may represent either the Company or Law Firm Client (or its
Affiliates), or both or all of them, in any such dispute or controversy to the
extent permitted by the Rules of Professional Conduct of the State Bar of
California or similar rules in any other jurisdiction and each Member hereby
consents to such representation.

     

    ARTICLE
11                                

     

    

     

    MISCELLANEOUS
PROVISIONS

     

    11.1 Notices.  Notwithstanding
anything to the contrary in this Agreement, any notice, approval, consent,
waiver, payment, request, instruction, order, determination, vote, decision,
direction, demand, requirement, communication, or similar action or conduct
required or permitted to be given to or by any Party under this Agreement shall
be in writing, shall be sent via one of the following methods of delivery to the
address for notices set forth in attached Exhibit “A”,
as amended from time to time, and shall be deemed to have been duly given, made,
delivered, and received as of the date of actual delivery or if delivery is
refused, then as of the date presented: (a) by personal delivery;
(b) by Federal Express, UPS, DHL, United States Postal Service Express
Mail, or other overnight delivery service that provides written confirmation of
delivery and receipt; or (c) by certified U.S. Mail, return receipt
requested, postage prepaid.  Any telephone, fax or email information
provided in this Agreement is for informational purposes only and shall not
modify or expand the methods of notice delivery set forth in this
Section 11.1.  Any Party may change
its notice address(es) or add additional notice address(es) by notice to each
other Party in accordance with the provisions of this Section 11.1.  Notices given by counsel for any
Party, on behalf of such Party, shall be deemed a valid notice under this
Section 11.1 if addressed and sent in
accordance with the provisions of this Section 11.1.

     

    
      
        
        

      

      
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    11.2 Enforcement and Attorney’s
Fees.  If a dispute arises concerning the performance, meaning,
or interpretation of any provision of this Agreement or any document executed in
connection with this Agreement, the prevailing Party in such dispute, including
under Section 11.3, shall be awarded any and
all costs and expenses incurred by such prevailing Party in enforcing,
defending, or establishing its rights under this Agreement or such document
including without limitation court costs and expert witnesses’ and attorneys’
fees.  In addition to the foregoing award of costs and fees, such
prevailing Party shall also be entitled to recover its court costs and expert
witnesses’ and attorneys’ fees incurred in any post-judgment proceedings to
collect or enforce any judgment.  This provision is separate and
several and shall survive the merger of this Agreement or any such other
document into any judgment on this Agreement or such document.

     

    11.3 Dispute
Resolution.

     

    (a) Notification of
Disputes.  If any dispute (the “Dispute”)
arises (i) out of or relating to this Agreement or any alleged breach of
this Agreement, (ii) with respect to any of the transactions or events
contemplated by this Agreement, (iii) with respect to any indemnity
provisions or obligations of this Agreement, and/or (iv) between or among
any Parties with respect to any approval, consent, request, instruction, order,
determination, vote, decision, direction, demand, requirement, communication, or
similar action or conduct required or permitted to be given to or by any Party
under this Agreement (whether as the Manager or as a Member), then any Party
that is a party to such Dispute may, at its election, in its sole and absolute
discretion, and as its sole remedy for such Dispute, trigger the provisions of
this Section 11.3 by so notifying in writing
(the “Dispute
Notice”) each other Party that is a party to such Dispute (such notifying
Party and such other Party(ies), collectively, the “Dispute
Parties” and, individually, a “Dispute
Party”) with a copy to, if not a party to such Dispute, the
Manager.

     

    (b) Negotiated
Resolution.  If any Party gives a Dispute Notice pursuant to
Section 11.3(a), then the Dispute Parties shall
meet at least twice within the thirty (30) calendar day period commencing with
the date of the giving of the Dispute Notice and in good faith shall attempt to
resolve such Dispute.

     

    (c) Mediation.  If such
Dispute is not resolved or settled by the Dispute Parties through negotiations
pursuant to Section 11.3(b), then the Dispute
Parties shall submit such Dispute to non-binding mediation before a retired
judge of a federal District Court or California Superior, Appellate, or Supreme
Court, or some similarly qualified, mutually agreeable
individual.  The Dispute Parties shall bear the costs of such
mediation equally.  Such mediator must be selected by the Dispute
Parties on or before fifteen (15) calendar days after the end of such thirty
(30) calendar day “negotiated resolution” period following the Dispute Notice,
and such mediation must be concluded within thirty (30) calendar days after the
selection of such mediator.  If either of such deadlines is not met,
then the provisions of Section 11.3(d) shall
apply.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    (d) Arbitration.  If
either of the deadlines set forth in Section 11.3(c) is not met, then, upon written request (the
“Arbitration
Notice”) by any Dispute Party (given within twenty (20) calendar days
thereafter), the Dispute shall be determined by arbitration before one impartial
arbitrator (the “Arbitrator”).  Such
arbitration shall be submitted to and administered by the Judicial Arbitration
and Mediation Services or its successor pursuant to its then-current
“Comprehensive Arbitration Rules and Procedures,” as modified by this Agreement
(“JAMS”)
(and if, at any time, JAMS no longer exists for such purposes, then all
references in this Agreement to JAMS shall be deemed to mean the American
Arbitration Association pursuant to its “Commercial Arbitration” rules as
modified by this Agreement).

     

    (i) Location.  Such
arbitration shall be conducted in Santa Clara County, California (or any other
location that is determined mutually by the Dispute Parties, each in their sole
and absolute discretion).

     

    (ii) Selection of
Arbitrator.  The Dispute Parties shall immediately, but no
later than fifteen (15) calendar days after the giving of the Arbitration
Notice, jointly select the Arbitrator.  If the Dispute Parties do not
agree on the Arbitrator within such 15-calendar day period, then the Arbitrator
shall be appointed in accordance with relevant California law.

     

    (iii) Discovery and
Depositions.  The Arbitrator shall, in his or her reasonable
discretion, allow for reasonable discovery requests including without limitation
production of relevant documents and depositions.

     

    (iv) No Punitive
Damages.  Notwithstanding anything to the contrary in this
Agreement, absent a finding of fraud, the Arbitrator shall not be authorized to
award punitive damages with respect to any such claim or controversy, nor shall
any Dispute Party seek or be awarded punitive damages relative to any matter
under, arising out of, or relating to this Agreement in any other
forum.

     

    (v) Costs and
Expenses.  Each Dispute Party shall bear its own costs of any
arbitration under this Agreement (including without limitation legal fees, the
cost of the record or transcripts of such arbitration, if any, and
administrative fees), or an equal share of such fees and costs that are not
specific to such Dispute Party.  Notwithstanding the foregoing, if a
Dispute Party is determined by the Arbitrator not to be prevailing, then such
non-prevailing Dispute Party shall be responsible for all such fees and costs
(as determined by the Arbitrator) unless such non-prevailing Dispute Party is
nevertheless found by the Arbitrator to be entitled to indemnity under
Section 5.5 (in which case the Company shall be
responsible for such non-prevailing Dispute Party’s fees and costs and such
non-prevailing Dispute Party shall not be liable for the fees and costs of the
prevailing Dispute Party(ies)).

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    (vi) Deadline for
Arbitrator.  Each Dispute Party shall instruct the Arbitrator
to render his or her decision no later than, and each Dispute Party shall use
its good faith efforts to cause the Arbitrator’s decision to be issued on or
before, sixty (60) calendar days after the selection of the
Arbitrator.

     

    (vii) Effect of Arbitrator’s
Determination.  In all cases, the determination of the
Arbitrator shall be final and binding on each Dispute Party.  Judgment
on the Arbitrator’s award may be entered in any court having
jurisdiction.

     

    (viii) Provisional Judicial
Relief.  Notwithstanding anything to the contrary in this
Section 11.3, any Dispute Party may seek any
provisional remedy available at law or in equity in any state or federal court
in Santa Clara County, California without compromising the right and obligation,
subject to Section 11.3(a) and Section 11.3(c), to arbitrate ultimately and finally all
Disputes.

     

    11.4 Choice of Law.  This
Agreement, and the application or interpretation of this Agreement, shall be
governed exclusively by its terms and by the internal laws of the State of
California, without regard to principles of conflict of laws.

     

    11.5 Jurisdiction.  Subject
to the provisions of Section 11.3, each Party
hereby consents to the exclusive jurisdiction of the state and federal courts
sitting in California in any action on a claim arising out of, under, or in
connection with this Agreement or the transactions contemplated by this
Agreement, provided such claim is not required to be arbitrated pursuant to
Section 11.3 and, subject to Section 11.3, any Member may maintain a legal action or
proceeding in the courts of the State of Delaware with respect to matters
relating to the organization or internal affairs of the Company.  Each
Party further agrees that personal jurisdiction over such Party may be effected
by service of process by registered or certified mail addressed as provided in
Section 11.1, and that when so made shall be as
if served upon such Party personally within the State of
California.

     

    11.6 Signer’s
Warranty.  Each individual executing this Agreement on behalf
of an Entity hereby represents and warrants to the other Parties that
(a) such individual has been duly and validly authorized to execute and
deliver this Agreement and any and all other documents contemplated by this
Agreement on behalf of such Entity, and (b) this Agreement and all
documents executed by such individual on behalf of such Entity pursuant to this
Agreement are and will be duly authorized, executed, and delivered by such
Entity.

     

    11.7 Waiver of Action for
Partition.  Each Member irrevocably waives during the term of
the Company any rights that it may have to maintain any action for partition
with respect to the property of the Company.

     

    11.8 Amendments.  The
provisions of this Agreement may be amended only as follows.

     

    (a) Exhibit “A”.  The
Manager may unilaterally amend attached Exhibit “A”
to the extent in strict accordance with express provisions of this
Agreement.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    (b) Certificate of
Formation.  The provisions of the Certificate of Formation may
be amended only with the written approval of the Manager and a Voting Majority,
except that amendments to the Certificate of Formation required by applicable
law or express provisions of this Agreement need not be approved by any
Members.

     

    (c) Financing.  The
Manager may unilaterally amend this Agreement to the extent required by any
lender providing any Financing, except that no such amendment shall adversely
modify the distributions due any Member in a manner that is different than how
all other Members are affected by such amendment, without the prior written
consent of the adversely affected Member.

     

    (d) Other
Amendments.  All other amendments require the written approval
of the Manager and all Members (which shall be in its and their sole and
absolute discretion).  No amendment shall, without the unanimous
signed, written consent of all Parties, amend this Section 11.8.

     

    11.9 Waivers.  The
failure of any Party to seek redress for violation of or to insist upon the
strict performance of any covenant or condition of this Agreement shall not
prevent a subsequent act, which would have originally constituted a violation,
from having the effect of an original violation.  Any waiver of any
provision of this Agreement and any consent to any departure of any Party from
the terms of any provision of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.

     

    11.10 Rights and Remedies
Cumulative.  The rights and remedies provided by this Agreement
are cumulative, and the use of any one right or remedy by any Party shall not
preclude or waive the right to use any or all other remedies.  Such
rights and remedies are given in addition to any other rights the Parties may
have by law, statute, ordinance, or otherwise.

     

    11.11 Time and
Days.  Unless otherwise specified, in computing any period of
time described in this Agreement, the day of the act or event after which the
designated period of time begins to run is not to be included and the last day
of the period so computed is to be included, unless such last day is not a
Business Day, in which event the period shall run to and include the next day
which is a Business Day.

     

    11.12 Additional Documents and
Acts.  Each Party shall execute and deliver such additional
documents and instruments and perform such additional acts as may be necessary
or appropriate to effectuate, carry out, and perform all of the terms,
provisions, and conditions of this Agreement and the transactions contemplated
hereby.

     

    11.13 Heirs, Successors, and
Assigns.  Each and all of the covenants, terms, provisions, and
agreements contained in this Agreement shall be binding upon and inure to the
benefit of the Parties and, to the extent permitted by this Agreement, their
respective heirs, legal representatives, successors, and assigns.

     

    11.14 Parties in Interest; No Third Party
Beneficiaries.  Except as expressly provided in the Act,
nothing in this Agreement shall (a) confer any rights or remedies on any
Person other than the Manager and the Members and their respective successors
and permitted assigns, (b) relieve or discharge any obligation or liability
of any third party to any Member or Manager, or (c) give any third party
any right of subrogation or action over or against any Member or
Manager.  None of the provisions of this Agreement shall be for the
benefit of or enforceable by any third-party creditor of the
Company.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    11.15 Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.

     

    11.16 Severability of
Provisions.  If any provision of this Agreement or the
application of such provision to any Person or circumstance shall be invalid,
illegal, or unenforceable to any extent, then the remainder of this Agreement
and the application of such remainder shall not be affected and shall be
enforceable to the fullest extent permitted by law.

     

    11.17 Complete
Agreement.  This Agreement, each exhibit to this Agreement, and
the Certificate of Formation constitute the complete and exclusive statement of
agreement among the Parties with respect to the subject matter of this Agreement
and the Certificate of Formation and replace and supersede all prior written and
oral agreements or statements by and between the Parties or any of
them.  No representation, statement, condition, or warranty not
contained in this Agreement or the Certificate of Formation shall be binding on
the Parties or have any force or effect whatsoever.

     

    11.18 Appendices, Schedules, and
Exhibits.  All references in this Agreement to exhibits, and
schedules shall, unless otherwise expressly provided, be deemed to be references
to the appendices, exhibits, and schedules attached to this
Agreement.  All such appendices, exhibits, and schedules attached to
this Agreement are incorporated into this Agreement as though fully set forth in
this Agreement.

     

    11.19 Interpretation.  When
required by the context, the singular number shall include the plural, and the
masculine gender shall include the feminine and neuter genders, and vice
versa.

     

    11.20 Construction.  Each
Party has been represented by legal counsel in connection with the negotiation
of the transactions in this Agreement and the drafting and negotiation of this
Agreement (or has knowingly elected not to be represented by legal
counsel).  Each Party (and if it elected to be represented by legal
counsel, its legal counsel) has or have had an opportunity to review and suggest
revisions to the language of this Agreement.  Accordingly, it is the
intent of the Parties that no provision of this Agreement shall be construed for
or against or interpreted to the benefit or disadvantage of any Party by reason
of any Party’s having or being deemed to have structured or drafted such
provision.  If any claim is made by any Party relating to any
conflict, omission, or ambiguity in this Agreement, then no presumption or
burden of proof or persuasion shall be implied by virtue of the fact that this
Agreement was prepared by or at the request of a particular Party or such
Party’s counsel.

     

    11.21 Headings.  The
headings in this Agreement are inserted for convenience only and are in no way
intended to describe, interpret, define, or limit the scope, extent, or intent
of this Agreement or any provision of this Agreement.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    11.22 Statutes.  Any
reference in this Agreement to any statute, law, ordinance, code, or regulation,
or any section or provision thereof, shall be deemed to include any future
amendments thereto and any similar provisions of law that may hereafter replace
or be substituted for such provision, whether or not designated by the same
title or number.

     

    11.23 Cross-References.  All
cross-references in this Agreement, unless specifically directed to another
agreement or document, refer to provisions within this Agreement.

     

    11.24 Consents.  All
references in this Agreement to the “sole and absolute discretion” of a Person
(with respect to consents, votes, determinations, decisions and similar actions
by such Person) shall be deemed to allow such Person to have complete and total
latitude to provide or withhold such consent, vote, determination, decision or
action, even if acting arbitrarily, capriciously, or unreasonably.

     

    11.25 Articles in
Exhibits.  The provisions of Article
12 of this Agreement are set forth in attached Exhibit “B”.  The
provisions of Article 13 of this Agreement are set
forth in attached Exhibit “C”.

     

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OF PAGE INTENTIONALLY LEFT BLANK]

     

    

      

    

    
      
        
        

      

      
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      1 Initial
Capital Contributions, Allocation and other Tax provisions subject to review by
Cooley tax partner Bill Morrow.

    

      
      2 Subject
to review and comments by Cooley environmental partners.

       

    

    
      
        
          
            	
                    587048 v8/SD
    

                  	
                    --

                  	 
      

          

          

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Manager

     

    NV
MANAGER, LLC, a California limited liability company

     

    By:
Nanook Ventures, LLC, a Delaware limited liability company, Manager

     

    
      	
               
      

            	
              By:
      Nanook Interests LLC, a Delaware limited liability Company, Managing
      Member

            

    

     

    
      	
               
      

            	
              By:
      Nanook Management LLC, a Delaware limited liability company, Managing
      Member

            

    

     

    
      	
               
      

            	
              By:
      /s/ Lammot J.
      DuPont

            

    

     

    
      	
               
      

            	
              Name:
      Lammot J.
      DuPont

            

    

     

    
      	
               
      

            	
              Title:
      Manager

            

    

     

    Members

     

    NANOOK
VENTURES LLC, a Delaware limited liability company

     

    
      	
               
      

            	
              By:
      Nanook Interests LLC, a Delaware limited liability Company, Managing
      Member

            

    

     

    
      	
               
      

            	
              By:
      Nanook Management LLC, a Delaware limited liability company, Managing
      Member

            

    

     

    
      	
               
      

            	
              By:
      /s/ Lammot J.
      DuPont

            

    

     

    
      	
               
      

            	
              Name:
      Lammot J.
      DuPont

            

    

     

    
      	
               
      

            	
              Title:
      Manager

            

    

     

    OWENS
MORTGAGE INVESTMENT FUND, a California limited partnership

     

    
      	
               
      

            	
              By:
      /s/ William C.
      Owens

            

    

    
      	
               
      

            	
              Name:  William C.
      Owens

            

    

    
      	
               
      

            	
              Title:
      President, Owens
      Financial Group, Inc.,

            

    

    
      	
               
      

            	
              General
      Partner

            

    

    

     

    

     

    
      
        
          587048 v8/SD 

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT “A”

     

    INITIAL CAPITAL
CONTRIBUTIONS; INITIAL CAPITAL ACCOUNTS;

     

    AND INITIAL PERCENTAGE
INTERESTS OF MEMBERS

     

    
      	
              Name,
      Address, and Tax ID

              for
      Members

            	
              Initial
      Capital Contributions

              and Initial Capital
Accounts

            	
              Initial
      Percentage

              Interests

            
	
              Owens
      Mortgage Investment Fund

              2221
      Olympic Blvd

              Walnut
      Creek, CA 94595

              TIN:
      ________

               

            	
              $3,175,000.00

            	
              50.000%

            
	
              Nanook
      Ventures LLC

              1212
      New York Ave.,NW, #900]

              Washington
      D.C. 20005

              TIN:
      ________

               

            	
              $3,175,000.00

            	
              50.000%

            
	
              TOTALS

            	
              ___________

              $6,350,000.00

            	
              _______

              100.00%

            

    

    

    

     

    

     

    Manager

     

    NV
Manager, LLC

     

    ________
1212 New York Ave., NW, #900

     

    ________
Washington D.C. 20005

     

    
      
        
          
            	
                    587048 v8/SD
    

                  	
                    A-1

                  	 
      

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    B EXHIBIT “B”

     

    ARTICLE
12                                

     

    

     

    DEFINED
TERMS

     

    The
following terms used in this Agreement have the following meanings (unless
otherwise expressly provided elsewhere in this Agreement):

     

    12.1 “Act”.  means the California
Limited Liability Company Act, as amended from time to time.

     

    12.2 “Adjusted Capital
Account Balance”.  means, with respect to
any Member, the balance, if any, in such Member’s Capital Account as of the end
of the relevant Fiscal Year, after giving effect to the following
adjustments:

     

    (a) Increased
by any amounts which such Member is obligated to restore pursuant to any
provision of this Agreement or is deemed to be obligated to restore pursuant to
the penultimate (second to last) sentence of Treasury
Regulations 1.704-2(g)(1) and 1.704-2(i)(5) (i.e., minimum gain);
and

     

    (b) Decreased
by such Member’s share of the items described in Treasury
Regulations 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

     

    The
foregoing definition of Adjusted Capital Account Balance is intended to comply
with the provisions of Treasury Regulations 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.

     

    12.3 “Affiliate”.  means, with respect to
any Person, any other Person (a) which is an employee, officer, partner,
manager, member, shareholder, director, agent or contractor of such first
Person, (b) in which such first Person directly or indirectly owns greater
than a fifty percent (50%) interest (whether economic or voting), (c) which
directly or indirectly owns a fifty percent (50%) interest (whether economic or
voting) in such first Person, or (d) which, directly or indirectly, is in
control of, is controlled by, or is under control with, such first
Person.  For purposes of this definition of Affiliate, “control” and
“controlled” with respect to any Person means the power, directly or indirectly,
either to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or equity interests,
by contract or otherwise.

     

    12.4 “Agreement”.  means this Operating
Agreement of the Company as originally executed and as amended from time to
time.

     

    12.5 “Arbitration
Notice”.  is defined in
Section 11.3(d).

     

    12.6 “Arbitrator”.  is defined in
Section 11.3(d).

     

    12.7 “Assignee”.  is defined in
Section 8.7.

     

    
      
        B-1

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.8 “Avis
Lease”.  is defined in
Section 1.1(c).

     

    12.9 “Bad
Act”.  means, with respect to
any Person, if any of the following is determined by a court or arbitrator
order, judgment, decree, or decision:  recklessness, fraud, a criminal
act, misapplication of funds derived from the Property, deceit, intentional
misrepresentation, intentional damage or destruction of the Property, or any
part thereof, gross negligence, willful misconduct, or a wrongful taking, or a
material breach of its obligations under this Agreement which breach is not
cured within thirty (30) days of written notice thereof from a
Member.

     

    12.10 “Bankruptcy”.  means, with respect to
any Person, any of the following:

     

    (a) The
filing by such Person of a voluntary petition under any federal or state law for
the relief of debtors.

     

    (b) The
filing against such Person of an involuntary proceeding under any such
law.

     

    (c) The
making of a general assignment for the benefit of such Person’s
creditors.

     

    (d) An
assignment of any Interest by a Member (including any Economic Interest) for the
benefit of creditors.

     

    (e) The
appointment of a receiver, trustee, liquidator or administrator of all or
substantially all property or business of such Person.

     

    (f) The
seizure by a sheriff, receiver, or bankruptcy trustee of a substantial portion
of such Person’s assets.

     

    No
Bankruptcy shall occur in the case of an event described in Section 12.10(b), Section 12.10(e) or Section 12.10(f) until such proceeding, appointment, or seizure
has been pending for at least sixty (60) calendar days.  No filing as
a Chapter 11 or Chapter 13 reorganization (with no change of ownership
or control of the relevant Interest of such Person subject to such filing) shall
be deemed to constitute a Bankruptcy under this Section 12.10 for so long as such filing is maintained as a
Chapter 11 or Chapter 13 reorganization and for so long as there is no
change of ownership or control of the relevant Interest of such
Person.

     

    12.11 “Business
Day”.  means any day other than
a Saturday, Sunday, State of California or national holiday, or other day on
which commercial banks in California are generally not open for
business.

     

    12.12 “Buy/Sell
Amount”.  is defined in
Section 7.8

     

    12.13 “Buy/Sell
Notice”.  is defined in
Section 7.8

     

    12.14 “Buy/Sell
Offeree”.  is defined in
Section 7.8

     

    
      
        B-2

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.15 “Buy/Sell
Offeror”.  is defined in
Section 7.8

     

    12.16 “Buy/Sell
Right”.  is defined in
Section 7.8.

     

    12.17 “Capital
Account”.  means an account which
shall be established and maintained for each Member in accordance with Treasury
Regulations 1.704-1(b)(2)(iv), including the following
requirements.

     

    (a) Each
Member’s Capital Account shall be credited with (i) the amount of the
Member’s Capital Contribution(s), (ii) the Member’s distributive share of
Profits (and any item in the nature of income or gain which is allocated to such
Member, including income and gain exempt from tax), and (iii) the amount of
any Company liabilities assumed by such Member or which are secured by any
Company property distributed to such Member.

     

    (b) Each
Member’s Capital Account shall be debited by (i) the amount of cash and the
Gross Asset Value of any Company property distributed to the Member,
(ii) the amount of any liabilities of such Member assumed by the Company or
which are secured by any property contributed by such Member to the Company, and
(iii) such Member’s distributive share of Losses.

     

    (c) Whenever
the Gross Asset Values of Company property are adjusted pursuant to
Section 12.49, the Capital Accounts of all
Members shall be adjusted in the manner provided in Treasury
Regulations 1.704-1(b)(2)(iv)(f) and (g) to reflect, among other
items, the aggregate net adjustment as if the Company had recognized gain or
loss equal to the amount of the adjustment.

     

    (d) If any
Interest is transferred in accordance with this Agreement, then the Transferee
shall succeed to the Capital Account of the Transferor to the extent it relates
to the transferred Interest.

     

    (e) If
property is distributed to a Member, then, before the Capital Account of such
Member is adjusted as required by this Section 12.17, the Capital Accounts of the Members shall be
adjusted to reflect the manner in which the unrealized income, gain, loss or
deduction inherent in such property (that has not been reflected in such Capital
Accounts previously) would be allocated among the Members as if there were a
taxable disposition of such property for its gross fair market value on the date
of distribution.

     

    The
foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury
Regulations 1.704-1(b) and 1.704-2, and shall be interpreted and
applied in a manner consistent with such Treasury Regulations.  If the
Tax Matters Partner, upon the advice of tax counsel, determines that it is
prudent 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,
then the Tax Matters Partner is hereby authorized to make such modification,
provided that it is not likely to have a material effect on the amounts
distributable to any Member pursuant to Section 9.3 upon the dissolution of the Company.

     

    12.18 “Capital
Contribution”.  means the total amount
of money contributed to the Company, the initial Gross Asset Value of any
property contributed to the Company, and services rendered or to be rendered to
the Company by any Member (or its predecessors).

     

    
      
        B-3

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.19 “Capital
Notice”.  is defined in
Section 3.8(a).

     

    12.20 “Certificate of
Formation”.  means the Certificate of
Formation of the Company, as amended from time to time.

     

    12.21 “Closing”.  is defined in
Section 1.1(a).

     

    12.22 “Code”.  means the Internal
Revenue Code of 1986 as amended from time to time, or corresponding provisions
of subsequent superseding federal revenue laws.

     

    12.23 “Company”.  means 1850 De La Cruz LLC, a
California limited liability company.

     

    12.24 “Company Minimum
Gain”.  means, as provided in
and subject to Treasury Regulations 1.704-2(d), the amount determined as
follows:  first, compute, with respect to each nonrecourse liability
of the Company, the amount of income or gain that would be realized by the
Company if the Company disposed of (in a taxable transaction) the Company
property subject to the nonrecourse liability (and for no other consideration);
and add together the amounts so computed for all nonrecourse liabilities of the
Company; add to this sum the Company’s allocable share of any Company Minimum
Gain of any other Entity treated as a partnership for tax purposes in which the
Company has an interest as provided in Treasury Regulations 1.704-2(k);
this sum is the “Company Minimum Gain.”

     

    12.25 “Contributed
Property”.  is defined in
Section 3.3.

     

    12.26 “Contributing
Members”.  is defined in
Section 3.8(d).  Reference to “Contributing
Member” means any
of the Contributing Members.

     

    12.27 “Deceased Member
or Changed Trustee”.  is defined in
Section 8.1(b).

     

    12.28 “Depreciation”.  means, for each Fiscal
Year or other period, an amount equal to the depreciation, amortization or other
cost recovery deduction allowable with respect to an asset for such year or
other 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 year or
other 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 year or other period bears to such
beginning adjusted tax basis.

     

    12.29 “Disability”.  is defined in
Section 5.3(c)(ii).

     

    12.30 “Dispute”.  is defined in
Section 11.3(a).

     

    12.31 “Dispute
Notice”.  is defined in
Section 11.3(a).

     

    
      
        B-4

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.32 “Dispute
Parties”.  is defined in
Section 11.3(a).  Reference to “Dispute
Party” means any of the Dispute Parties.

     

    12.33 “Dissolution Event”.  is defined in
Section 9.1(a).

     

    12.34 “Distributable
Cash”.  means all cash,
receipts, and funds received by the Company during any Fiscal Year from the
Company’s operations or from any other source of any kind (including without
limitation any Reserves from a previous Fiscal Year that no longer need to be
set aside or allocated to reserves) but excluding Major Capital Event
Proceeds.

     

    12.35 “Economic
Interest”.  means, with respect to a
Member and its Interest, (a) the right to receive allocations of the
Company’s Profits, Losses, or similar items of income, gain, loss, deduction,
credit, or similar items (to which the Transferor would be entitled as to the
Transfer Interest), (b) the right to receive distributions of cash or other
property from the Company, and (c) the right to contribute capital (as
applicable to the Transferee with respect to the Transfer Interest) under Article 3 (and the holder of an Economic Interest shall
be subject to any dilution set forth in this Agreement for a failure to so
contribute capital).  The holder of such Economic Interest shall not
be deemed or considered to be a Member or Substitute Member, and shall not have
the right to vote or consent with respect to any matter under this Agreement or
the Act, to inspect the books of the Company, to participate in management of
the Company, or to exercise any other right of a Member or Substitute
Member.

     

    12.36 “Effective
Date”.  is defined in the
introductory Paragraph of this Agreement.

     

    12.37 “Entity”.  means any general
partnership, limited partnership, limited liability company, corporation, joint
venture, business or statutory trust, cooperative, association, or any other
entity or Person that is not a natural person.

     

    12.38 “Entity
CPA”.  means the certified
public accountant for the Company, as determined by the Tax Matters
Partner.

     

    12.39 “Environmental
Work”.  is defined in
Section 7.7.

     

    12.40 “Environmental
Work Completion Date”.  is defined in
Section 7.8.

     

    12.41 “Escrow
Holder”.  is defined in
Section 3.3(b).

     

    12.42 “Excess Company
Loan”.  is defined in
Section 3.8(d)(i).

     

    12.43 “Excess Member
Loan”.  is defined in
Section 3.8(d)(ii).

     

    12.44 “Excess Member
Loan Payments”. 
is defined in Section 3.8(d)(ii).

     

    
      
        B-5

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.45 “Executive
Order”.  means Executive Order
No. 13224 – Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001,
as amended from time to time.  

     

    12.46 “Fair Market
Value”.  is defined in
Section 8.4(a).

     

    12.47 “Financing”.  means any mortgage
financing, refinancing or borrowing secured by the Property or any portion of
the Property including additions to borrowing initially made to finance the
purchase of the Property, but excluding any loan made by the
Company.

     

    12.48 “Fiscal
Year”.  means the Company’s
fiscal year, which shall be the calendar year.

     

    12.49 “Gross Asset
Value”.  means, with respect to
any asset, the adjusted basis of the asset for federal income tax purposes,
except as follows:

     

    (a) The
initial Gross Asset Value of any asset contributed by a Member to the Company
shall be its gross fair market value, as reasonably determined by the
contributing Member and the Company.

     

    (b) The Gross
Asset Values of all assets of the Company shall be adjusted to equal their
respective gross fair market values, as reasonably determined by the Tax Matters
Partner, as of the following times:

     

    (i) The
acquisition of additional Interests in the Company by any new or existing Member
in exchange for more than a de minimis Capital Contribution;

     

    (ii) The
distribution by the Company to a Member of more than a de minimis amount of
Company property or money in consideration for an Interest if the Tax Matters
Partner reasonably determines that such adjustment is necessary or appropriate
to reflect the relative Economic Interests of the Members .

     

    (iii) Notwithstanding
anything to the contrary in Section 12.49(b)(ii), on the liquidation of the Company within
the meaning of Treasury Regulations 1.704-1(b)(2)(ii)(g).

     

    (iv) The Gross
Asset Value of any asset of the Company distributed to any Member shall be the
gross fair market value of such asset on the date of distribution.

     

    (v) If the
Gross Asset Value of an asset has been determined or adjusted pursuant to
Section 12.49(a) or Section 12.49(b), 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.

     

    12.50 “Interest”.  means the entire
interest of a Member in the Company at any particular time, including the right
of such Member to any and all benefits to which a Member may be entitled as
provided in this Agreement, the right to receive distributions, the right to
vote, and the right to receive information regarding the Company, as provided in
this Agreement and the Act, together with the obligations of such Member to
comply with all of the terms and provisions of this
Agreement.  Reference to “Interests” means, collectively, the
Interest of each and every Member.

     

    
      
        B-6

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.51 “Involuntary
Transfer”. 
is defined in Section 8.1(c).

     

    12.52 “Involuntary
Transferor”.  is defined in
Section 8.4.

     

    12.53 “IRS”.  means the Internal
Revenue Service.

     

    12.54 “JAMS”.  is defined in
Section 11.3(d).

     

    12.55 “Law
Firm”. 
is defined in Section 10.4.

     

    12.56 “Law Firm
Client”.  is defined in
Section 10.4.

     

    12.57 “Losses”.  is defined in
Section 12.78.

     

    12.58 “Major Capital
Event”. 
means (a) the sale, exchange, or other transfer of all or substantially all
of the assets of the Company, (b) the recovery of damage awards,
condemnation awards, and insurance proceeds (other than business or rental
interruption insurance proceeds), or (c) the placement of Financing upon
the assets of the Company.

     

    12.59 “Major Capital
Event Proceeds”.  means the net cash
proceeds received by the Company resulting from a Major Capital Event (including
interest income of the Company in respect of the Major Capital
Event  that is not reinvested in the Property or otherwise retained by
the Company for the continuation of its business, as determined by the Manager,
in its sole and absolute discretion).

     

    12.60 “Manager”.  means the manager
determined pursuant to Article
5.  References to the Managers in the plural, or other like
references shall also, where the context so requires, be deemed to include the
singular or the masculine or feminine reference, as the case may be, and vice
versa.

     

    12.61 “Members”.  means the initial
members of the Company admitted as such pursuant to the terms of this Agreement,
or their permitted successors and assigns, and/or any other Person admitted as a
member or Substitute Member pursuant to the terms of this
Agreement.  References to Member in the singular, or other like
references shall also, where the context so requires, be deemed to include the
plural or the masculine or feminine reference, as the case may be, and vice
versa.

     

    12.62 “Nanook”. 
is defined in the introductory Paragraph of this Agreement.

     

    
      
        B-7

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.63 “Non-Permitted
Transfer on Death or Trustee Change”. 
is defined in Section 8.1(b).

     

    12.64 “Nonrecourse
Debt”.  means a liability of the
Company to the extent that no Member or a Person related to such Member bears
the economic risk of loss for that liability under Treasury
Regulations 1.752-2.

     

    12.65 “Non-Transferring
Member(s)”. 
is defined in Section 8.4.

     

    12.66 “NV
Manager”. 
is defined in the introductory Paragraph of this Agreement.

     

    12.67 “OFAC”.  means the Office of
Foreign Assets Control, United States Department of the Treasury, or any other
office, agency or department that succeeds to the duties of OFAC.

     

    12.68 “Owens”. 
is defined in the introductory Paragraph of this Agreement.

     

    12.69 “Executive
Order”.  means Executive Order
No. 13224 – Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001,
as amended from time to time.  

     

    12.70 “Officer”.  means one or more
Persons designated as such by the Manager pursuant to this Agreement, if
any.

     

    12.71 “Parties”.  means, collectively, the
Manager and the Members.  Reference to a “Party” means any one of the
Parties.

     

    12.72 “Patriot
Act”.  means Title III of
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public
Law 107-56).

     

    12.73 “Patriot Act
Related Laws”.  means those laws,
regulations, orders and sanctions, state and federal, criminal and civil, that
(a) limit the use and/or seek the forfeiture of proceeds from illegal
transactions, (b) limit commercial transactions with designated countries or
individuals believed to be terrorists, narcotic dealers or otherwise engaged in
activities contrary to the interests of the U.S., (c) require identification and
documentation of the parties with whom a financial institution conducts
business, or (d) are designed to disrupt the flow of funds to terrorist
organizations.  For purposes of clarification, Patriot Act Related
Laws shall be deemed to include the Executive Order, the Patriot Act, the Bank
Secrecy Act (31 U.S.C. §§ 5311 et seq.), the International Emergency Economic
Powers Act (50 U.S.C. §§ 1701 et seq.), the Trading with the Enemy Act (50
U.S.C. Appx. 1 et seq.), the Cuban Democracy Act (22 U.S.C.§§ 6001-10), the
Cuban Liberty and Democratic Solidarity (LIBERTAD) Act (22 U.S.C. 6021-91), the
Iraq Sanctions Act of 1990 (Pub. L. 101-513), the Terrorism Sanctions
Regulations (31 C.F.R. Part 595), the Antiterrorism and Effective Death Penalty
Act of 1996 (8 U.S.C. § 1189, 18 U.S.C. § 2332b and 18 U.S.C. § 2332d), the
Terrorism List Governments Sanctions Regulations (31 C.F.R. Part 596), the
Foreign Terrorist Organizations Sanctions Regulations (31 C.F.R. Part 597), the
United Nations Participation Act (22 U.S.C. § 287c), and the International
Security and Development Cooperation Act (22 U.S.C. §§ 2349 aa-9); each as
amended, and the sanctions regulations promulgated pursuant to the foregoing by
the Office of Foreign Assets Control of the U.S. Department of Treasury, as well
as laws relating to prevention and detection of money laundering in Sections
1956 and 1957 of Title 18 of the U.S. Code, as amended.

     

    
      
        B-8

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.74 “Percentage
Interest”.  means, with respect to a
Member the “Percentage Interest” of such Member as set forth opposite the name
of such Member under such column in the relevant portion of attached Exhibit “A”,
which may be adjusted from time to time pursuant to this Agreement.

     

    12.75 “Permitted
Transfer”. 
is defined in Section 8.1(a).

     

    12.76 “Permitted
Transferee”. 
is defined in Section 8.1(a).

     

    12.77 “Person”. 
means an individual, partnership, limited liability company, trust, estate,
association, corporation, pension, profit sharing, or other employee benefit
plan, or other Entity, as well as guardian, trustee, executor, administrator,
committee, trustee in bankruptcy, receiver, assignee for the benefit of
creditors, conservator, or other Person acting in a fiduciary
capacity.

     

    12.78 “Profits” or “Losses”.  means, for each Fiscal
Year or other 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.

     

    (a) Any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits or Losses shall be included as if it
were taxable income.

     

    (b) 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 Treasury
Regulations 1.704-1(b)(2)(iv)(i), shall be taken into account in computing
such taxable income or loss as if they were deductible items.

     

    (c) 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.

     

    (d) In lieu
of the depreciation, amortization, and other cost recovery deductions taken into
account in computing such taxable income or loss, the Company shall compute such
deductions based on the book value of Company property, in accordance with
Treasury Regulations 1.704-1(b)(2)(iv)(g)(3).

     

    
      
        B-8

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) Any items
which are specifically allocated pursuant to a Code Section 754 election, a
recharacterization of a guaranteed payment as a distribution, a qualified income
offset, minimum gain chargeback, nonrecourse deduction special allocation, or a
gross income allocation shall not be taken into account in computing Profits or
Losses.

     

    (f) Notwithstanding
anything to the contrary in this Agreement, Profits and Losses shall be adjusted
as necessary to ensure compliance with Treasury
Regulations 1.704-1(b) or other applicable Treasury
Regulations.

     

    12.79 “Property”.  means the “Property,” as
such term is defined in the Purchase and Sale Agreement and all appurtenances
thereto that may arise or exist after the Effective Date, all of which includes
and is located on or related to that certain land located at 1850 De La
Cruz Boulevard, and 556-558 Reed Street in the City of Santa Clara,
Santa Clara County, California, consisting of approximately
4.64 acres.

     

    12.80 “Purchase and Sale
Agreement”.  is defined in
Section 1.1(a).

     

    12.81 “Purchase
Option”.  is defined in
Section 8.4.

     

    12.82 “Purchase Option
Buyers”.  is defined in
Section 8.4(b).

     

    12.83 “Purchase Option
Notice”.  is defined in
Section 8.4(b).

     

    12.84 “Purchase Option
Price”.  is defined in
Section 8.4(b).

     

    12.85 “Regulatory
Allocations”.  is defined in
Section 13.1(e).

     

    12.86 “Removal
Event”.  is defined in
Section 5.3(c).

     

    12.87 “Required
Amount”.  is defined in
Section 3.8(a).

     

    12.88 “Required
Capital”.  is defined in
Section 3.8(a).

     

    12.89 “Reserves”.  means, with respect to
any Fiscal Year, funds set aside or amounts allocated during such period to
reserves which shall be maintained in amounts deemed sufficient by the Manager
for working capital and to pay taxes, insurance, debt service or other costs or
expenses incident to the ownership or operation of the Company’s
business.

     

    12.90 “ROFO”.  is defined in
Section 8.5.

     

    12.91 “ROFO
Notice”.  is defined in
Section 8.5.

     

    
      
        B-9

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.92 “Safe Harbor
Election”. 
means the safe harbor election described in any final version of proposed
Treasury Regulations 1.83-3(1) or IRS Notice 2005-43,
I.R.B. 2005-24 (May 20, 2005), through which an Entity may elect to
treat an interest transferred to a service provider as having a fair market
value equal to the liquidation value (as that term is defined in IRS
Notice 2005-43) of that interest.

     

    12.93 “Securities
Laws”.  means the Securities Act
of 1933, as amended, the California Corporate Securities Law of 1968, as
amended, and/or any California or other applicable blue sky or securities
laws.

     

    12.94 “Shortfall
Amount”. 
is defined in Section 3.8(c).

     

    12.95 “Shortfall Capital
Contributions”.  is
defined in Section 3.8(d).

     

    12.96 “Shortfall Makeup
Rights”. 
is defined in Section 3.8(d).

     

    12.97 “Shortfall
Member”.  is defined in
Section 3.8(c).

     

    12.98 “Shortfall
Notice”.  is defined in
Section 3.8(c).

     

    12.99 “Substitute
Member”.  is defined in
Section 8.7.

     

    12.100 “Target Final
Balances”.  is defined in
Section 9.6.

     

    12.101 “Tax Matters
Partner”.  is defined in
Section 6.1.

     

    12.102 “Third Party
Price”.  is defined in
Section 8.6.

     

    12.103 “Transfer”.  is defined in
Section 8.1.

     

    12.104 “Transfer
Interest”.  is defined in
Section 8.6.

     

    12.105 “Transfer
Notice”.  is defined in
Section 8.6.

     

    12.106 “Transferee”.  is defined in
Section 8.6.

     

    12.107 “Transferor”.  is defined in
Section 8.6.

     

    12.108 “Treasury
Regulations”.  means the Income Tax
Regulations, including temporary regulations, promulgated under the Code, as
amended from time to time.

     

    12.109 “Unrecovered
Capital Contributions”.  means, with respect to
each Member, the amount of Capital Contributions made by such Member, adjusted
as follows:

     

    
      
        B-10

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a) Reduced
by the amount of cash and the Gross Asset Value of any property distributed to
such Member pursuant to any of the following
provisions:  Section 4.1(a)(iii),
Section 4.1(b)(iii), and Section 4.1(b)(iv) (including without limitation under
Section 4.1(b)(iii), and Section 4.1(b)(iv) by virtue of the provisions of
Section 9.3(a)(iii)).

     

    (b) Reduced
by the amount of any liabilities of such Member assumed by the Company or which
are secured by any property contributed by such Member to the
Company.

     

    (c) Increased
by the amount of any Company liabilities which, in connection with any
distributions by the Company to such Member, are assumed by such Member or are
secured by any Company property distributed to such Member.

     

    If any
Member (or Assignee) Transfers all or any portion of its Interest (or Economic
Interest) in accordance with the terms of this Agreement, its Transferee shall
succeed to the Unrecovered Capital Contributions of the Transferor to the extent
it relates to the Transfer Interest.

     

    12.110 “Voluntary
Transfer”. 
is defined in Section 8.1(d).

     

    12.111 “Voting
Majority”.  means Members entitled
to vote holding collectively fifty percent (50%) or more of the total Percentage
Interests of all Members entitled to vote (as set forth in Section 7.5(b)).

     

    12.112 “Withholding Tax
Deficiency”. 
is defined in Section 13.9(c).

     

    

    
      
        
          
            	
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    C           EXHIBIT “C”

     

    ARTICLE
13                                

     

    

     

    ADDITIONAL
TAX PROVISIONS

     

    13.1 Special Tax
Provisions.  Prior to making any allocations under
Section 4.2, the following allocations shall
be made:

     

    (a) Except as
otherwise provided in Section 13.1(b) and
Section 13.1(c), if any Member unexpectedly
receives any adjustments, allocations or distributions described in Treasury
Regulations 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income
and gain shall be specially allocated to such Member in proportion to such
Member’s respective negative balance in its Adjusted Capital Account Balance in
an amount and manner sufficient to eliminate, to the extent required by the
Treasury Regulations, the negative balance in its Adjusted Capital Account
Balance as quickly as possible.  It is intended that this
Section 13.1(a) qualify and be construed as a
“qualified income offset” within the meaning of Treasury
Regulations 1.704(b)(2)(ii)(d)(3) and shall be interpreted consistently
with such Treasury Regulations.

     

    (b) Nonrecourse
Deductions (as defined in Treasury Regulations 1.704-2(b)(1)) for each
Fiscal Year, or portion thereof, shall be allocated among the Members pro rata
in proportion to their respective Percentage Interests.  Except as
provided in Section 13.1(c), if there is a net
decrease in Company Minimum Gain for a Fiscal Year, each Member shall be
specially allocated, before any other allocation of Company items for such
Fiscal Year, items of gross income and gain for such year (and, if necessary,
for subsequent years) in proportion to, and to the extent of, the amount of such
Member’s share of the net decrease in Company Minimum Gain during such year,
determined in accordance with Treasury Regulations 1.704-2(f) and
1.704-2(i).  The income allocated pursuant to this Section 13.1(b) in any Fiscal Year shall consist first of gains
recognized from the disposition of property subject to one or more Nonrecourse
Debts, and any remainder shall consist of a pro rata portion (in proportion
to their respective Percentage Interests) of other items of income or gain of
the Company.  This Section 13.1(b)
shall be applied separately with respect to Company Minimum Gain attributable to
Nonrecourse Debt and other Company Minimum Gain.  The items to be so
allocated shall be determined in accordance with Treasury
Regulations 1.704-2(f), 1.704-2(a), 1.704-2(i) and
1.704-2(j)(2)(ii).

     

    (c) The
allocation of gain or gross income otherwise required pursuant to
Section 13.1(b) shall not apply to a Member to
the extent that (i) such Member’s share of the net decrease in Company
Minimum Gain is caused by a guarantee, refinancing or other change in the debt
instrument which causes the Company nonrecourse debt to become a partially or
wholly recourse debt or a Nonrecourse Debt, and such Member bears the economic
risk of loss (within the meaning of Treasury Regulations 1.752-2) for such
changed debt, (ii) such Member’s share of the net decrease in Company
Minimum Gain results from the repayment of a nonrecourse liability of the
Company, which repayment is made using funds contributed by such Member to the
capital of the Company, (iii) the IRS waives the requirement of such
allocation in response to a request for such waiver made by the Tax Matters
Partner on behalf of the Company (which request the Tax Matters Partner may or
may not make in the Tax Matters Partner’s sole and absolute discretion if the
Tax Matters Partner determines that the Company would be eligible therefor), or
(iv) additional exceptions to the requirement of such allocation are
established by revenue rulings issued by the IRS pursuant to Treasury
Regulations 1.704-2(f)(5), which exceptions apply to such Member, as
determined by the Tax Matters Partner in its sole and absolute
discretion.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) Notwithstanding
anything to the contrary in this Agreement, to (i) the extent Losses
otherwise allocable to a Member pursuant to Section 4.2 would cause such Member to have a deficit in such
Member’s Adjusted Capital Account Balance at the end of any Fiscal Year, such
Losses shall not be allocated to such Member and instead shall be allocated to
the other Members in proportion to their respective Percentage Interests (to the
extent the other Members are not limited in respect of the allocation of Losses)
and thereafter to all Members in proportion to their respective Percentage
Interests, and (ii) after taking into account all allocations pursuant to
Section 4.2, if any Member has a deficit in
its Adjusted Capital Account Balance at the end of any Fiscal Year, each such
Member shall be specially allocated items of income and gain in the amount of
such excess as quickly as possible.

     

    (e) The
allocations set forth in this Section 13.1 (the
“Regulatory
Allocations”) are intended to comply with the minimum gain chargeback
requirement in the Treasury Regulations and with certain requirements of
Treasury Regulations 1.704-1(b), and shall be interpreted consistently with
such Treasury Regulations.  Notwithstanding anything to the contrary
in this Agreement (other than the Regulatory Allocations), the Regulatory
Allocations shall be taken into account in allocating other Profits, Losses and
items of income, gains, loss and deduction among the Members so that, to the
extent possible, the net amount of such allocations of other Profits, Losses and
other items and the Regulatory Allocations to each Member shall be equal to the
net amount that would have been allocated to each such Member if the Regulatory
Allocations had not occurred.

     

    13.2 Partner Nonrecourse
Debt.  Any item of Company loss, deduction or expenditures
described in Code Section 705(a)(2)(B) that is attributable to Member
Nonrecourse Debt shall be allocated to those Members that bear the economic risk
of loss for such Member Nonrecourse Debt, and among such Members in accordance
with the ratios in which they share such economic risk determined in accordance
with Treasury Regulations 1.704-2(i).

     

    13.3 Excess Nonrecourse
Liabilities.  Any “excess nonrecourse liabilities” of the
Company (within the meaning of Treasury Regulations 1.752-3(a)(3)) shall be
allocated among the Members in proportion to their Percentage
Interests.

     

    13.4 Tax Allocations—Interest in the
Company; Assignee Provisions.  Notwithstanding anything to the
contrary in this Agreement, it is the intent of the Company that the allocations
contained in this Article 13 shall be deemed to be
in accordance with the Member’s respective “interests in the Company” within the
meaning of Section 704(b) of the Code and Treasury
Regulations 1.704-1(b).  If the Code or any Treasury Regulations
requires allocations of items of income, gain, loss, deduction or credit
different from those set forth in this Agreement, then the Tax Matters Partner
is hereby authorized to make new allocations in reliance upon the Code, the
Treasury Regulations and/or advice of tax counsel (including without limitation
to Assignees with respect to their Economic Interests; and, in furtherance
thereof, all references to Members in this article
13 and any other tax provision of this Agreement shall, to the extent
necessary to comply with the Code and Treasury Regulations, be deemed to include
Assignees).  Such new allocations shall be deemed to be made pursuant
to the fiduciary obligation of the Tax Matters Partner to the Company and the
Members, and no such new allocation shall give rise to any claim or cause of
action by any Member or Assignee, whether or not the Tax Matters Partner
benefits from such reallocation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.5 Change In
Interest.  If a Transfer of an Interest occurs during any
accounting period or if a Member’s Percentage Interest increases or decreases,
then Profits, Losses, each item of Profits and Losses, and all similar items
attributed to such Interest for such period shall be divided and allocated
between the Transferor and the Transferee by taking into account their varying
interests during the period in accordance with Code Section 706(d), using
any conventions permitted by law and selected by the Tax Matters
Partner.  All distributions on or before the date of such Transfer
shall be made to the Transferor, and all distributions thereafter shall be made
to the Transferee.  Solely for purposes of making such allocations and
distributions, the Company shall recognize such Transfer not later than the end
of the calendar month during which it is given notice of such Transfer, provided
that if the Company does not receive a notice stating the date such Interest was
transferred and such other information as the Tax Matters Partner may reasonably
require within thirty (30) calendar days after the end of the accounting period
during which the Transfer occurs, then all of such items shall be allocated, and
all distributions shall be made, to the Person who, according to the books and
records of the Company, on the last day of the accounting period during which
the Transfer occurs, was the owner of the Interest.  The Tax Matters
Partner and the Company shall incur no liability for making allocations and
distributions in accordance with the provisions of this Section 13.5.

     

    13.6 Recapture.  Notwithstanding
anything to the contrary in this Article 13
allocating Profits and Losses:

     

    (a) To the
extent permitted by applicable income tax law, all Profits treated as ordinary
income or Section 1231, 1245 or 1250 gain, attributable to the recapture of
depreciation or cost recovery deductions shall be allocated among the Members in
the same ratio as prior allocations to such Members of the depreciation or cost
recovery deductions subject to recapture taking into account any basis
adjustments made to the Company’s assets under Code
Section 754.

     

    (b) To the
extent permitted by applicable income tax law, all tax credits that are
recaptured shall be allocated among the Members in the same ratio as prior
allocations to such Members of the tax credit subject to recapture.

     

    (c) To the
extent permitted by applicable income tax law, all income allocated pursuant to
Section 13.6(a) and Section 13.6(b) shall have the same character under the passive
loss rules as the deductions giving rise to such allocations.

     

    13.7 Code Section 704(c); Mandatory
Tax Allocations.  Notwithstanding anything to the contrary in
this Agreement, if Code Section 704(c) or Code Section 704(c)
principles applicable under Treasury Regulations 1.704-1(b)(2)(iv) require
allocations of income or loss of the Company for tax purposes, in a manner
different than that set forth above, the provisions of Code Section 704(c)
and the Treasury Regulations thereunder shall control such allocations among the
Members.  If the Gross Asset Value of any Company property is
adjusted, then subsequent allocations of income, gain, loss, and deduction with
respect to such assets 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 required under Code Section 704(c) and the Treasury
Regulations thereunder and in accordance with Treasury
Regulations 1.704-1(b)(2)(iv)(f)(4) and (b)(4)(i).  All elections
under such provisions and Treasury Regulations shall be made by the Tax Matters
Partner.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.8 Capital Account
Adjustments.  Upon an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Section 734(b) or Code
Section 743(b), the Capital Accounts of the Members shall be adjusted, if
adjustment is required, pursuant to Treasury
Regulations 1.704-1(b)(2)(iv)(m).

     

    13.9 Company Withholding
Obligations.

     

    (a) The
Company shall comply with all applicable federal, state, local, or foreign
withholding tax obligations, as the same may change from time to time under
applicable law.  These withholding requirements are complex, and by
his, her or its execution of this Agreement, each Member acknowledges and agrees
that if it is or ever becomes a nonresident alien (in accordance with Code
Section 7701(b)), a nonresident of any state (e.g., California, pursuant to
California Revenue & Taxation Code Sections 17014 and 17015 and related
provisions of the California Revenue and Taxation Code and regulations
promulgated under such Sections), and/or a foreign corporation, foreign
partnership, foreign trust or foreign estate (in accordance with Code Sections
7701(a)(5) and 7701(a)(31), or any other applicable federal or state law) such
Member shall immediately notify the Tax Matters Partner in writing of that
change of status.

     

    (b) In all
cases, the Company shall withhold and pay over to the appropriate taxing agency
the amount required under applicable law as determined by the Tax Matters
Partner in its sole and absolute discretion.  As of the Effective
Date, such withholding obligations (if so required) would be imposed quarterly
on the Member’s allocable share of Profits (whether or not cash is distributed),
at the highest federal marginal tax rate (currently 35 percent (35%)) for
income "effectively connected with a U.S. trade or business," as such term
is defined in the Code; and at the current rate of any applicable state (e.g.,
the California withholding is currently seven percent (7%), eight and
eighty-four hundredths percent (8.84%), or nine and three-tenths percent (9.3%),
as applicable, for California-source income).

     

    (c) To the
extent the Company fails to comply with any such withholding obligations under
this Section 13.9 as a result of a Member’s
false certification or failure to affirmatively notify the Tax Matters Partner
of such Member’s status, all taxes, penalties, and interest (and all related
attorneys’ fees and costs), together with interest on the entire sum at the rate
of ten percent (10%) per annum calculated on a cumulative (but not compounded)
basis, but no more than the maximum rate allowed by law (collectively, a "Withholding Tax
Deficiency") shall be borne by and paid by such Member.  Such
Member shall indemnify the Company with respect to the Withholding Tax
Deficiency.  To the extent any Withholding Tax Deficiency exists with
respect to a Member (or has a reasonable probability of existing in the
reasonable judgment of the Tax Matters Partner), the Tax Matters Partner shall,
in addition to exercising all of the Company’s other remedies at law or in
equity, apply all amounts otherwise distributable to such Member to pay any
Withholding Tax Deficiency, until such Withholding Tax Deficiency is paid in
full and such Member shall receive no distributions unless and until the
Withholding Tax Deficiency is paid in full.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) Except as
otherwise provided in this Section 13.9, any
amount so withheld by the Company with respect to a Member shall be treated for
purposes of this Agreement as an amount actually distributed to such Member
pursuant to Section 4.1.  An amount
shall be considered withheld by the Company if and at the time such amount is
remitted to a governmental agency without regard to whether such remittance
occurs at the same time as the distribution or allocation to which it relates;
provided, however, that an amount withheld from a specific distribution or
designated by the Tax Matters Partner as withheld with respect to a specific
allocation shall be treated as distributed at the time such distribution or
allocation occurs.

     

    (e) In the
event that the Tax Matters Partner determines in its reasonable discretion that
the Company lacks sufficient cash available to pay withholding taxes in respect
of a Member, the Tax Matters Partner may, in its sole and absolute discretion,
(i) make a loan or Capital Contribution to the Company to enable the
Company to pay such taxes or (ii) require that an amount equal to such
taxes with respect to a Member be paid promptly to the Company by such
Member.  Any such loan shall be full-recourse to the Company and shall
bear interest at the rate of ten percent (10%) per annum calculated on a
cumulative (but not compounded) basis, but no more than the maximum rate allowed
by law.  Notwithstanding anything to the contrary in this Agreement,
any loan (including interest accrued thereon) or Capital Contribution made to
the Company by the Tax Matters Partner pursuant to this Section 13.9(e) shall be repaid or returned as promptly as is
reasonably possible.  Interest expense on any such advance as it
relates to a withholding tax on a Member shall be borne by and specially
allocated to such Member.  Future distributions otherwise to be made
to a Member pursuant to Section 4.1 shall be
reduced by the amount repaid to the Tax Matters Partner in respect of a loan or
Capital Contribution made with respect to withholding taxes in respect of such
Member.

     

    (f) Taxes
withheld by third parties from payments to the Company shall be treated as if
withheld by the Company for purposes of this Section 13.9.  Such withholding shall be deemed to
have been made in respect of each Member to which such withholding is directly
attributable, as determined by the Tax Matters Partner, in proportion to their
respective allocative shares under Section 4.2
of the underlying items of Profit to which such third party payments are
attributable (calculated as though the aggregate allocable share of such Member
was 100% (one hundred percent)).  In the event that the Company
receives a refund of taxes previously withheld by a third party from one or more
payments to the Company, the economic benefit of such refund shall be
apportioned to each Member to which such refund is directly attributable in a
manner reasonably determined by the Tax Matters Partner to offset the prior
operation of this Section 13.9(f) in respect
of such withheld taxes.

     

    13.10 Allocation Provisions
Binding.  The Members are aware of the income tax consequences
of the allocations made by Article 4 and this Article 13 and hereby agree to be bound by the
provisions of Article 4 and this Article 13 in reporting their shares of Company income
and loss for income tax purposes so long as all such allocations are made in
accordance with applicable law and regulations.

     

    

    
      
        
          
            	
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    EXHIBIT “D”

     

    Assignment

     

    The
undersigned member of 1850 De
La Cruz LLC, a California limited liability company (the “Company”),
hereby transfers and assigns to ________________________________ (“Assignee”)
(1) all right, title, and interest of the undersigned in and to the Company
and under the Operating Agreement (the “Agreement”)
of the Company (the “Transfer
Interest”),
and (2) all of the undersigned’s obligations relating to the Transfer
Interest and the Agreement.  It is the intent of the undersigned that
the Assignee shall succeed to the Transfer Interest as a “Substitute Member”
under the Agreement.  This Assignment shall be effective as of
___________________, 200__.

     

    ______________________________

     

    [Transferor]

     

    Acceptance
of Assignment and

     

    Agreement
To Be Bound

     

    The
undersigned acknowledges having received and read a copy of that certain
Operating Agreement (the “Agreement”)
of 1850 De La Cruz LLC,
a California limited liability company (the “Company”).  The
undersigned hereby (a) accepts the foregoing Assignment, (b) agrees to
hold such Transfer Interest as a Substitute Member, and (c) agrees to, and
agrees to be bound by, all of the terms and conditions of the Agreement,
including without limitation the provisions of Article
10 of the Agreement.  This Acceptance of Assignment and Agreement
to be Bound shall be effective as of ___________________, 200__.

     

    ______________________________

     

    [Assignee]

     

    Consent
to Assignment

     

    The
undersigned Manager of 1850 De
La Cruz LLC, a California limited liability company, hereby consents to
the foregoing Assignment and the foregoing Acceptance of Assignment and
Agreement to be Bound, effective as of ___________________, 200__.

     

    ______________________________

    [Manager]

    

    
      
        
          
            	
                    587048 v8/SD
    

                  	
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    INDEX OF DEFINED
TERMS

    

    

    

     

    A

     

    Act,
B-1

    Adjusted
Capital Account Balance, B-1

    Affiliate,
B-1

    Agreement,
1, B-1

    Arbitration
Notice, 37, B-1

    Arbitrator,
37, B-1

    Assignee,
26, B-1

    Avis
Lease, 1, B-2

     

    B

     

    Bad Act,
B-2

    Bankruptcy,
B-2

    Business
Day, B-2

    Buy/Sell
Amount, 20, B-2

    Buy/Sell
Notice, 20, B-2

    Buy/Sell
Offeree, 20, B-2

    Buy/Sell
Offeror, 20, B-2

    Buy/Sell
Right, 19, B-3

     

    C

     

    Capital
Account, B-3

    Capital
Contribution, B-3

    Capital
Notice, 4, B-4

    Certificate
of Formation, B-4

    Closing,
1, B-4

    Code,
B-4

    Company,
B-4

    Company
Minimum Gain, B-4

    Contributed
Property, 3, B-4

    Contributing
Members, 5, B-4

     

    D

     

    Deceased
Member or Changed Trustee, 22, B-4

    Depreciation,
B-4

    Disability,
10, B-4

    Dispute,
37, B-4

    Dispute Notice, 37,
B-4

    Dispute
Parties, 37, B-4

    Dissolution
Event, 28, B-4

    Distributable
Cash, B-5

     

    E

     

    Economic
Interest, B-5

    Effective
Date, 1, B-5

    Entity,
B-5

    Entity
CPA, B-5

    Environmental
Work, 19, B-5

    Environmental
Work Completion Date, 20, B-5

    Escrow
Holder, 3, B-5

    Excess
Company Loan, 5, B-5

    Excess
Member Loan, 6, B-5

    Excess
Member Loan Payments, 6, B-5

    Executive
Order, B-5, B-8

     

    F

     

    Fair
Market Value, 23, B-5

    Financing,
B-5

    Fiscal
Year, B-6

     

    G

     

    Gross
Asset Value, B-6

     

    I

     

    Interest,
B-6

    Involuntary
Transfer, 22, B-6

    Involuntary
Transferor, 23, B-6

    IRS,
B-6

     

    J

     

    JAMS, 38,
B-6

     

    L

     

    Law Firm,
35, B-7

    Law Firm
Client, 35, B-7

    Losses,
B-7, B-9

     

    M

     

    Major
Capital Event, B-7

    Major
Capital Event Proceeds, B-7

    Manager,
B-7

    Members,
B-7

     

    N

     

    Nanook,
1, B-7

    Non-Permitted
Transfer on Death or Trustee Change, 22, B-7

    Nonrecourse
Debt, B-7

    Non-Transferring
Member(s), 23, B-7

    NV
Manager, 1, B-7

     

    O

     

    OFAC,
B-7

    Officer,
B-8

    Owens, 1,
B-7

     

    
      
        page
i

      

      
        
        

        
          

        

      

      
        
        

      

    

    P

     

    Parties,
B-8

    Party,
B-8

    Patriot
Act, B-8

    Patriot
Act Related Laws, B-8

    Percentage
Interest, B-8

    Permitted
Transfer, 22, B-8

    Permitted
Transferee, 22, B-8

    Person,
B-8

    Profits,
B-9

    Property,
B-9

    Purchase
and Sale Agreement, 1, B-9

    Purchase
Option, 23, B-9

    Purchase
Option Buyers, 24, B-9

    Purchase
Option Notice, 24, B-10

    Purchase
Option Price, 24, B-10

     

    R

     

    Regulatory
Allocations, B-10, C-2

    Removal
Event, 10, B-10

    Required
Amount, 4, B-10

    Required
Capital, 4, B-10

    Reserves,
B-10

    ROFO, 25,
B-10

    ROFO
Notice, 25, B-10

     

    S

     

    Safe
Harbor Election, B-10

    Securities
Laws, B-10

    Shortfall
Amount, 5, B-10

    Shortfall
Capital Contributions, 6, B-10

    Shortfall
Makeup Rights, 5, B-10

    Shortfall
Member, 5, B-10

    Shortfall
Notice, 5, B-10

    Substitute
Member, 27, B-10

     

    T

     

    Target
Final Balances, 30, B-10

    Tax
Matters Partner, 14, B-10

    Third
Party Price, 26, B-10

    Transfer,
21, B-11

    Transfer
Interest, 26, B-11

    Transfer
Notice, 26, B-11

    Transferee,
26, B-11

    Transferor,
26, B-11

    Treasury
Regulations, B-11

     

    U

     

    Unrecovered
Capital Contributions, B-11

     

    V

     

    Voluntary
Transfer, 23, B-11

    Voting
Majority, B-11

     

    W

     

    Withholding
Tax Deficiency, B-11, C-4

    

    

    

     

    
      
        
          
            	
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      page iiexhibit10-2.htm

    
      
         

      

      
         

        
          

        

      

      
         

        
          Exhibit
10.2

        

      

    

    
      

       

      

    

    PURCHASE
AND SALE AGREEMENT

     

    AND
ESCROW INSTRUCTIONS

     

    BY
AND BETWEEN

     

    SELLER:

     

    OWENS
MORTGAGE INVESTMENT FUND,

    

    AND

    

    BUYER:

     

    DuPONT
FABROS DEVELOPMENT LLC,

    a
Delaware limited liability company

     

    DATED
AS OF:

     

    July
24, 2007

     

    
      

       

      

    

    

    
      
        
          
            	
                    
                    

                    328840
      v3/RE

                  	 
      	 
      

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS

     

    Buyer and
Seller hereby enter into this Purchase and Sale Agreement and Escrow
Instructions (“Agreement”) as of the
Effective Date.  In consideration of the mutual covenants set forth
herein, Seller agrees to sell, assign and transfer the Property to Buyer, and
Buyer agrees to buy the Property from Seller, on the terms and conditions set
forth in this Agreement.

     

    1. DEFINED
TERMS.  The terms listed below shall have the following
meanings throughout this Agreement:

     

    
      	
              Approvals:

            	
              All
      material permits, licenses, franchises, certifications, authorizations,
      approvals and permits issued by any governmental or quasi-governmental
      authorities for the ownership, operation, use and occupancy of the
      Property or any part thereof.

            

    

     

    
      	
              Buyer:

            	
              DuPont
      Fabros Development LLC, a Delaware limited liability
    company

            

    

     

    
      	
              Buyer’s
      Address:

            	
              1212
      New York Avenue, N.W.

            

    

    
      	
               
      

            	
              Suite
      900

            

    

    
      	
               
      

            	
              Washington,
      D.C.  20005

            

    

    
      	
               
      

            	
              Attention:    Hossein
      Fateh

            

    

    
      	
               
      

            	
              Telephone:  (202)
      728-0010

            

    

    
      	
               
      

            	
              Facsimile:    (202)
      728-0220

            

    

    

    
      	
              Buyer's
      Broker:

            	
              CPS
      CORFAC International

            

    

     

    
      	
              Closing:

            	
              The
      consummation of the sale and purchase of the Property, as evidenced by the
      recordation of the Deed (as hereinafter
  defined).

            

    

     

    
      	
              Closing
      Date:

            	
              October
      26, 2007 (approximately sixty (60) days after expiration of Contingency
      Period).

            

    

     

    
      	
              Contingency
      Period:

            	
              Thirty
      (30) days after the receipt of all Due Diligence Documents listed on
      Exhibit B (which may be partially satisfied by a Seller-certified list of
      those items on Exhibit B that either do not exist or are not within
      Seller’s possession and/or
control).

            

    

     

    
      	
              Deposit:

            	
              Three
      Hundred Thousand Dollars ($300,000) comprised of an initial deposit (the
      “Initial
      Deposit”) of One Hundred Thousand Dollars ($100,000) and an
      additional deposit (the “Additional
      Deposit”) of Two Hundred Thousand Dollars
    ($200,000).

            

    

     

    
      	
              Effective
      Date:

            	
              July
      24, 2007.

            

    

     

    
      
        S-1

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Escrow
      Holder:

            	
              LandAmerica
      Commercial Services

            

    

     

    Escrow Holder’s
Address:                                                                           LandAmerica
Commercial Services

    777 Arnold Drive, 1st
Floor

    Martinez, CA 94553

    925-335-3366 (direct)

    925-335-9753 FAX

    Attention:  Robert
Bonus

    Email Address:
RBonus@Landam.com

    

     

    
      	
              Exhibits:

            	
              Exhibit
      A - Legal Description of the Land

            

    

     

    
      	
               
      

            	
              Exhibit
      B – Due Diligence Documents

            

    

     

    
      	
               
      

            	
              Exhibit
      C - Tenant Estoppel

            

    

     

    
      	
               
      

            	
              Exhibit
      D - Grant Deed

            

    

     

    
      	
               
      

            	
              Exhibit
      E - Bill of Sale

            

    

     

    
      	
               
      

            	
              Exhibit
      F - Assignment of Leases

            

    

     

    
      	
               
      

            	
              Exhibit
      G - Assignment of Contracts

            

    

     

    
      	
               
      

            	
              Exhibit
      H - Seller’s Closing Certificate

            

    

     

    
      	
               
      

            	
              Exhibit
      I - FIRPTA Affidavit

            

    

     

    
      	
              Existing
      Contracts:

            	
              All
      written brokerage (other than the brokerage agreement regarding the sale
      of the Property to Buyer), service, maintenance, operating, repair,
      supply, purchase, consulting, professional service, advertising and other
      contracts to which Seller, its agents, representatives, employees or
      predecessors-in-interest is a party, relating to the operation or
      management of the Property (excluding insurance contracts and any recorded
      documents evidencing the Permitted Exceptions) and which are currently in
      force and effect.

            

    

     

    
      	
              Improvements:

            	
              All
      buildings and other improvements owned by Seller located on or affixed to
      the Land, including, without limitation, the existing buildings containing
      approximately 7,000 square feet of rentable space (collectively, the
      “Building”) and
      the existing parking lots, together with all mechanical systems, if any
      existing on the Property (including without limitation, all heating, air
      conditioning and ventilating systems and overhead doors), fixtures,
      facilities, equipment, conduits, motors, appliances, boiler pressure
      systems and equipment, air compressors, air lines, gas-fixed unit heaters,
      baseboard heating systems, water heaters and water coolers, plumbing
      fixtures, lighting systems (including all fluorescent and mercury vapor
      fixtures), transformers, switches, furnaces, bus ducts, controls, risers,
      facilities, installations and sprinkling systems to provide fire
      protection, security, heat, air conditioning, ventilation, exhaust,
      electrical power, light, telephone, storm drainage, gas, plumbing,
      refrigeration, sewer and water thereto, all cable television fixtures and
      antenna, elevators, escalators, incinerators, disposals, rest room
      fixtures and other fixtures, equipment, motors and machinery located in or
      upon the Building, and other improvements now or hereafter on the
      Land.

            

    

     

    
      
        S-2

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Intangible
      Property:

            	
              All
      intangible property now or on the Closing Date owned by Seller in
      connection with the Real Property or the Personal Property including
      without limitation all of Seller’s right, title and interest in and to all
      environmental reports, soil reports, utility arrangements, warranties,
      guarantees, indemnities, claims, licenses, applications, permits,
      governmental approvals, plans, drawings, specifications, surveys, maps,
      engineering reports and other technical descriptions, books and records,
      licenses, authorizations, applications, permits and all other Approvals,
      insurance proceeds and condemnation awards, Seller’s right, title and
      interest in all Approved Contracts relating to the Real Property or the
      Personal Property, or any part thereof (but not Seller’s obligations under
      any Rejected Contracts (as hereinafter defined)), and all other intangible
      rights used in connection with or relating to the Real Property or the
      Personal Property or any part thereof, but excluding such items used
      solely for the conduct of Seller’s business, such as (but not limited to)
      trademarks, trade names and
copyrights.

            

    

     

    
      	
              Land:

            	
              That
      certain land located at 1850 De La Cruz Boulevard, and 556-558 Reed Street
      in the City of Santa Clara, Santa Clara County, California, consisting of
      approximately 4.64 acres, more particularly described in Exhibit A
      hereto, together with all rights and interests appurtenant thereto,
      including, without limitation, any water and mineral rights, development
      rights, air rights, easements and all rights of Seller in and to any
      alleys, passages or other
rights-of-way.

            

    

     

    
      	
              Leases:

            	
              The
      leases of space in the Property in effect on the date hereof, together
      with any leases of space in the Property entered into after the date
      hereof in accordance with the terms of this Agreement, together with all
      amendments and guaranties thereof.

            

    

     

    
      	
              Permitted
      Exceptions:

            	
              shall
      mean and include all of the following:  applicable zoning and
      building ordinances and land use regulations, the lien of taxes and
      assessments not yet delinquent (it being agreed by Buyer and Seller that
      if any tax or assessment is levied or assessed with respect to the
      Property after the date hereof and the owner of the Property has the
      election to pay such tax or assessment either immediately or under a
      payment plan with interest, Seller may elect to pay under a payment plan,
      which election shall be binding on Buyer), any exceptions caused by Buyer,
      its agents, representatives or employees, the rights of the Tenants under
      the Leases, and any matters deemed to constitute Permitted Exceptions
      under Section 5(D) hereof.

            

    

     

    
      
        S-3

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Personal
      Property:

            	
              Any
      and all personal property owned by Seller and used in conjunction with the
      operation, maintenance, ownership and/or occupancy of, and located on, the
      Real Property.

            

    

     

    
      	
              Property:

            	
              The
      Real Property, the Personal Property, the Approved Contracts (as defined
      in Section
      4), the Leases and the Intangible
  Property.

            

    

     

    
      	
              Purchase
      Price:

            	
              Six
      Million Three Hundred Fifty Thousand Dollars
  ($6,350,000)

            

    

     

    
      	
              Real
      Property:

            	
              The
      Land and the Improvements.

            

    

     

    
      	
              Rent
      Roll:

            	
              The
      rent roll delivered to Buyer by Seller pursuant to the terms of this
      Agreement.

            

    

     

    
      	
              Seller:

            	
              Owens
      Mortgage Investment Fund

            

    

     

    
      	
              Seller’s
      Address:

            	
              c/o
      Owen Financial

            

    

    
      	
               
      

            	
              2221
      Olympic Boulevard

            

    

    
      	
               
      

            	
              P.O.
      Box 2400

            

    

    
      	
               
      

            	
              Walnut
      Creek, CA  94505

            

    

    
      	
               
      

            	
              Attention:  Mr.
      Bob Bridge

            

    

    
      	
               
      

            	
              Telephone:  (916)
      683-1962

            

    

    
      	
               
      

            	
              Facsimile:   (916)
      683-3103

            

    

    

    
      	
              Seller's
      Broker:

            	
              None.

            

    

     

    
      	
              Title
      Company:

            	
              Commercial
      Title Group, Inc.

            

    

    
      	
               
      

            	
              8605
      Westwood Center Drive

            

    

    
      	
               
      

            	
              Vienna,
      Virginia  22182

            

    

    
      	
               
      

            	
              Attention:  Barbara
      Blitz

            

    

    
      	
               
      

            	
              Telephone:
      (703) 610-6392

            

    

     

    
      	
               
      

            	
              Facsimile:  (703)
      610-6382

            

    

     

    
      	
               
      

            	
              In
      conjunction with:

            

    

     

    
      
        S-4

      

      
        
        

        
          

        

      

      
        
        

      

    

    LandAmerica Commercial
Services

    777 Arnold Drive, 1st
Floor

    Martinez, CA 94553

    925-335-3366 (direct)

    925-335-9753 FAX

    Attention:  Robert
Bonus

    Email Address:
RBonus@Landam.com

    

     

    
      	
               
      

            	
              Order
      No. SLC
      07-010802

            

    

     

    
      	
              Working
      Day:

            	
              Any
      day that is not a Saturday or Sunday or a holiday in the state in which
      the Real Property is located.

            

    

     

    2. DEPOSIT
AND PAYMENT OF PURCHASE PRICE.  Within one (1) Working Day
after the Effective Date, Buyer shall deposit with Escrow Holder, at Escrow
Holder’s office, by check or by wire transfer, funds in the amount of the
Initial Deposit as a deposit on account of the Purchase
Price.  Immediately upon Escrow Holder’s receipt of the Initial
Deposit, Escrow Holder shall place the Initial Deposit in an interest-bearing
account, the interest to accrue to the Deposit (any subsequent references herein
to the Initial Deposit, the Additional Deposit and/or Deposit shall be deemed to
include any interest accrued thereon).

     

    Within one (1) Working Day after the
expiration of the Contingency Period, Buyer shall deposit with Escrow Holder, at
Escrow Holder’s office, by check or by wire transfer, funds in the amount of the
Additional Deposit as a deposit on account of the Purchase
Price.  Immediately upon Escrow Holder’s receipt of the Additional
Deposit, Escrow Holder shall place the Additional Deposit in the same account as
the Initial Deposit, which together shall be the Deposit.  The Deposit
shall then be non-refundable and shall not be returned to Buyer except as
provided in this Agreement.

     

    If the
transactions contemplated hereby close as provided herein, the Deposit shall be
paid to Seller and shall be credited toward the Purchase Price.  If
this Agreement is terminated pursuant to the terms hereof or if the transactions
do not close the Deposit shall be returned to Buyer or delivered to Seller as
otherwise specified in this Agreement.

     

    3. DELIVERY
OF MATERIALS FOR REVIEW.  Within five (5) days of the Effective
Date, Seller is to deliver or make available to Buyer at Buyer's general offices
in Washington, D.C., the materials listed on Exhibit B
(collectively, the “Documents”) for
Buyer's review to the extent such Documents are within the possession or control
of Seller.  Upon delivery of the Documents within Seller’s possession
or control, Seller shall prepare and deliver to Buyer, and Buyer shall
acknowledge receipt of, a Seller-certified list describing the Documents so
delivered and the other Documents listed on Exhibit B which do
not exist or are not in Seller’s possession or control.  Without
limitation on the foregoing, Seller shall make any other documents, files and
information reasonably requested by Buyer concerning the Property and which are
in Seller’s possession or control available for Buyer’s inspection at Seller’s
general offices or such other location as shall be mutually convenient to the
parties.

     

    
      
        S-5

      

      
        
        

        
          

        

      

      
        
        

      

    

    4. CONTINGENCIES.  Buyer’s
obligation under this Agreement to purchase the Property and consummate the
transactions contemplated hereby is subject to and conditioned upon, among other
things, the satisfaction or waiver by Buyer, in its sole and absolute discretion
and in the manner hereinafter provided, of each of the contingencies
(individually, a “Contingency”, and
collectively, the “Contingencies”) set
forth in this Section
4 in each case within the Contingency Period.

     

    A. Property
Review.  On or before the expiration of the Contingency Period,
Buyer shall have completed and shall be satisfied, in Buyer’s sole and absolute
discretion, with Buyer’s due diligence review, investigation and analysis of the
Property (the “Due
Diligence Review”), which may include, but shall not necessarily be
limited to, Buyer’s review, investigation and analysis of: (i) all of the
Documents; (ii) the physical condition of the Property; (iii) the adequacy and
availability at reasonable prices of all necessary utilities; (iv) the adequacy
and suitability of applicable zoning and Approvals; (v) the Leases and the
obligations from and to the tenants thereunder; (vi) market feasibility studies;
and (viii) such tests and inspections of the Property as Buyer may deem
necessary or desirable.

     

    B. Environmental
Audit.  On or before the expiration of the Contingency Period,
Buyer shall have completed to the satisfaction of Buyer, in its sole and
absolute discretion, an environmental audit and assessment of the Real Property
(the “Environmental
Audit”), including but not limited to the performance of such
non-invasive tests and inspections as Buyer may deem necessary or desirable in
order to determine the presence or absence of any Hazardous Materials (as
defined in Section
12(I) hereof).  Any other tests requested to be conducted on
the Property by Buyer shall be subject Sections 15(E) and (F),
below.

     

    C. Tenant
Estoppels.  Seller shall use its best efforts to obtain signed
Estoppel Certificate(s) and deliver the same to Buyer, on or before the
expiration of the Contingency Period, substantially in the form attached hereto
as Exhibit C
(the “Tenant
Estoppel”), executed by each tenant under each of the Leases with respect
to the status of such Lease, rent payments, tenant improvements, lease defaults
and other matters relating to such Lease, and disclosing no defaults, disputes
or other matters objectionable to Buyer in its sole discretion.

     

    The
foregoing Due Diligence Review, Environmental Audit and Tenant Estoppel
Contingencies are solely for Buyer’s benefit and only Buyer may determine such
Contingencies to be satisfied or waived. Buyer shall have the Contingency Period
in which to satisfy or waive such Contingencies.  A Contingency shall
be deemed to have been satisfied or waived by Buyer unless prior to the
expiration of the Contingency Period Buyer shall deliver to Seller a written
notice to terminate this Contract (the “Termination
Notice”).

     

    If Buyer
does not provide a Termination Notice, then the Contingencies shall be deemed
satisfied or waived and the parties shall, subject to the satisfaction of all
other terms and conditions applicable to the respective parties’ obligations
hereunder, be obligated to proceed to Closing.  If Buyer provides a
Termination Notice to Seller prior to the expiration of the Contingency Period,
then this Agreement shall terminate and be of no further force and effect at the
end of the Contingency Period without the further action of either
party.  Upon any such termination, Escrow Holder shall return the
Deposit to Buyer, and the parties shall have no obligation to proceed to
Closing.

     

    
      
        S-6

      

      
        
        

        
          

        

      

      
        
        

      

    

    With
respect to the Existing Contracts only, not less than five (5) days prior to the
expiration of the Contingency Period, Buyer shall furnish Seller with a written
notice of the contracts and agreements (the “Approved Contracts “)
which Buyer has elected to assume at the Closing.  All Existing
Contracts not included in any such notice shall be excluded from the Property to
be conveyed to Buyer and are herein respectively referred to as the “Rejected
Contracts”.  Prior to the end of the Contingency Period, Seller
shall inform Buyer of those of the Rejected Contracts that Seller elects, at
Seller’s sole cost and expense, to terminate on or before the Closing Date and
shall deliver to Buyer evidence satisfactory to Buyer of Seller’s termination on
or prior to Closing of all Rejected Contracts so identified by
Seller.  All other Rejected Contracts shall be accepted by Buyer
should Buyer elect to waive the Contingencies specified above.  If
Buyer fails to give the notice described in this paragraph within the
Contingency Period, then Buyer shall be deemed to have elected to assume all
contracts relating to the Property.

     

    D.           In
the event that Buyer exercises its right to cancel this Agreement pursuant to
Section 4, or for any other cause, Buyer shall immediately return to Seller all
documents, reports, studies, soils reports, environmental reports,
investigations, contracts, and all other documents delivered to Buyer pursuant
to this Agreement.  Furthermore, Buyer shall, to the extent it has the
legal right to do so, deliver copies of, and assign and transfer to Seller, all
documents, reports, studies, soils reports, environmental reports,
investigations, contracts, and other documents which have been prepared and
generated in connection with Buyer’s investigations pursuant to this Section 4,
except for any items which are subject to the attorney-client work product or
privilege, at no cost to Seller.

     

    5. TITLE
COMMITMENT; SURVEY; SEARCHES.  Buyer’s obligation to purchase
the Property and to consummate the transactions contemplated hereby shall also
be subject to and conditioned upon Buyer’s having approved the condition of
title to the Property and a survey of the Real Property in the manner provided
for in this Section
5.

     

    A. Title
Commitment.  Buyer shall cause the Title Company to deliver a
commitment (the “Title
Commitment”) to Buyer for the Title Policy (as defined in Section 6 hereof),
issued by the Title Company showing Seller as the owner of the Real Property,
together with legible copies of all documents (“Exception Documents”)
referred to in Schedule B of the Title Commitment.

     

    B. Survey.  Buyer
shall obtain a current ALTA survey (the “Survey”) of the Real
Property at Buyer’s cost and expense.

     

    C. Searches.  Buyer
may obtain current UCC, tax lien and judgment searches with respect to Seller
regarding liens, security interests and adverse claims affecting the Seller’s
interest in the Real Property and/or the Personal Property (collectively, “Searches”).

     

    
      
        S-7

      

      
        
        

        
          

        

      

      
        
        

      

    

    D. Permitted/Unpermitted
Exceptions.    Buyer shall have the right, up until
on or before ten (10) days before the end of the Contingency Period, to object
in writing (“Buyer’s
Exception Notice”) to any title matters that are not Permitted Exceptions
which are disclosed in the Title Commitment or Survey (herein collectively
called "Liens").  Buyer
shall have the right to amend Buyer’s Exception Notice to object to any title
matters that are not Permitted Exceptions which are disclosed in any
supplemental reports or updates to the Commitment or Survey delivered to Buyer
after the end of the Contingency Period provided that Buyer objects to the same
within five (5) days after Buyer’s receipt of the applicable supplemental
reports or updates to the Commitment but in no event after
Closing.  Unless Buyer shall timely object to the Liens, such Liens
shall be deemed to constitute additional Permitted Exceptions.  Any
exceptions which are timely objected to by Buyer shall be herein collectively
called the "Title
Objections."  Seller may elect (but shall not be obligated) to
remove or cause to be removed, or insured over, at its expense, any Title
Objections, and shall be entitled to a reasonable adjournment of the Closing
(not to exceed ten (10) days) for the purpose of such removal.  Except
as set forth below with regard to the Financial Encumbrances, Seller may elect
not to remove some or all of the Title Objections.  Seller shall
notify Buyer in writing within five (5) days after receipt of any Buyer's
Exception Notice of Title Objections whether Seller elects to remove any or all
of the Title Objections.  If Seller is unable to remove or endorse
over any Title Objections prior to the Closing in a manner satisfactory to Buyer
in its sole and absolute discretion, or if Seller elects not to remove one or
more Title Objections, Buyer may elect to either (a) terminate this Agreement by
giving written notice to Seller and Escrow Agent prior to the Closing, in which
event the Deposit shall be paid to Buyer and, thereafter, the parties shall have
no further rights or obligations hereunder, or (b) waive such Title Objections,
in which event such Title Objections shall be deemed additional "Permitted
Exceptions" and the Closing shall occur as herein provided without any reduction
of or credit against the Purchase Price.  Notwithstanding anything to
the contrary contained herein, any Lien which is each financial encumbrance such
as a mortgage, deed of trust, or other debt security, attachment, judgment, lien
for delinquent real estate taxes and delinquent assessments, mechanic’s or
materialmen’s lien, which is outstanding against the Property, or any part
thereof, that is revealed or disclosed by the Title Commitment and/or the
Searches (herein such matters are referred to as “Financial
Encumbrances”) shall automatically, and without any requirement for Buyer
to provide notice thereof to Seller, be deemed not to be a Title Objection and
Seller hereby covenants to remove all such Financial Encumbrances on or before
the Closing Date.

     

    E. Approved Title and
Survey.  The condition of title as approved by Buyer in
accordance with this Section 5 is referred
to herein as the “Approved Title” and
the Survey as approved by Buyer in accordance with this Section 5 is referred
to herein as the “Approved
Survey”.

     

    6. DEED;
TITLE POLICY.  Seller shall convey the Real Property to Buyer
by a grant deed in the form of Exhibit D attached
hereto (the “Deed”).  As
a condition to Buyer’s obligation to consummate the purchase of the Property and
other transactions contemplated hereby, as of Closing the Title Company shall be
unconditionally committed to issue to Buyer an ALTA Form B (revised 1992)
extended coverage Owner’s Title Insurance Policy issued by the Title Company,
dated the Closing Date and naming Buyer (or its nominee or assignee, if
applicable) as the insured, in the face amount of the Purchase Price, showing
Buyer (or its nominee or assignee, as applicable) to be the owner in fee simple
of the Real Property, subject to no exceptions other than Permitted Exceptions,
together with such endorsements as required by Buyer in the Buyer's Exception
Notice, all in form and substance reasonably satisfactory to Buyer (the "Title
Policy").  Buyer shall be entitled to request that the Title Company
provide such endorsements (or amendments) to the Title Policy as Buyer may
reasonably require, provided that (a) such endorsements (or amendments)
shall be at no cost to, and shall impose no additional liability on, Seller,
(b) Buyer's obligations under this Agreement shall not be conditioned upon
Buyer's ability to obtain such endorsements and, if Buyer is unable to obtain
such endorsements, Buyer shall nevertheless be obligated to proceed to close the
transaction contemplated by this Agreement without reduction of or set off
against the Purchase Price, and (c) the Closing shall not be delayed as a
result of Buyer's request.  

     

    
      
        S-8

      

      
        
        

        
          

        

      

      
        
        

      

    

    7. PRORATIONS.  The
following prorations shall be made between Seller and Buyer on the Closing Date,
computed with income and expenses for the Closing Date itself being allocated to
Buyer:

     

    A. Rents Payable Under
Leases.  The word “Rents” as used herein
shall be deemed to include, without limitation, (i) fixed monthly rents and
other fixed charges payable by the tenants under the Leases, (ii) any amounts
payable by the tenants by reason of provisions of the Leases relating to
escalations and pass-throughs of operating expenses and taxes, and adjustments
for increases in the Consumer Price Index and the like, (iii) any percentage
rents payable by the tenants under the Leases, if any, and (iv) rents or other
charges payable by the tenants under the Leases for services of any kind
provided to it (including, without limitation, making of repairs and
improvements, the furnishing of heat, electricity, gas, water, other utilities
and air-conditioning) for which a separate charge is made.

     

    Seller
shall collect and retain all Rents due and payable prior to the Closing and
Buyer shall receive a credit for all such Rents allocable to the period from and
after the Closing Date.  Rents collected subsequent to the Closing
Date, net of costs of collection, if any, shall first be applied to such
tenant’s current Rent obligations and then to past due amounts in the reverse
order in which they were due.  Subject to the foregoing, any such
Rents collected by Buyer shall, to the extent properly allocable to periods
prior to the Closing, be paid, promptly after receipt, to the Seller and any
portion thereof properly allocable to periods from and after the Closing Date
shall be retained by Buyer.  The term “costs of collection”
shall mean and include reasonable attorneys’ fees and other reasonable
out-of-pocket costs incurred in collecting any Rents.

     

    Seller
shall not be permitted after the Closing Date to institute proceedings against
the respective tenant to collect any past due Rents for periods prior to the
Closing Date; provided that  Buyer agrees to use commercially
reasonable efforts to collect such Rents and provided further that in no event
shall Buyer be obligated to terminate a Lease or dispossess a tenant after
Closing for failure to pay such Rents. If any past due Rents are not collected
from the tenants owing such delinquent amounts, Buyer shall not be liable to
Seller for any such amounts.

     

    Any
advance or prepaid rental payments or deposits paid by tenants prior to the
Closing Date and applicable to the period of time subsequent to the Closing Date
and any unapplied security deposits or other amounts paid by tenants, together
with any interest on both thereof to the extent such interest is due to tenants
shall be credited to Buyer on the Closing Date; provided, however, that such
amounts shall be reduced by any amounts due Seller from such security deposits
prior to Closing in accordance with the respective Leases.  Buyer
shall be bound by any obligation under a Lease to refund a security deposit
credited to Buyer as aforesaid, except to the extent that the amount of such
security deposit has been reduced due to any credit allowed Seller pursuant to
the terms of the applicable Lease.

     

    
      
        S-9

      

      
        
        

        
          

        

      

      
        
        

      

    

    No credit
shall be given either party for accrued and unpaid Rent or any other non-current
sums due from the tenants until said sums are paid.  In addition, if
as of the Closing Date there exists any rebate, rental concession, free-rent
period, credit, setoff or rent reduction under or with respect to any Lease
which extends beyond the Closing Date, then the prorations in favor of Buyer
hereunder shall include an amount equal to the aggregate amount of all such
rebates, rental concessions, free-rent periods, credits, setoffs or rent
reductions applicable to any period or periods after the Closing
Date.

     

    In the
event that subsequent to the Closing Buyer receives checks or other instruments
or items payable to Seller with respect to the Property, Seller hereby
authorizes Buyer to endorse Seller’s name thereon without recourse and apply the
proceeds in accordance with the foregoing; similarly, any checks or other
payment items received by Seller subsequent to the Closing with respect to the
Property shall be endorsed by Seller without recourse and promptly forwarded to
Buyer, who shall apply the proceeds thereof in accordance with the
foregoing.

     

    B. Rent
Adjustments.  Pending final adjustments and prorations, as
provided in the preceding Paragraph, Seller shall be paid all adjustment rent or
escalation payments, if any, payable under the Leases prior to Closing for taxes
and operating expenses for the Property, and Buyer shall retain all such rent or
payments payable after Closing.  As soon as all such taxes and
operating expenses passed through under the Leases for the calendar year 2007
are finally determined, the adjustment rent or escalation payments paid under
the Leases for calendar year 2007 shall be reprorated between Seller and Buyer
based on their respective share of such taxes and expenses for the calendar year
2007, and an appropriate payment shall be made from one party to the other, as
appropriate.

     

    C. Taxes and
Assessments.  Accrued general real estate taxes not yet due and
payable shall be prorated up to and including the Closing Date on the basis of
latest tax rate applied to the latest assessed valuation for the Real
Property.  Buyer shall receive a credit at Closing for all amounts
paid by the tenants under the Leases prior to the Closing for the payment of
such taxes.  Buyer shall pay all such taxes when they become due and
payable and, promptly thereafter, the parties shall re-prorate taxes and, if any
amount other than the amount that was used as the basis of the Closing
prorations is due to the taxing authority, an appropriate payment shall promptly
be made from one party to the other on the basis of the amount of taxes then due
and payable. Prior to or at Closing, Seller shall pay or have paid all real
estate tax bills which are due and payable prior to or on the Closing Date and
shall furnish evidence of such payment to Buyer and the Title
Company.

     

    D. Utilities.  Charges
for utilities and fuel, including, without limitation, steam, water,
electricity, gas and oil, except to the extent paid directly by the Tenants,
shall be prorated.

     

    E. Other
Prorations.  Charges payable under the Approved Contracts
assigned to Buyer pursuant to this Agreement shall be prorated as of the Closing
Date.  Buyer shall also receive a credit equal to any past due
payments (including interest or penalties due) from Seller to any of the other
parties to the Approved Contracts.

     

    
      
        S-10

      

      
        
        

        
          

        

      

      
        
        

      

    

    Seller
and Buyer agree that (1) none of the insurance policies relating to the Property
will be assigned to Buyer (and Seller shall pay any cancellation fees resulting
from the termination of such policies), and (2) no employees of Seller
performing services at the Property shall be employed by
Buyer.  Accordingly, there will be no prorations for insurance
premiums or payroll, and Seller shall be liable for all premiums and payroll
expenses in connection with the foregoing.

     

    If Seller
has made any deposit with any utility company or local authority in connection
with services to be provided to the Property, such deposits shall, if Buyer so
requests and if assignable, be assigned to Buyer at the Closing and Seller shall
receive a credit equal to the amounts so assigned.

     

    The
prorations and credits provided for above shall be made on the basis of a
written statement prepared by Seller and approved by Buyer.  At least
five (5) Working Days prior to the Closing Date, Seller, or Escrow Agent using
information provided by Seller, shall provide Buyer with a preliminary proration
and closing statement, together with backup documentation substantiating the
prorations provided for and the calculations performed, in order that Buyer may
verify Seller’s methods and calculations.  In the event any prorations
made pursuant hereto shall prove incorrect for any reason whatsoever, either
party shall be entitled to an adjustment to correct the same provided that it
makes written demand on the other within 18 months after the Closing
Date.

     

    8. CLOSING.

     

    A. Closing
Requirements.  The consummation of the sale and purchase of the
Property (the “Closing”) shall be
effected through a closing escrow which shall be established by Seller and Buyer
with the Escrow Holder and the Title Company.  All documents to be
delivered at the Closing shall be delivered to the Escrow Holder and all
payments to be made shall be delivered on or before the Closing Date to the
Title Company as provided herein, in escrow, pending the recording of the Deed
(following a datedown of title to the time of recording which does not disclose
any new matter affecting title to the Real Property which is not acceptable to
Buyer), and other instruments as are required to be recorded to effect the
transfer and conveyance of the Property, upon which recording all instruments
and funds shall then be delivered out of escrow.  The Title Company
shall be responsible for drafting the settlement statement and disbursing all
funds in accordance therewith and otherwise is accordance with the terms of this
Agreement.

     

    B. Additional Conditions to
Closing.  It is a condition to Buyer’s obligations to proceed
to Closing and to consummate the transactions contemplated hereby, that, as of
the Closing Date, (i) all of the Seller’s representations and warranties
hereunder shall be true and correct in all material respects and Seller’s
Closing Certificate delivered pursuant to Section 9 hereof
shall not disclose any qualifications or changes in Seller’s representations and
warranties set forth in Section 12 hereof,
which would have a material adverse effect on the use, operation, value,
marketability or financeability of the Property by Buyer; (ii) Seller shall have
performed in all material respects all of its covenants
hereunder;  (iii) the Title Company shall be unconditionally committed
to issue the Title Policy upon the recordation of the Deed; (iv) Seller shall
have delivered all other documents and other deliveries listed in Section 9
hereof.  If any condition to Buyer’s obligations hereunder is not
fulfilled, including any condition not set forth in this Subsection 8.B.,
Buyer shall have no obligation to proceed to Closing or to consummate the
transactions contemplated hereby.  Nothing in this Agreement shall
restrict Buyer’s rights and remedies in the event that the failure of any of the
foregoing conditions to be satisfied also constitutes a default by Seller
hereunder.

     

    
      
        S-11

      

      
        
        

        
          

        

      

      
        
        

      

    

    C. Seller’s Conditions to
Closing.  It is a condition to Seller’s obligations to proceed
to Closing and to consummate the transactions contemplated hereby, that, as of
the Closing Date, (i) all of the Buyer’s representations and warranties
hereunder shall be true and correct in all material respects; (ii) Buyer shall
have performed in all material respects all of its covenants hereunder,
including the delivery of the Purchase Price without claim to reduction or
offset; and (iii) Buyer shall have delivered all other documents and other
deliveries required of it under Section 9 hereof.  If any condition to
Seller’s obligations hereunder is not fulfilled, including any condition not set
forth in this Subsection 8.C., Seller shall have no obligation to proceed to
Closing or to consummate the transactions contemplated
hereby.  Nothing in this Agreement shall restrict Seller’s rights and
remedies in the event that the failure of any of the foregoing conditions to be
satisfied also constitutes a default by Buyer hereunder, in which event Seller
shall have the remedy set forth in Section 11(A) and (B).

     

    9. ESCROW.

     

    A. Seller’s Closing
Deliveries.  On or prior to the Closing Date, Seller shall
deliver to Escrow Holder the following documents and materials, all of which
shall be such form and substance as the parties have agreed during the
Contingency Period:

     

    (i) Deed; Transfer
Declarations.  The Deed, duly executed, acknowledged and in
recordable form, accompanied by all necessary transfer tax declarations of
Seller as may be required under applicable law in order to permit the recording
of the Deed.

     

    (ii) Bill of
Sale.  A duly executed and acknowledged bill of sale for the
Personal Property and Intangible Property, conveying to Buyer all of the
Personal Property and Intangible Property in the form of Exhibit E attached
hereto (the “Bill of
Sale”).

     

    (iii) Assignment of
Leases.  Two (2) originals of an assignment of the Leases and
all guaranties thereof, duly executed and acknowledged by Seller in the form of
Exhibit F
attached hereto (the “Assignment of
Leases”).

     

    (iv) Assignment of
Contracts.  Two (2) originals of an assignment of the Approved
Contracts, duly executed and acknowledged by Seller and to the extent required
under the terms of any Approved Contract, consented to by the other party to
such Contract in the form of Exhibit G attached
hereto (the “Assignment of
Contracts”).

     

    (v) Title Clearance
Documents.  An Affidavit  duly executed by Seller in
the form of Exhibit
H attached hereto.

     

    
      
        S-12

      

      
        
        

        
          

        

      

      
        
        

      

    

    (vi) FIRPTA
Affidavit.  A non-foreign certification, duly executed by
Seller under penalty of perjury, certifying that Seller is not a “foreign
person”, pursuant to Section 1445 (as may be amended) of the Internal Revenue
Code of 1986, as amended in the form of Exhibit I attached
hereto (“Section
1445”) and a California Form 593 (collectively, the “FIRPTA
Affidavit”).  If Seller shall fail or be unable to deliver the
same, then Buyer shall have the right to withhold such portion of the Purchase
Price as may be necessary, in the opinion of Buyer or its counsel, to comply
with Section 1445 and applicable California law.

     

    On or
prior to the Closing Date, Seller shall deliver to Buyer the following documents
and materials, all of which shall be in form and substance reasonably acceptable
to Buyer:

     

    (a) Insurance Policies and
Certificates.  To the extent in Seller’s possession or control,
copies of all insurance policies and current insurance certificates from the
tenants under the Leases evidencing that all insurance policies required to be
maintained by the tenants under the Leases are in full force and effect as
therein required.

     

    (b) Documents.  Originals
of all Documents, if not already delivered, or copies of same to the extent
originals do not exist.

     

    (c) Keys;
Manuals.  To the extent in Seller’s possession, keys to all
entrance doors in the Improvements, properly tagged for identification, and all
operating manuals relating to operation of the equipment and systems which are
part of the Property.

     

    (d) Rent
Roll.  An updated certified copy of the Rent Roll current as of
a date no earlier than five (5) Working Days prior to the Closing.

     

    (e) Notices to
Tenants.  Notice to each of the tenants and any guarantors
under the Leases, notifying them of the sale of the Property and directing them
to pay all future rent as Buyer may direct.

     

    (f) Notices to Parties Under
Approved Contracts.  Notices to each of the parties (other than
Seller) under the Approved Contracts, notifying them of the sale of the Property
and directing them to address all matters relating to the Approved Contracts as
Buyer may direct.

     

    (g) Closing
Statement.  A duplicate counterpart of a closing statement (the
“Closing
Statement”) prepared by Escrow Holder, and signed by Seller, setting
forth all prorations and credits required hereunder, signed by
Seller.

     

    (h) Other
Documents.  Such additional documents and instruments as may
reasonably be requested by Buyer in order to effectuate the transactions
contemplated hereby.

     

    
      
        S-13

      

      
        
        

        
          

        

      

      
        
        

      

    

    B. Buyer’s Deliveries at
Closing.  On or prior to the Closing Date, Buyer shall deliver
to the Title Company the Purchase Price for the Property as provided in Section
1.  On or prior to the Closing Date, Buyer shall deliver to
Escrow Holder two (2) duly executed counterparts of the Assignment of Contracts,
the Assignment of Leases and the Closing Statement and such additional documents
and instruments as may reasonably be requested by Seller in order to effectuate
the transactions contemplated hereby.

     

    C. Escrow
Agreement.  This Agreement shall constitute both an agreement
between Buyer and Seller and escrow instructions for Escrow Holder and the Title
Company.  If Escrow Holder or the Title Company requires separate or
additional escrow instructions which it deems necessary for its protection,
Seller and Buyer hereby agree promptly upon request by Escrow Holder or Title
Company to execute and deliver to Escrow Holder or Title Company such separate
or additional standard escrow instructions of Escrow Holder or Title Company
(the “Additional
Instructions”).  In the event of any conflict or inconsistency
between this Agreement and the Additional Instructions, this Agreement shall
prevail and govern, and the Additional Instructions shall so
provide.  The Additional Instructions shall not modify or amend the
provisions of this Agreement unless otherwise agreed to in writing by Seller and
Buyer.

     

    D. Actions of Escrow
Holder.  On the Closing Date, provided Buyer and Seller have
satisfied (or waived in writing) the conditions set forth in this Agreement,
Escrow Holder or title Company shall take the following actions in the order
indicated below:

     

    (i) Record
the Deed in the Official Records of Santa Clara County, California;

     

    (ii) Deliver
to Buyer a conformed copy of the recorded Deed, the Bill of Sale, Closing
Certificate and FIRPTA Affidavit, and one fully executed original of the
Assignment of Leases and Assignment of Contracts;

     

    (iii) Title
Company shall deliver to Seller, in cash or current funds, all sums due Seller
pursuant to this Agreement and one original of the fully executed Assignment of
Leases and Assignment of Contracts;

     

    (iv) Cause the
Title Company to issue the Title Policy; and

     

    (v) Deliver
to Seller and Buyer a closing statement which has been certified by the Title
Company to be true and correct.

     

    E. Procedures Upon Failure of
Condition.  Except as otherwise expressly provided herein, if
any of the conditions set forth in this Agreement is not timely satisfied or
waived for a reason other than the default of Buyer or Seller in the performance
of their respective obligations under this Agreement:

     

    (i) This
Agreement, the escrow and the respective rights and obligations of Seller and
Buyer hereunder shall terminate;

     

    
      
        S-14

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii) Escrow
Holder and Title Company shall promptly return to Buyer all funds of Buyer in
its possession, including the Deposit, and to Seller and Buyer all documents
deposited by them respectively, which are then held by Escrow Holder;
and

     

    (iii) Any
escrow cancellation and title charges shall be borne by Buyer.

     

    10. CLOSING
COSTS; PROPERTY COSTS.  Seller shall pay:  (A) all
recording fees for removal of encumbrances against the Property; (B) 50% of all
of the transfer taxes payable in connection with the transfer of the Property to
Buyer and the recording of the Deed; (C) 50% of the cost of the premium for the
CLTA portion of the Title Policy; (D) 50% all of the escrow fees and charges
owing to Escrow Holder; and (E) all of the Seller’s legal fees and expenses and
the cost of all opinions, certificates, instruments, documents and papers Seller
is required to deliver or to cause to be delivered hereunder and, without
limitation, the cost of all performances by Seller of its obligations hereunder.

     

    Buyer
shall pay:   (A) the cost of the premium for the ALTA portion of
the Title Policy; (B) 50% of all of the transfer taxes payable in connection
with the transfer of the Property to Buyer and the recording of the Deed; (C)
50% of the cost of the premium for the CLTA portion of the Title Policy; (D) 50%
all of the escrow fees and charges owing to Escrow Holder; (E) cost of updating
the Survey; and (F) all of Buyer’s legal fees and expenses and the cost of
preparing all documents and papers Buyer is required to deliver or to cause to
be delivered hereunder, and, without limitation, the cost of all performances by
Buyer of its obligations hereunder.

     

    All other closing costs shall be
allocated between Buyer and Seller in accordance with local custom.

     

    11. REMEDIES.

     

    A. Seller’s Sole
Remedy.  If the closing of this transaction fails to occur due
to Buyer’s default under this Agreement (all of the conditions to Buyer’s
obligations to close having been satisfied or waived), Seller’s sole and
exclusive remedy shall be to terminate the escrow and receive and retain the
Deposit in accordance with Section
11(B).

     

    B. LIQUIDATED DAMAGES ON
BUYER’S DEFAULT.  BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE
THAT, IN THE EVENT THE CLOSING FAILS TO OCCUR DUE TO A BUYER DEFAULT (ALL OF THE
CONDITIONS TO BUYER’S OBLIGATIONS TO CLOSE HAVING BEEN SATISFIED OR WAIVED),
SELLER WILL SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL NATURE OF
THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE SPECIAL NATURE OF THE
NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT, BE IMPRACTICAL OR EXTREMELY
DIFFICULT TO ASCERTAIN.  IN ADDITION, BUYER WISHES TO HAVE A
LIMITATION PLACED UPON THE POTENTIAL LIABILITY OF BUYER TO SELLER IN THE EVENT
THE CLOSING FAILS TO OCCUR DUE TO A BUYER DEFAULT, AND WISHES TO INDUCE SELLER
TO WAIVE OTHER REMEDIES WHICH SELLER MAY HAVE IN THE EVENT OF A BUYER
DEFAULT.  BUYER AND SELLER, AFTER DUE NEGOTIATION, HEREBY ACKNOWLEDGE
AND AGREE THAT THE AMOUNT OF THE DEPOSIT REPRESENTS A REASONABLE ESTIMATE OF THE
DAMAGES WHICH SELLER WILL SUSTAIN IN THE EVENT OF SUCH BUYER
DEFAULT.  BUYER AND SELLER HEREBY AGREE THAT SELLER MAY, IN THE EVENT
THE CLOSING FAILS TO OCCUR DUE TO A BUYER DEFAULT, TERMINATE THIS AGREEMENT AND
CANCEL THE ESCROW BY WRITTEN NOTICE TO BUYER AND ESCROW HOLDER, WHEREUPON ESCROW
HOLDER SHALL DELIVER THE DEPOSIT TO SELLER AND SELLER SHALL RECEIVE THE DEPOSIT
AS LIQUIDATED DAMAGES.  SUCH RETENTION OF THE DEPOSIT BY SELLER IS
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS 1671,
1676 AND 1677 OF THE CALIFORNIA CIVIL CODE, AND SHALL NOT BE DEEMED TO
CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTION 3275 OR SECTION
3369 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR
PROVISION.  FOLLOWING TERMINATION OF THIS AGREEMENT, CANCELLATION OF
THE ESCROW AND THE DELIVERY TO AND RETENTION OF THE DEPOSIT BY SELLER AS
LIQUIDATED DAMAGES PURSUANT TO THIS SECTION 11(B), ALL OF
THE RIGHTS AND OBLIGATIONS OF BUYER AND SELLER UNDER THIS AGREEMENT SHALL BE
TERMINATED.

     

    
      
        S-15

      

      
        
        

        
          

        

      

      
        
        

      

    

    BUYER AND
SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS
SECTION 11(B)
AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS
TERMS.

     

    
      	 
      	
              SELLER:
      ______________

              (Initials)

               

            
	
              BUYER:
      _______________

              (Initials)

            	
              SELLER:
      ______________

              (Initials)

               

            
	 
      	
              SELLER:
      ______________

              (Initials)

               

            

    

    

    C. Buyer’s
Remedies.  In the event of a default by Seller hereunder, the
entire Deposit shall immediately be returned to Buyer, Seller shall pay all
escrow cancellation and title charges and Buyer may, at its option, either (i)
terminate this Agreement and receive a refund of its actual, out of pocket due
diligence costs not to exceed Fifty Thousand Dollars ($50,000) or (ii)
specifically enforce the terms and conditions of this Agreement.  With
respect to any default by Seller prior to Closing, in no event shall Buyer be
entitled to sue Seller for damages or exercise any other right or remedy as a
result of any such breach or default, Buyer hereby waives any such rights or
remedies and agrees that the above remedies shall constitute Buyer's sole and
exclusive remedies as a result thereof.

     

    12. SELLER’S
REPRESENTATIONS AND WARRANTIES.  As a material inducement to
the execution and delivery of this Agreement by Buyer and the performance by
Buyer of its duties and obligations hereunder, Seller does hereby acknowledge,
warrant, represent and agree to and with Buyer that as of the Effective Date and
as of the Closing Date:

     

    
      
        S-16

      

      
        
        

        
          

        

      

      
        
        

      

    

    A. Compliance With
Laws.  Except as disclosed on Exhibit J, Seller has
received no written notice of, and, to Seller's knowledge, there is no material
violation or alleged material violation of any legal requirement which would
materially affect the Property, including, without limitation, any material
violation or alleged material violation of any local, state or federal
environmental, zoning, handicap or fire law, ordinance, code, regulation, rule
or order, and specifically including, without limitation, variances or special
permits affecting the Property and the Americans With Disabilities
Act.

     

    B. Litigation.  Except
as disclosed on Exhibit J, Seller has
not received written notice of any pending or to Seller’s knowledge threatened
litigation or governmental proceeding affecting Seller, or the Property, that
relates to the Property, the validity or enforceability of this Agreement or any
instrument or document to be delivered by Seller in connection with the
transactions contemplated hereby.

     

    C. Governmental
Actions.  Except as disclosed on Exhibit J, there are
no pending, and Seller has received no written notice of any threatened or
proposed (i) proceeding or governmental action to modify the zoning
classification of, or to condemn, or purchase in lieu thereof, all or any part
of the Property; (ii) reassessment or special assessments or penalties or
interest with respect to real estate taxes or any other assessments applicable
to the Property, other than any reassessment that may result solely from the
sale of the Property to Buyer; or(iii) proceeding before any court or
administrative agency, the adverse resolution of which would have a materially
adverse effect on the value or operations of the Property.

     

    D. Due
Authorization.  Seller(s) are the duly appointed trustees of a
trust organized and validly existing, under the laws of the State of
California.  Each Seller has full power to execute, deliver and carry
out the terms and provisions of this Agreement and each of the other agreements,
instruments and documents herein required to be made or delivered by Seller
pursuant hereto, and has taken all necessary action in connection with the
execution, delivery and performance of this Agreement and such other agreements,
instruments and documents.  The individuals executing this Agreement
and all other agreements, instruments and documents herein required to be made
or delivered by Seller pursuant hereto on behalf of Seller are and shall be duly
authorized to sign the same on Seller’s behalf and to bind Seller
thereto.

     

    E. Enforceability.  This
Agreement has been, and each and all of the other agreements, instruments and
documents herein required to be made or delivered by Seller pursuant hereto have
been, or on the Closing Date will have been, executed by Seller and when so
executed, are and shall be, to the best of Seller’s knowledge, legal, valid, and
binding obligations of Seller enforceable against Seller in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting the rights of
creditors generally and, as to enforceability, the general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

     

    F. No
Conflict.  The execution and delivery of, and consummation of
the transactions contemplated by, this Agreement by Seller are not prohibited
by, and will not conflict with, constitute grounds for termination of, or result
in the breach of any agreement or instrument to which Seller is now a party or
by which it or the Property is bound, or, to the best of Seller’s knowledge, any
order, rule or regulation of any court or other governmental agency or
official.

     

    
      
        S-17

      

      
        
        

        
          

        

      

      
        
        

      

    

    G. Environmental
Matters.  Seller has received no written notice of any present,
pending or threatened actions or proceedings by any governmental agency or any
other entity regarding public health risks or the environmental condition of the
Property, or the disposal or presence of Hazardous Materials on the Property, or
regarding any violation of Environmental Law at the Property (collectively,
“Environmental
Actions”); and (ii) to Seller’s knowledge, Seller has provided Buyer all
documents that are material to the environmental condition of the Property in
Seller’s possession or control.

     

    The term
“Environmental
Laws” means all federal, state or local laws, ordinances, requirements
and regulations (including consent decrees and administrative orders) relating
to health, safety, industrial hygiene, waste disposal, or the protection of the
environment, including, without limitation: the federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the federal
Superfund Amendments and Reauthorization Act of 1986, the federal Resource
Conservation and Recovery Act of 1976, the federal Clean Air Act, the federal
Water Pollution Control Act and federal Clean Water Act of 1977, the federal
Insecticide, Fungicide and Rodenticide Act, the federal Pesticide Act of 1978,
the federal Toxic Substances Control Act, the federal Safe Drinking Water Act,
the federal Hazardous Materials Transportation Act, and all amendments thereto
and regulations adopted and publications promulgated pursuant
thereto.  The term “Hazardous Materials”
includes oil and petroleum products, asbestos, polychlorinated biphenyls, radon
and urea formaldehyde, and all other materials classified as hazardous or toxic
under any Environmental Law.  The term “Excluded Materials”
means (a) ordinary office supplies, (b) household cleaning supplies and (c) the
materials used by the tenants of the Property as of the date hereof in the
ordinary course of their business at the Property, in each case only so long as
the presence and use thereof does not violate any Environmental Law and so long
as such use is in accordance with the terms of the applicable
Lease.

     

    In
addition to the foregoing, Seller agrees (to the extent expressly permitted by
the terms of any Environmental Insurance carried by Seller in connection with
the Property) Seller shall assign to Buyer to right to receive proceeds under
any such Environmental Policy in a manner as may be permitted by the carrier
thereof.

     

    H. Leases.  The
tenant listed in the Rent Roll is the only tenant occupying the Property through
Seller, and to Seller's knowledge there are no other leases, tenancies or other
arrangements under which any other party has a right to occupy all or any part
of the Property.  A copy of all Leases, and all amendments thereto and
guaranties thereof, if any, have been furnished by Seller to Buyer and the
copies so provided are true, correct and complete.  The Leases have
not been amended, modified or terminated except for any amendments delivered to
Buyer pursuant to the preceding sentence.  No tenant under any of the
Leases has any renewal or expansion options except as set forth in the Leases
and no tenant has any purchase options, rights of first offer or first refusal
or any other options applicable to the Property or any part
thereof.  No tenant possess any credit, offset or claim against its
obligation to pay rent, by reason of prepayment or otherwise, subject, however,
to each tenant’s rights with respect to its security deposit.  The
Leases are presently in full force and effect and there are no defaults, nor
have any events occurred which, with the passage of time or giving of notice, or
both, would constitute defaults, by Seller thereunder; and, to Seller’s
knowledge, there are no defaults, nor have any events occurred which, with the
passage of time or giving of notice, or both, would constitute defaults, by any
tenant thereunder.  Seller has not received any notice from any tenant
asserting a claim, default or right to set-off rent by reason of the landlord’s
failure to perform its obligations pursuant to the Leases nor any notice
asserting a claim by any tenant to a right to abate rent.

     

    
      
        S-18

      

      
        
        

        
          

        

      

      
        
        

      

    

    For purposes of this Agreement and any
document delivered at Closing, whenever the phrase "to Seller's knowledge," or
the "knowledge" of any Seller or words of similar import are used, they shall be
deemed to refer to facts within the actual knowledge only of Lowell “Bob” Bridge
and no others, at the times indicated only, without duty of inquiry
whatsoever.  Buyer acknowledges that the individuals named above are
named solely for the purpose of defining and narrowing the scope of Seller's
knowledge and not for the purpose of imposing any liability on or creating any
duties running from such individuals to Buyer.  Buyer covenants that
it will bring no action of any kind against such individuals, any shareholder,
manager, officer partner or member of Seller, as applicable,
or  related to or arising out of these representations and
warranties.

     

    13. BUYER’S
REPRESENTATIONS AND WARRANTIES.  As a material inducement to
the execution and delivery of this Agreement by Seller and the performance by
Seller of its duties and obligations hereunder, Buyer does hereby acknowledge,
warrant, represent and agree to and with Seller that as of the Effective Date
and as of the Closing Date:

     

    A. Due
Authorization.  Buyer is a limited liability company organized,
validly existing and in good standing under the laws of the State of
Delaware.  Buyer has full power to execute, deliver and carry out the
terms and provisions of this Agreement and each of the other agreements,
instruments and documents herein required to be made or delivered by Buyer
pursuant hereto, and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and such other agreements,
instruments and documents.  The individuals executing this Agreement
and all other agreements, instruments and documents herein required to be made
or delivered by Buyer pursuant hereto on behalf of Buyer are and shall be duly
authorized to sign the same on Buyer’s behalf and to bind Buyer
thereto.

     

    B. Enforceability.  This
Agreement has been, and each and all of the other agreements, instruments and
documents herein required to be made or delivered by Buyer pursuant hereto have
been, or on the Closing Date will have been, executed by Buyer or on behalf of
Buyer, and when so executed, are and shall be, to the best of each Seller’s
actual knowledge, legal, valid, and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, and other similar laws
affecting the rights of creditors generally and, as to enforceability, the
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

     

    C. No
Conflict.  The execution and delivery of, and consummation of
the transactions contemplated by, this Agreement by Buyer are not prohibited by,
and will not conflict with, constitute grounds for termination of, or result in
the breach of any agreement or instrument to which Buyer is now a party or by
which it is bound, or any order, rule or regulation of any court or other
governmental agency or official, which prohibition or conflict would have an
adverse effect on Buyer’s ability to perform its obligations under this
Agreement or the documents to be executed by Buyer in connection with this
Agreement.

     

    
      
        S-19

      

      
        
        

        
          

        

      

      
        
        

      

    

    14. BUYER'S
INDEPENDENT INVESTIGATION.

     

    A. Buyer has
been given, or will be given before the end of the Contingency Period, a full
opportunity to inspect and investigate each and every aspect of the Property,
either independently or through agents of Buyer's choosing, including, without
limitation:

     

    (i) All
matters relating to title, together with all governmental and other legal
requirements such as taxes, assessments, zoning, use permit requirements, and
building codes;

     

    (ii) The
physical condition and aspects of the Property, including, without limitation,
the interior, the exterior, the square footage within the improvements on the
Real Property and within each tenant space therein, the structure, the paving,
the utilities, and all other physical and functional aspects of the Property,
including, without limitation, an examination for the presence or absence of
Hazardous Materials, which shall be performed or arranged by Buyer at Buyer's
sole expense;

     

    (iii) Any
easements and/or access rights affecting the Property;

     

    (iv) The
Leases and all matters in connection therewith, including, without limitation,
the ability of the Tenants to pay rent;

     

    (v) The
Contracts, the Licenses and Permits, the Commission Agreements and any other
documents or agreements of significance affecting the Property; and

     

    (vi) All other
matters of material significance affecting the Property or delivered to Buyer by
Seller in accordance with this Agreement, or which Buyer otherwise reasonably
considers to be relevant to the acquisition of the Property.

     

    THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND BUYER, THIS AGREEMENT REFLECTS
THE MUTUAL AGREEMENT OF SELLER AND BUYER, AND BUYER SHALL CONDUCT ITS OWN
INDEPENDENT EXAMINATION OF THE PROPERTY.  EXCEPT  AS
EXPRESSLY PROVIDED IN THIS AGREEMENT AND THE DOCUMENTS DELIVERED AT CLOSING,
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, AND BUYER HEREBY ACKNOWLEDGES
THAT NO REPRESENTATIONS HAVE BEEN MADE.  EXCEPT AS EXPRESSLY PROVIDED
IN THIS AGREEMENT AND THE DOCUMENTS DELIVERED AT CLOSING, SELLER SPECIFICALLY
DISCLAIMS, AND NEITHER IT NOR ANY OTHER PERSON IS MAKING, ANY REPRESENTATION,
WARRANTY OR ASSURANCE WHATSOEVER TO BUYER AND NO WARRANTIES OR REPRESENTATIONS
OF ANY KIND OR CHARACTER, EITHER EXPRESS OR IMPLIED, ARE MADE BY SELLER OR
RELIED UPON BY BUYER WITH RESPECT TO THE STATUS OF TITLE TO OR THE MAINTENANCE,
REPAIR, CONDITION, DESIGN OR MARKETABILITY OF THE 

     

    
      
        S-20

      

      
        
        

        
          

        

      

      
        
        

      

      PROPERTY, OR ANY PORTION THEREOF,
INCLUDING BUT NOT LIMITED TO (A) ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, (B) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, (C) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS, (D) ANY RIGHTS OF BUYER UNDER APPROPRIATE
STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, (E) ANY CLAIM BY BUYER FOR
DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, LATENT OR PATENT, WITH
RESPECT TO THE IMPROVEMENTS OR THE PERSONAL PROPERTY, (F) THE FINANCIAL
CONDITION OR PROSPECTS OF THE PROPERTY AND (G) THE COMPLIANCE OR LACK
THEREOF OF THE REAL PROPERTY OR THE IMPROVEMENTS WITH GOVERNMENTAL REGULATIONS,
IT BEING THE EXPRESS INTENTION OF SELLER AND BUYER THAT, EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT AND THE DOCUMENTS TO BE DELIVERED AT THE CLOSING, THE
PROPERTY WILL BE CONVEYED AND TRANSFERRED TO BUYER IN ITS PRESENT CONDITION AND
STATE OF REPAIR, "AS IS" AND "WHERE IS", WITH ALL FAULTS.  BUYER
REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF
REAL ESTATE, AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF
BUYER'S CONSULTANTS IN PURCHASING THE PROPERTY.  EXCEPT FOR SELLER’S
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, BUYER ACKNOWLEDGES
AND AGREES THAT IT WILL HAVE THE OPPORTUNITY TO CONDUCT SUCH INSPECTIONS,
INVESTIGATIONS AND OTHER INDEPENDENT EXAMINATIONS OF THE PROPERTY AND RELATED
MATTERS, INCLUDING BUT NOT LIMITED TO THE PHYSICAL AND ENVIRONMENTAL CONDITIONS
THEREOF, DURING THE DUE DILIGENCE PERIOD AND WILL RELY UPON SAME AND NOT UPON
ANY STATEMENTS OF SELLER OR OF ANY MEMBER, MANAGER, OFFICER, DIRECTOR, AGENT OR
ATTORNEY OF SELLER.  BUYER ACKNOWLEDGES THAT ALL INFORMATION OBTAINED
BY BUYER WILL BE OBTAINED FROM A VARIETY OF SOURCES AND SELLER WILL NOT BE
DEEMED TO HAVE REPRESENTED OR WARRANTED THE COMPLETENESS, ADEQUACY, TRUTH OR
ACCURACY OF ANY OF THE DUE DILIGENCE ITEMS OR OTHER SUCH INFORMATION HERETOFORE
OR HEREAFTER FURNISHED TO BUYER.  UPON CLOSING, BUYER WILL ASSUME THE
RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND
INVESTIGATIONS.  BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING,
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER WILL SELL AND
CONVEY TO BUYER, AND BUYER WILL ACCEPT THE PROPERTY, "AS IS, WHERE IS," WITH ALL
FAULTS.  BUYER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL
AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE
PROPERTY, BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY.  SELLER
IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS,
REPRESENTATIONS OR 

       

      
        
          S-21

        

        
          
          

          
            

          

        

        
          
          

        

      

      INFORMATION PERTAINING TO THE
PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER
PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO
HEREIN.  BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE "AS
IS, WHERE IS" NATURE OF THIS SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER
ADVERSE MATTERS THAT MAY BE ASSOCIATED WITH THE PROPERTY.  BUYER, WITH
BUYER'S COUNSEL, HAS FULLY REVIEWED THE DISCLAIMERS AND WAIVERS SET FORTH IN
THIS AGREEMENT, AND UNDERSTANDS THE SIGNIFICANCE AND EFFECT
THEREOF.  BUYER ACKNOWLEDGES AND AGREES THAT THE DISCLAIMERS AND OTHER
AGREEMENTS SET FORTH HEREIN ARE AN INTEGRAL PART OF THIS AGREEMENT, AND THAT
SELLER WOULD NOT HAVE AGREED TO SELL THE PROPERTY TO BUYER FOR THE PURCHASE
PRICE WITHOUT THE DISCLAIMER AND OTHER AGREEMENTS SET FORTH IN THIS
AGREEMENT.  THE TERMS AND CONDITIONS OF THIS PARAGRAPH WILL EXPRESSLY
SURVIVE THE CLOSING, WILL NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS
AND WILL BE INCORPORATED INTO THE DEED.

    

     

    B. Buyer's Release of
Seller.

     

    (i) Seller Released From
Liability.  Except for claims against Seller based (i) upon a
breach of any representation or warranty made by Seller in this Agreement or any
of the documents delivered by Seller at Closing, (ii) upon any obligations or
liabilities of Seller under this Agreement or any of the documents delivered by
Seller at Closing, or (iii) fraud by Seller in connection with this Agreement,
Seller is hereby released from all responsibility and liability to Buyer
regarding the condition (including the presence in the soil, air, structures and
surface and subsurface waters, of Hazardous Materials or substances that have
been or may in the future be determined to be toxic, hazardous, undesirable or
subject to regulation and that may need to be specially treated, handled and/or
removed from the Property under current or future federal, state and local laws,
regulations or guidelines), valuation, salability or utility of the Property, or
its suitability for any purpose whatsoever.  Buyer acknowledges that
it has inspected the Property, observed its physical characteristics and
existing conditions and had the opportunity to conduct such investigation and
study on and of said Property and adjacent areas as it deemed necessary, and
hereby waives any and all objections to or complaints (including but not limited
to actions based on federal, state or common law and any private right of action
under CERCLA, RCRA or any other state and federal law to which the Property is
or may be subject) regarding physical characteristics and existing conditions,
including without limitation structural and geologic conditions, subsurface soil
and water conditions and solid and hazardous waste and Hazardous Materials on,
under, adjacent to or otherwise affecting the Property.  In that
connection, Buyer, on behalf of itself, its successors, assigns and
successors-in-interest and such other persons and entities, waives the benefit
of California Civil Code Section 1542, which provides as
follows:

     

     

    "A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor."

     

    
      
        S-22

      

      
        
        

        
          

        

      

      
        
        

      

    

    Buyer
further hereby assumes the risk of changes in applicable laws and regulations
relating to past, present and future environmental conditions on the Property,
and the risk that adverse physical characteristics and conditions, including
without limitation the presence of Hazardous Materials or other contaminants,
may not be revealed by its investigation.

     

    15. ACTIONS
AFTER THE EFFECTIVE DATE.  The parties covenant to do the
following through the Closing Date:

     

    A. Title.  From
and after the end of the Effective Date, Seller shall not make or permit any
changes to the Property or to the condition of title to the Property that would
change the Approved Title or the Approved Survey except with Buyer’s advance
written consent, which consent may not be unreasonably withheld.  In
this regard, Seller shall not sell, assign or create any right, title or
interest in the Property, or any part thereof, or create, or permit to exist,
any lien, encumbrance or charge thereon, without the prior consent of Buyer,
which consent may be withheld in Buyer’s sole discretion.

     

    B. Maintenance and Operation of
Property.  From and after the Effective Date, Seller shall
maintain existing insurance coverage in full force and effect, and shall operate
and maintain the Property in substantially the same manner as operated and
maintained as of the Effective Date, shall not delay or defer any repair or
maintenance item, and shall pay all bills and obligations arising from the
Property as payment becomes due.  Seller shall not make any material
alterations to or upon the Property, except with Buyer’s advance written
consent, which consent shall not be unreasonably withheld or
delayed.

     

    C. Leases and
Agreements.  From and after the Effective Date, Seller shall
not amend or terminate any of the Leases or any of the Approved Contracts, shall
not make any other agreement concerning the Property, including, without
limitation, any new leases of space in the Property, without Buyer’s advance
written consent, and shall perform all of its obligations under the Leases and
Approved Contracts.  At Closing, Buyer shall reimburse Seller for
leasing commissions and tenant improvement costs relating to any new lease
approved in writing by Buyer; provided, however, that Buyer approved all such
costs in writing at the time Buyer’s approval of such new lease was
obtained.

     

    D. Representations and
Warranties.  Each party shall use commercially reasonable
efforts to prevent any act or omission that would render any of its
representations and warranties herein untrue or misleading, and shall
immediately notify the other party if such act or omission occurs.

     

    E. Entry.  As
of the Effective Date, during normal business hours prior to the Closing, and
subject to the rights of tenants under the Leases, Buyer and its agents,
employees and contractors (collectively, “Permittees”) shall
have reasonable access to the Property at agreed upon times for agreed upon
purposes on at least forty-eight (48) hours prior notice to
Seller.  Seller shall make reasonable efforts to have an agent
available to accompany Buyer or any Permittees, and in all events Seller shall
have the right to have a representative present during any visits to or
inspections of the Property by Buyer or any Permittees.  Buyer will
conduct its Due Diligence in a manner which is not disruptive to Tenants or the
normal operation of the Property.  Buyer will not enter the Property
or contact any governmental or quasi-governmental entities, without Seller's
prior written consent, which consent shall not be unreasonably withheld or
delayed.  Neither Buyer nor any Permittees may contact any Tenants at
the Real Property or make any inquiries of such Tenants which in any way relate
to the Property or to Seller without Seller's prior written consent. In the
event Buyer desires to conduct any physically intrusive Due Diligence, such as
sampling of soils, other media, building materials, or the like, Buyer will
identify in writing exactly what procedures Buyer desires to perform and request
Seller's express written consent.  Upon receipt of Seller's written
consent, Buyer and all Permittees shall, in performing such Due Diligence,
comply with the agreed upon procedures and with any and all laws, ordinances,
rules, and regulations applicable to the Property and will not engage in any
activities which would violate any permit, license, or environmental law or
regulation.  Buyer and any Permittees
will:  (a) maintain comprehensive general liability (occurrence)
insurance in terms and amounts (at least $1,000,000) satisfactory to Seller
covering any accident arising in connection with the presence of Buyer or the
other Permittees on the Property or Improvements, and deliver a certificate of
insurance, which names the Seller and the Property Manager as additional
insureds thereunder verifying such coverage to Seller prior to entry upon the
Real Property or Improvements; (b) promptly pay when due the costs of all
entry and inspections and examinations done with regard to the Property; and
(c) restore the Property and Improvements to the condition in which the
same were found before any such entry upon the Property and inspection or
examination was undertaken.

     

    
      
        S-23

      

      
        
        

        
          

        

      

      
        
        

      

    

    In addition, Buyer shall defend,
indemnify, and hold harmless Seller, the Property and Seller's managers,
officers, partners, shareholders, trustees, beneficiaries, and members, as
applicable, from and against all losses, costs, damages, claims, and liabilities
(whether arising out of injury or death to persons or damage to the Property or
otherwise) including, but not limited to, costs of remediation, restoration and
other similar activities, mechanic's and materialmen's liens and attorneys'
fees, arising out of or in connection with Buyer's Due Diligence, Buyer's breach
of its obligations under Section 15 E. or Buyer's or any Permittee's entry upon
the Property, unless any of the same are caused solely by the gross negligence
or willful misconduct of Seller, Seller's managers, officers, partners,
shareholders, trustees, or members, as applicable.  The provisions of
this Section 15 E. shall survive the Closing or, if the purchase and sale
is not consummated, any termination of this Agreement and shall not be subject
to any survival limitation otherwise set forth in this Agreement.

     

    F. Applications.  Following
the Effective Date, Seller shall not make application to any governmental entity
for any Approvals or any change in the zoning, affecting the Real Property,
except in each case with Buyer’s advance written consent.

     

    16. DAMAGE TO
PROPERTY; TAKING.

     

    A. Taking.  If
the Property or any material part thereof is taken or is the subject of a notice
of taking by eminent domain prior to the Closing Date, Seller shall promptly
notify Buyer.  Within ten (10) Working Days after such notice, Buyer
shall give notice that it elects to (a) terminate this Agreement, in which event
Escrow Holder shall return the entire Deposit to Buyer and the parties shall
have no further obligations hereunder, or (b) proceed to Closing, in which event
Seller shall pay over and assign to Buyer all awards recovered or recoverable on
account of such taking.  If Buyer elects to proceed under clause (b)
above, Seller shall not compromise, settle, or adjust any claims to such awards
without Buyer’s prior written consent.

     

    
      
        S-24

      

      
        
        

        
          

        

      

      
        
        

      

    

    B. Damage.  Risk
of loss up to and including the Closing Date shall be borne by
Seller.  In the event of any material damage to or destruction of the
Property or any portion thereof, Buyer may, at its option, by notice to Seller
given within ten (10) Working Days after Seller notifies Buyer in writing of
such damage or destruction (and if necessary the Closing Date shall be extended,
but not beyond the Outside Closing Date, to give Buyer the full 10-day period to
make such election):  (i) terminate this Agreement, in which
event Escrow Holder shall return the entire Deposit to Buyer and the parties
shall have no further obligations hereunder (except the indemnity obligations of
each party, which shall survive indefinitely and any other obligations set forth
herein which expressly survive the termination of this Agreement), or
(ii) proceed under this Agreement with no adjustment of the Purchase Price,
receive any insurance proceeds (including any rent loss insurance applicable to
any period on and after the Closing Date) due Seller as a result of such damage
or destruction and assume responsibility for such repair, and Buyer shall
receive a credit at Closing for any deductible, uninsured or coinsured amount
under said insurance policies.  If Buyer elects (ii) above, Seller
will cooperate (at no material expense to Seller) with Buyer in obtaining the
insurance proceeds and such agreements from Seller’s insurers.  If the
Property is not materially damaged, then the parties shall proceed to Closing as
provided in clause (ii) above. “Material damage” and
“Materially
damaged” means damage reasonably exceeding $250,000, or that entitles any
tenant of the Property to terminate its lease, or which, in Buyer’s or Seller’s
reasonable estimation, will take longer than 180 days to repair.

     

    C. Waiver.  Failure
of Buyer to timely provide a notice of election in accordance with this Section 15, shall be
deemed an election by Buyer to terminate this Agreement.  Seller and
Buyer each expressly waive the provisions of California Civil Section 1662 and
hereby agree that the provisions of this Section 15 shall
govern the parties’ obligations in the event of any damage or destruction to the
Property or the taking of all or any part of the Real Property.

     

    17. SURVIVAL.  All
representations and warranties and indemnitees by the respective parties
contained herein are intended to and shall remain true and correct as of the
Closing, shall be deemed to be material, and shall survive the delivery of the
Deed and transfer of title for a period of six (6) months or such longer period
if specifically specified therefore.  Any covenants and conditions
herein that must be operative after delivery of the Deed to be effective shall
be so operative and shall not be deemed to have been merged in the
Deed.

     

    18. SUCCESSORS
AND ASSIGNS.  The terms, covenants and conditions herein
contained shall be binding upon and inure to the benefit of the successors and
assigns of the parties hereto.  This Agreement and all rights of Buyer
hereunder may be assigned or transferred by Buyer to any of its affiliates, in
which event all instruments, documents and agreements required to be delivered
to the Buyer hereunder shall be delivered to, and run for the benefit of such
entity, and such entity (rather than Buyer) shall execute and deliver any
instruments, documents or agreements required to be executed and delivered by
Buyer hereunder; provided, however, that in the event of any such assignment to
an affiliate, the original Buyer hereunder shall remain fully liable and
responsible for the performance of Buyer’s obligations, and for any indemnities
of Buyer hereunder.

     

    
      
        S-25

      

      
        
        

        
          

        

      

      
        
        

      

    

    19. NO THIRD
PARTY BENEFITS.  This Agreement is made for the sole benefit of
the Buyer and Seller and their respective successors and assigns, and no other
person shall have any right or remedy or other legal interest of any kind under
or by reason of this Agreement.

     

    20. COUNTERPARTS.  This
Agreement may be executed in multiple counterparts and shall be valid and
binding with the same force and effect as if all parties had executed the same
Agreement.

     

    21. ENTIRE
AGREEMENT.  This Agreement contains all of the covenants,
conditions and agreements between the parties and shall supersede all prior
correspondence, agreements and understandings, both verbal and
written.  The parties intend that this Agreement constitutes the
complete and exclusive statement of its terms and that no extrinsic evidence may
be introduced in any proceeding involving this Agreement.

     

    22. NOTICES.  All
notices required or permitted to be given pursuant to the terms hereof shall be
in writing and shall be delivered either by (a) certified mail, return receipt
requested, in which case notice shall be deemed delivered three (3) Working Days
after deposit, postage prepaid in the U.S. mail, (b) a reputable messenger
service or a nationally recognized overnight courier, in which case notice shall
be deemed delivered one (1) Working Day after deposit with such messenger or
courier, (c) facsimile or other telecopy transmission (followed with “hard copy”
sent by a nationally recognized overnight courier or mail as aforesaid), in
which case notice shall be deemed delivered when the facsimile or other telecopy
transmission is received (as evidenced by the sender’s electronic confirmation),
or (d) personal delivery with receipt acknowledged in writing, in which case
notice shall be deemed delivered when received. All such notices shall be
addressed to Buyer to the attention of Hossein Fateh at Buyer’s Address, with a
copy to Cooley Godward, One Freedom Square, Reston Town Center, 11951 Freedom
Drive, Reston, VA  20190-5601, Attn:  John Toole, Esq.,
Facsimile Number (703) 456-8100, to Seller at Seller’s Address, with a copy to
A. Nick Shamiyeh, Esq., Law Offices of A. Nick Shamiyeh, 2221 Olympic Boulevard,
Suite 100, Walnut Creek, CA  94595;
Telephone:  925-935-9401; Facsimile:  925-935-9407; and to
Escrow Holder at Escrow Holder’s Address.  The foregoing addresses may
be changed by written notice to the other party as provided herein.

     

    23. CONSTRUCTION
OF AGREEMENT.  In construing this Agreement, all headings and
titles are for the convenience of the parties only and shall not be considered a
part of this Agreement.  Whenever required by the context, the
singular shall include the plural and the masculine shall include the feminine
and vice versa.  This Agreement shall not be construed as if prepared
by one of the parties, but rather according to its fair meaning as a whole, as
if both parties had prepared it.  All Exhibits attached hereto are
incorporated in this Agreement by reference thereto.

     

    24. TIME.  Time
is of the essence of every provision herein contained.  Whenever the
date or deadline for any action to be taken is not a Working Day, the relevant
date or deadline shall be the next Working Day.

     

    
      
        S-26

      

      
        
        

        
          

        

      

      
        
        

      

    

    25. APPLICABLE
LAW.  This Agreement shall be governed by the internal laws of
the state in which the Real Property is located.

     

    26. NO ORAL
MODIFICATION OR WAIVER.  This Agreement may not be changed or
amended orally, but only by an agreement in writing.  No waiver shall
be effective hereunder unless given in writing, and waiver shall not be inferred
from any conduct of either party.

     

    27. MARKETING
OF PROPERTY.  Unless and until this Agreement is duly
terminated pursuant to the terms hereof, Seller shall not enter into any
negotiations, understandings or agreements with any party other than Buyer
relating to the sale, transfer or other disposition of the Property or any
portion thereof without a written disclosure and acknowledgement that such
negotiations, understandings or agreements are fully subordinate and subject to
the outcome of this Agreement (in other words, such negotiations, understandings
or agreements shall not be effective or binding unless this Agreement is validly
terminated in accordance with the provisions hereof) and Seller and the Broker
shall not offer the Property or any portion thereof for sale to any other party
without such written disclosure and acknowledgement.

     

    28. BROKERAGE
COMMISSION.  Buyer and Seller each represents and warrants to
the other that it has not dealt with any third party (other than Buyer's Broker)
in a manner which would obligate the other to pay any brokerage commission,
finder’s fee or other compensation due or payable with respect to the
transaction contemplated hereby other than a commission to be paid to Buyer's
Broker by Buyer at Closing, pursuant to a separate agreement.  Buyer
shall indemnify, defend, and hold Seller harmless from and against any losses,
damages, costs and expenses (including, but not limited to, attorneys’ fees and
costs) incurred by Seller by reason of any actual or alleged breach or
inaccuracy of the Buyer’s representations and warranties contained in this Section 28.  Seller
shall indemnify, defend, and hold Buyer harmless from and against any losses,
damages, costs and expenses (including, but not limited to, attorneys’ fees and
costs) incurred by Buyer by reason of any actual or alleged breach or inaccuracy
of Seller’s representations and warranties contained in this Section
28.  The provisions of this Section 28 shall
survive the Closing.

     

    29. INTENTIONALLY
DELETED.

     

    30. LIMITED
LIABILITY.  The
representations and warranties of Seller set forth in Section 12,
together with Seller's liability for any breach before Closing of any of
Seller's interim operating covenants under Section 15, will
survive the Closing for a period of six (6) months.  Buyer will not
have any right to bring any action against Seller as a result of any untruth or
inaccuracy of such representations and warranties, or any such breach, unless
and until the aggregate amount of all liability and losses arising out of any
such untruth or inaccuracy, or any such breach, exceeds $20,000.  In
addition, in no event will Seller's liability for all such breaches exceed, in
the aggregate, $100,000.  Seller shall have no liability with respect
to any of Seller's representations, warranties and covenants herein if, prior to
the Closing, Buyer has actual knowledge of any breach of a representation,
warranty or covenant of Seller herein, or Buyer obtains actual knowledge (from
whatever source, including, without limitation, any tenant estoppel
certificates, as a result of Buyer's Due Diligence or written disclosure by
Seller or Seller's agents and employees) that contradicts any of Seller's
representations and warranties herein, and Buyer nevertheless consummates the
transaction contemplated by this Agreement.  All other
representations, warranties, covenants and agreements made or undertaken by
Seller under this Agreement, unless otherwise specifically provided herein, will
not survive the Closing Date but will be merged into the Deed and other Closing
documents delivered at the Closing.  Notwithstanding the foregoing,
Seller acknowledges that potential post closing liability could exist with
respect to matters which survive the Closing or are contained in documents
delivered at Closing for the periods specified in this Agreement or
therein.

     

    

    
      
        S-27

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    31. CONFIDENTIALITY.  Prior to the
Closing Date, Seller and its representatives, legal counsel, engineers, and
other consultants, shall not disclose Buyer’s interest in the Property to any
third party without Buyer’s prior written consent, and Buyer shall not disclose
any other the terms of this Agreement except as necessary to its attorneys,
accountants, lenders or others related to the consummation of the transactions
contemplated hereunder, or except as required by Seller for compliance with
applicable laws or governmental regulations.

     

    32. LIKE-KIND
EXCHANGE.  Buyer and Seller
understand and acknowledge that a material inducement to the other party’s entry
into this Agreement is the right of each party (or constituent members of each
party) to structure the transaction contemplated by this Agreement so as to
qualify as a tax-free exchange of like-kind property in compliance with the
provisions of Section 1031 of the Internal Revenue Code (the “code”) (“Section
1031”).  Buyer and Seller agree to cooperate in all reasonable
respects (at no material out-of-pocket expense to the cooperating party) to
allow the other party (or constitute member) to structure the transaction
contemplated by this Agreement to effect a like-kind exchange in compliance with
the provisions of Section 1031 of the code and the Regulations promulgated
thereunder (the “Regulations”).  Accordingly, either party (or
constituent member) may enter into a written exchange agreement or assignment
agreement at any time prior to Closing with a “Qualified Intermediary” (as
defined in Section 1.1031(k)-1(g0(4)(iii) of the Regulations or an “Exchange
Accommodation Titleholder” (as defined in Revenue Procedure 2000-37) for the
assignment of the rights of that party under this Agreement to such “Qualified
Intermediary” or “Exchange Accommodation titleholder” (in either case, an
“Intermediary”).  An Intermediary shall be designated in writing by
the assigning party (the “Assigning Party”) to the other party (the “Other
Party”), and the Other Party hereby agrees that the Other Party shall sign and
deliver to the Assigning Party a written instrument (to be prepared by the
Assigning Party) solely acknowledging receipt of such written designation of the
Intermediary and of notice of such assignment of the right, title and interest
of the Assigning Party under this Agreement to the
Intermediary.  Notwithstanding any such assignment and assumption, the
Assigning Party shall not under any circumstances be released from its
obligations under this Agreement.

     

    

     

    [SIGNATURES
ON NEXT PAGE]

     

    

    
      
        S-28

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    IN
WITNESS WHEREOF, the parties hereto have executed one or more copies of this
Agreement as a sealed instrument the day and year first above
written.

     

    SELLER:                                           OWENS
MORTGAGE INVESTMENT FUND

     

    

     

    By: /s/ William C.
Owens

    Name: William C.
Owens

    Title: President, Owens Financial
Group, Inc.,

              General
Partner

    

    _________________________________

    

    

    

     

    
      	
               
      

            	
              BUYER:

            	
              DuPONT
      FABROS DEVELOPMENT LLC,

            

    

    
      	
               
      

            	
              a
      Delaware limited liability company

            

    

    

    

    By: /s/ Lammot J.
DuPont

    Name: Lammot J.
DuPont

    Title: Managing
Member

     

    

     

    [SIGNATURES
OF TITLE COMPANY AND ESCROW AGENT ON NEXT PAGE]

     

    
      
        
          
            	
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              TITLE

            

    

    
      	
               
      

            	
              COMPANY:

            	
              COMMERCIAL
      TITLE GROUP, INC.

            

    

    

    

    By: /s/ Barbara G.
Blitz

    Name: Barbara G.
Blitz

    Title: Vice
President

     

    

     

    

     

    

     

    
      	
               
      

            	
              ESCROW

            

    

    
      	
               
      

            	
              AGENT:

            	
              LANDAMERICA
      COMMERCIAL SERVICES

            

    

    

    

    

    By: /s/ Sherri
Keller

    Name: Sherri
Keller

    Title: Sr. Escrow
Officer

     

    

     

    

     

    

    

    
      
        
          
            	
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    EXHIBIT
A

     

    LEGAL DESCRIPTION OF THE
LAND

     

    That
certain 4.64 acres, two parcel tract of improved land including the building
thereon and all improvements known as (i) 556 Reed Street (1.23 acres) (Santa
Clara County APN# 230-04-002, and (ii) 1850 De La Cruz Boulevard (3.41 acres)
(Santa Clara County APN# 230-04-019), Santa Clara, California

     

    

    

    
      
        
          
            	
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    EXHIBIT
B

     

    DUE DILIGENCE
DOCUMENTS

     

    
      	
              1.  

            	
              A
      copy of the Seller’s full construction drawings and specifications for the
      Building and the improvements
therein;

            

    

     

    
      	
              2.  

            	
              A
      copy of Seller’s most recently completed “as-built” survey of the
      Property, showing replatted lot boundaries, access to the public and
      private streets, utility easements, designated wetlands, building
      dimensions, and building setbacks as specified in any recorded covenants
      or easements affecting the
property;

            

    

     

    
      	
              3.  

            	
              A
      copy of Seller’s title insurance policy, if one was obtained by Seller
      upon its purchase or refinance of the Property, together with copies of
      all Schedule “B” exception documents referenced therein, and of all
      recorded covenants or easement agreements and other agreements affecting
      or serving the property;

            

    

     

    
      	
              4.  

            	
              Copies
      of real estate tax bills for the last two (2) full calendar years and the
      proposed valuation for the current
year;

            

    

     

    
      	
              5.  

            	
              Copies
      of all reports (including internally prepared reports) in Seller’s
      possession regarding the structural or systemic condition of the Building,
      including the electrical, mechanical, life safety systems in the Building,
      ongoing and special maintenance issues at the Property, including any
      estimates for completed or contemplated physical repairs or modifications
      at the Property prepared by or for
Seller;

            

    

     

    
      	
              6.  

            	
              A
      copy of the Certificate of Occupancy for the Building and of any other
      certificates, permits or consents needed for the use and occupancy of the
      Building and of any zoning variances, rulings and opinions relating to the
      Property in Seller’s possession;

            

    

     

    
      	
              7.  

            	
              Copies
      of any notices of violations of law, regulations or orders in respect of
      the Property received by Seller, together with copies of any
      correspondence with respect
thereto;

            

    

     

    
      	
              8.  

            	
              Copies
      of all maintenance logs and records, service contracts and warranties for
      the Building, including the electrical, mechanical, and life safety
      systems in the Building;

            

    

     

    
      	
              9.  

            	
              Copies
      of all service and maintenance contracts in respect of the
      Property;

            

    

     

    
      	
              10.  

            	
              Copies
      of all agreements in respect of utilities, telecommunication services, and
      facilities serving the Property and of all invoices for utilities for the
      last two (2) full calendar years and the current
    year-to-date;

            

    

     

    
      	
              11.  

            	
              Copies
      of the operating expense reports for the Property for the last two (2)
      full calendar years and the current
  year-to-date;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              12.  

            	
              Copies
      of applicable zoning ordinances (or appropriate excerpts therefrom)
      showing the allowable uses and compliance requirements for the Property,
      including copies of any special use permits issued for the
      Property;

            

    

     

    
      	
              13.  

            	
              A
      description of any pending or threatened litigation affecting the
      Property; together with any assessments or reports prepared by or for
      Seller with respect thereto;

            

    

     

    
      	
              14.  

            	
              A
      list of any hazardous materials at the Property together with copies of
      all environmental reports regarding the Property or any adjacent areas in
      Seller’s possession or in the possession or any consultants retained by
      Seller.  In addition, Seller’s Environmental Consultant, Bruce
      Rucker of Stellar Environmental, shall be made available to discuss and
      share all environmental information on the property with Buyer’s
      Environmental Consultant;

            

    

     

    
      	
              15.  

            	
              Copies
      of any reports regarding flood plains, soil conditions or other physical
      conditions in respect of the Property or areas adjacent thereto in
      Seller’s possession or in the possession of any such
      consultants;

            

    

     

    
      	
              16.  

            	
              Copies
      of any ad valorem tax abatements agreements regarding the
      Property;

            

    

     

    
      	
              17.  

            	
              Copies
      of all pending and existing leases and other agreements with occupants of
      the Building together with and complete copies of all tenant files,
      including tenant correspondence, complaints, service requests, credit
      reports or other contents thereof;

            

    

     

    
      	
              18.  

            	
              An
      itemized list of any personal property to be included in the sale;
      and

            

    

     

    
      	
              19.  

            	
              Any
      historical evaluation reports of the Property, including that certain
      report dated April 2001.

            

    

     

    

    
      
        
          
            	
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    EXHIBIT
C

     

    FORM OF TENANT ESTOPPEL
CERTIFICATE

     

    ___________,
2007

     

    DuPont
Fabros Development LLC

    1212 New
York Avenue, Suite 900

    Washington,
D.C.  20005

    

    
      	
               
      

            	
              Re:

            	
              [Description
      of Lease]

            

    

     

    Ladies
and Gentlemen:

     

    The
undersigned, as Lessee, has been advised that the above described Lease may be
assigned to you or your successors and assigns (“Purchaser”) in connection with
the proposed sale of the Project and, as an inducement therefor, we hereby
certify to Purchaser and any prospective encumbrancers of the Project the
following:

     

    1. Lessee is
the tenant under the Lease and has unconditionally accepted possession of and
now occupies the Premises pursuant to the terms of the Lease.  The
Lease is in full force and effect and is the valid and binding obligation of
Lessee.

     

    2. All
improvements, alterations and space required to be furnished according to the
Lease have been completed to the satisfaction of Lessee, all sums required to be
paid by Lessor to Lessee in connection with the improvements (including, without
limitation, any tenant allowance or rebate) have been paid in full, and all
other conditions precedent to the commencement of the term of the Lease have
been satisfied.  The Premises comply with all warranties made by
Lessor in the Lease.

     

    3. As of the
date hereof, Lessor has performed all of its obligations under the Lease and
neither Lessee nor, to the best of Lessee’s knowledge, Lessor, is currently in
default under the Lease and, to the best of Lessee’s knowledge, no event has
occurred which with the giving of notice or passage of time would constitute
such a default.

     

    4. There
have been no representations or promises made by Lessor to Lessee except as set
forth in the Lease, and the Lease has not been modified, altered or amended (in
writing or orally) except as provided above.

     

    5. As of the
date hereof, there are no off-sets, defenses, counterclaims or credits against
rentals, nor have rentals been prepaid for more than one month in
advance.  Lessor has not agreed to assume the obligations of Lessee
under any other lease in connection with Lessee entering into the
Lease.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6. The Lease
commenced on ______.  The Lease term expires on ___________, and there
are no renewal or expansion options except as follows:
___________________.  Lessee has no purchase options or rights of
first refusal under the Lease with respect to the Project. Lessee has no
cancellation rights (except with respect to Lessor’s default) under the Lease
except as follows: ________________________.

     

    7. Lessee is
the legal and equitable owner and holder of the leasehold interest in the Lease
and Lessee has not assigned, transferred or encumbered its interest under the
Lease nor has Lessee sublet all or any portion of the Premises.

     

    8. As of the
date hereof, all rental and other payments due under the Lease are current and
the next rental payment is due on ________, 2007 in the amount of $_________.
There is no free rental, rebates or other concessions due to Lessee under the
Lease.

     

    9. Additional
rent for operating, maintenance, repair expenses, property taxes and assessments
and other such expenses and charges (collectively, the “Operating Expenses”) is
payable as provided in the Lease and has been paid in accordance with Landlord’s
rendered bills through _________.  Operating Expenses include a
management fee payable to Landlord or its manager. Tenant is required to pay
____% of all Operating Expenses.  The next payment of Operating
Expenses is due on ________, 2007 in the amount of $___________ for the month of
________, 2007.

     

    10. Lessor
holds a security deposit pursuant to the Lease in the amount of
$_________

     

    11. There are
no pending, or to Lessee’s best knowledge threatened, actions, voluntary or
involuntary, against Lessee under federal or state bankruptcy or insolvency
laws, except for:________________________.

     

    12. Lessee
agrees to attorn and to recognize Purchaser as Lessor under the Lease upon the
closing of the sale of the Project to Purchaser.

     

    13. This
letter shall inure to Purchaser’s benefit and to the benefit of Purchaser’s
successors and assigns and shall be binding upon Lessee and Lessee’s heirs,
personal representatives, successors and assigns.

     

    14. The
undersigned individual executing this letter on behalf of Lessee represents and
warrants that he or she is duly authorized to execute and deliver this letter on
Lessee’s behalf.

     

    15. The
address for notices to Lessee under the Lease is as follows:

     

    
 

     

    The above
statements are made with the understanding that Purchaser will rely on them in
connection with the above-mentioned acquisition.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Very
truly yours,

     

    

     

    

     

    

     

    
      
        
          
            	
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    EXHIBIT
D

     

    GRANT
DEED

     

    RECORDING
REQUESTED BY AND:

     

    WHEN
RECORDED MAIL TO:

     

    Cooley
Godward Kronish LLP

    Reston
Town Center

    11951
Freedom Drive

    Los
Angeles, California  90071

    Attn:  John
H. Toole, Esq.

    

    MAIL
TAX STATEMENTS TO:

     

    

     

    
       (Space
Above Line For Recorder’s Use Only)

       

      

    

    GRANT
DEED

     

    The
undersigned Grantor declares that documentary transfer tax is not shown pursuant
to Section 11932 of the Revenue and Taxation Code, as amended.

     

    W
I T N E S S E T H:

     

    THAT
____________________________ (“Grantor”), for the sum of
$10.00 and other good and valuable consideration paid to Grantor by Grantee
named below, the receipt of which is hereby acknowledged, does by these presents
GRANT to
___________________, a ________________ (“Grantee”), the lots, tracts,
or parcels of land lying, being, and situated in _______________ County,
California, more particularly described in Exhibit A
attached hereto and incorporated herein by reference, together with all of
Grantor’s right, title and interest in and to buildings, structures, and
improvements affixed thereto (the “Property”).

     

    TO HAVE
AND TO HOLD the Property with all rights, privileges, appurtenances, and
immunities thereto belonging or in any way appertaining unto the said Grantee
and unto Grantee’s successors and assigns forever.

     

    IN
WITNESS WHEREOF, the undersigned has executed this Grant Deed as of _______ ___,
2007.

     

    

    

    

    

    
      
        
          
            	
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    STATE OF
CALIFORNIA                                                                )

     

    ) ss.

     

    COUNTY
OF                                                      )

     

    On
________________, 2007, before me, ___________________________, a Notary Public,
personally appeared _______________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.

     

    WITNESS
my hand and official seal.

     

    

     

    Notary
Public

     

    [Affix
Notarial Seal]

     

    

    
      
        
          
            	
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    Exhibit
A

     

    LEGAL DESCRIPTION OF THE
LAND

     

    

     

    

    
      
        
          
            	
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    Exhibit
B

     

    PERMITTED
EXCEPTIONS

     

    [Attached]

     

    

    
      
        
          
            	
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    STATEMENT OF DOCUMENTARY
TRANSFER TAX

     

    _________,
2007

     

    Recorder’s
Office of

     

    ________
County, California

     

    In
accordance with Section 11932 of the California Revenue and Taxation Code,
the undersigned hereby requests that this statement of documentary transfer tax
not be recorded with the attached Grant Deed (the “Deed”) but be affixed to the
Deed after recordation and be returned as directed on the Deed.  The
Deed names_____________, as grantee.  The property that is the subject
of the Deed is located in the City of _____________, County of ___________,
State of California.

     

    The
documentary transfer tax amount, for the attached Deed is $________ computed on
the full value of the property less any encumbrances remaining on the
property.

     

    

     

    

     

    

     

    

    
      
        
          
            	
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    EXHIBIT
E

     

    BILL OF SALE AND
ASSIGNMENT

     

    FOR
VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, effective as of the Closing Date, ________________________________
(“Seller”), does hereby
bargain, sell, grant, assign, transfer, set over and deliver unto
_______________  (“Buyer”), without
representation or warranty of any kind or nature, all of Seller’s right, title
and interest in and to all of the Personal Property and the Intangible
Property.

     

    Seller
shall, at any time and from time to time, upon the request of Buyer, execute,
acknowledge and deliver all such further acts, deeds, assignments, transfers,
conveyances and assurances, and take all such further actions, as shall be
necessary or desirable to give effect to the transactions hereby consummated and
to collect and reduce to the possession of Buyer any and all of the interests
and assets hereby transferred to Buyer.

     

    As used
herein, all initially capitalized terms not defined herein shall have the
meanings assigned to such terms in that certain Purchase and Sale Agreement and
Escrow Instructions dated as of _____________, between Buyer and Seller (the
“Purchase
Agreement”).

     

    IN
WITNESS WHEREOF, Seller has executed this Bill of Sale and Assignment as of
Closing Date.

     

    

     

    

     

    

     

    

    
      
        
          
            	
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    EXHIBIT
F

     

    ASSIGNMENT AND ASSUMPTION OF
LEASES

     

    FOR
VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, effective as of the Closing Date (as hereinafter defined),
__________________ (“Assignor”), does hereby
assign, sell, transfer, set over and deliver to ___________ (“Assignee”), all of the
landlord’s right, title and interest in and to the leases more particularly
described on Exhibit
A attached hereto and incorporated herein, all of which are in full force
and effect (the “Leases”), together with all
guaranties of the Leases and all unapplied security deposits, prepaid rentals,
unapplied cleaning fees and other unapplied deposits paid or deposited by any
tenant thereunder to Assignor, as landlord, or any other person on Assignor’s
behalf pursuant to the Leases (together with any interest which has accrued for
the account of the respective tenant).  The Leases affect the real
property described on Exhibit B attached
hereto and made a part hereof (the “Real Property”).

     

    Assignee
hereby accepts the foregoing assignment and assumes and agrees to perform and
observe all of the obligations, covenants, terms and conditions to be performed
or observed by Assignor under the Leases arising from and after the Closing
Date.

     

    Assignor
hereby acknowledges that Assignor has retained, and Assignee shall not assume,
have any right under, or be responsible for, any of the obligations, covenants,
terms and conditions of the Leases, with respect to obligations to be performed
or observed by the landlord thereunder arising at any time prior to the Closing
Date or rights accruing to landlord prior to the Closing Date.

     

    With
respect to any claim asserted for a period of six (6) months following the
delivery of this Assignment, Assignor hereby agrees to protect, defend,
indemnify Assignee and its successors, assigns, affiliates, directors, officers,
employees and partners of any of them, and hold each of them harmless from any
and all claims, liabilities, damages, and penalties and any and all loss, cost,
or expense (including, without limitation, reasonable attorneys’ fees and costs
and court costs) incurred by Assignee incident to, resulting from, or in any way
arising out of any failure by Assignor to perform and observe the obligations,
covenants, terms and conditions retained by Assignor
hereunder.  Assignee hereby agrees to protect, defend, indemnify
Assignor and its successors, assigns, affiliates, directors, officers,
employees, members, trustees, beneficiaries, and partners of any of them and
hold each of them harmless from any and all claims, liabilities, damages, and
penalties and any and all loss, costs, or expense (including, without
limitation, reasonable attorneys’ fees and costs and court costs) incurred by
the Assignor incident to, resulting from, or in any way arising out of any
failure by Assignee to perform and observe the obligations, covenants, terms and
conditions assumed by Assignee hereunder; provided, however, that to the extent
Assignor has delivered tenant security deposits to Assignee and complied with
applicable California law, Assignor shall have no further liability for the
return of such delivered tenant security deposits.  Each of the
parties hereto further agrees, upon notice from the other, to contest any
demand, claim, suit, or action against which each party has hereinabove agreed
to indemnify and hold the other and all such other parties harmless, and to
defend any action that may be brought in connection with any such demand, claim,
suit, or action, or with respect to which each party has hereinabove agreed to
hold the other and all such other parties harmless, and to bear all costs and
expenses of such contest and defense.  The indemnities set forth
herein shall be deemed to be material and shall survive the Closing
Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Assignor
and Assignee shall, at any time and from time to time, upon the reasonable
request of the other, execute, acknowledge and deliver all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney and assurances,
and take all such further actions, as shall be necessary or desirable to give
effect to the transactions hereby consummated and to collect and reduce to the
possession of Assignee any and all of the interests and assets hereby
transferred to Assignee.

     

    As used
herein, “Closing Date”
shall have the meaning assigned to that term in that certain Purchase and Sale
Agreement and Escrow Instructions dated as of ______________, between Assignor
and Assignee.

     

    This
Assignment and Assumption of Leases may be executed in counterparts with the
same effect as if all parties hereto had executed the same
document.  All counterparts shall be construed together and shall
constitute a single Assignment and Assumption of Leases.

     

    

     

    

    
      
        
          
            	
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    IN
WITNESS WHEREOF, this Assignment and Assumption of Leases has been executed by
Assignor and Assignee and is effective as of the Closing Date.

     

    
      	
              ASSIGNOR:

            	
              ASSIGNEE:

            
	 
      	 
      
	 
      	 
      

    

    

    
      
        
          
            	
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    Exhibit
A

     

    Leases

     

    

    
      
        
          
            	
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    Exhibit
B

     

    Legal
Description

     

    

     

    

    
      
        
          
            	
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    EXHIBIT
G

     

    ASSIGNMENT AND ASSUMPTION OF
CONTRACTS

     

    [NONE.]

     

    
      
        
          
            	
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    EXHIBIT
H

     

    SELLER'S
AFFIDAVIT

     

    

     

    

    Title
order No. __________

    

    The
undersigned hereby certifies as follows:

    

    
      	
              1.

            	
              To
      the actual knowledge of the undersigned, there are no unrecorded leases or
      agreements affecting the premises, or other parties in possession, except
      as shown on attached Exhibit A; the
      leases contain no options to purchase or rights of first offer to purchase
      the premises.

            

    

    

    (Exhibit A attached __X__
Yes     _____ No)

    

    
      	
              2.

            	
              To
      the actual knowledge of the undersigned, there has not been any
      construction, repairs, alterations or improvements made, ordered or
      contracted to be made on or to the premises, nor materials ordered
      therefor within the last six months which has not been paid for; nor are
      there any fixtures attached to the premises which have not been paid for
      in full; that there are no outstanding or disputed claims for any such
      work or item; and that there have not been any improvements erected upon
      the property during the current year subject to any taxes for the current
      year which may hereafter be assessed or levied by virtue of new
      construction completed or partially completed during the current year
      except as shown on attached Exhibit
      B.

            

    

    

    (Exhibit B attached _____
Yes     ___X__ No)

    

    This
affidavit is made for the purpose of aiding Commonwealth Title Insurance Company
in determining the insurability of title to the property, and to induce said
Company to issue its policies of title insurance on or about the date
hereof.

    

    EXECUTED
this _____ day of __________, 2007

    

    

    _________________________

    

    Address:

    Phone:

    

     

    

     

    
      
        
          
            	
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    EXHIBIT
I

     

    FIRPTA
AFFIDAVIT

     

    THE STATE
OF
CALIFORNIA                                                                           §

     

    §

     

    COUNTY OF
__________________                                                                           §

     

    Section
1445 of the Internal Revenue Code and Sections 18662, 18668 and 18669 of the
California Revenue and Taxation Code provide that a transferee of a U.S. real
property interest must withhold tax if the transferor is a foreign
person.  To inform _________________ (“Transferee”), that withholding
of tax is not required upon the disposition of a U.S. real property interest by
________________________________ (“Transferor”), the undersigned
hereby certifies as follows:

     

    
      	
               
      

            	
              1.

            	
              Transferor
      is not a foreign corporation, foreign partnership, foreign trust or
      foreign estate (as those terms are defined in the Internal Revenue Code
      and Income Tax Regulations and the California Revenue and Taxation
      Code);

            

    

     

    
      	
               
      

            	
              2.

            	
              Transferor’s
      U.S. employer identification number is
    ____________________;

            

    

     

    
      	
               
      

            	
              3.

            	
              Transferor’s
      office address is
  _______________________________________.

            

    

     

    Transferor
understands that this certification may be disclosed to the Internal Revenue
Service and the California Franchise Tax Board by the Transferee and that any
false statement contained herein could be punished by fine, imprisonment, or
both.

     

    Under
penalties of perjury, the undersigned, in the capacity set forth below, hereby
declares that it has examined this certification and to the best of its
knowledge and belief it is true, correct, and complete, and the undersigned
further declares that it has authority to sign this document in such
capacity.

     

    EXECUTED
to be effective as of the ____ day of ______, 2007.

     

    

     

    

     

    

     

    
      
        
          
            	
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    EXHIBIT
J

     

    DISCLOSURE
ITEMS

     

    
      
        
          
            	
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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]