Document:

f8k0210ex10i_envision.htm

    Exhibit 10.1

    Selling
Agreement

    January
17, 2007

    

     

    Mr.
Robert Noble

    Chairman
& Chief Executive Officer 

    Envision
Solar, LLC 

    225
Broadway Avenue, Suite 1700 

    San
Diego, CA 92101

    

     

    Re:     Common Stock Offering at
$10.00 per Share

     

    Gentlemen:

     

    Envision
Solar, LLC ("ENVISION" or "the Company") is a California Limited Liability
Company formed to provide durable and attractive integrative photovoltaic
systems designed to facilitate the worldwide transition to the use of renewable
energy. ENVISION desires to raise $2,000,000 through the sale of 200,000 Shares
("The Shares") to Accredited Investors ("Investor") at a price of $10.00 per
Share pursuant to Rule 506 of the Securities Act of 1933. Each Investor
participating in this Offering is required to purchase a minimum of 5,000
shares; however, ENVISION may choose to accept purchases below the minimum at
its discretion. ENVISION hereby confirms as follows its agreement with Nexcore
Capital, Inc. ("Nexcore"), a registered member in good standing of the National
Association of Securities Dealers ("NASD"), under which Nexcore will act as a
non-exclusive agent for ENVISION in connection with the Offering of the
Shares.

     

    1. Memorandum.   ENVISION is
authorizing the preparation of a private placement memorandum ("Memorandum")
relating to the sale of the Shares.

     

    2. Appointment
of Agent. On the
basis of the representations, warranties and covenants herein contained, and
subject to the terms and conditions herein set forth, Nexcore is hereby
appointed as a non-exclusive agent of ENVISION to offer and sell the Shares to
Accredited Investors. Nexcore covenants to offer and sell Shares on a "best
efforts" basis on behalf of ENVISION in accordance with the terms of this
Agreement and the Memorandum, and not to misrepresent orally or in writing any
of the facts regarding ENVISION, its business, or the Offering. Nexcore
covenants to closely supervise all of its representatives in the Offering of the
Shares and to comply with all applicable federal and state securities laws and
NASD rules and regulations. Nexcore is not responsible for the contents of the
Memorandum. Nexcore covenants not to use any written material or oral statements
in offering or selling the Shares which are not specifically authorized by
ENVISION, provided, that Nexcore is specifically authorized to use the
Memorandum. Subject to the performance by ENVISION of its obligations to be
performed hereunder, and to the accuracy of all the representations and
warranties contained herein, Nexcore hereby accepts such agency and agrees to
perform its obligations hereunder.

    

    3. Representations
and Warranties of Envision. ENVISION represents,
warrants and agrees with Nexcore for Nexcore's benefit that:

     

    (a)           All
action required to be taken by ENVISION as a condition to sale of the Shares
has been
taken.

     

    (b)           ENVISION
is duly and validly organized, existing and in good standing as a limited
liability company under the laws of the State of California, with full power and
authority to conduct
its business and proposed business as described in the Memorandum. ENVISION has
unencumbered
title to all government licenses and permits necessary to conduct its business,
and is duly qualified to conduct its business in all jurisdictions in which such
qualification is necessary or appropriate.

    

    
      
        SeUing\agmt\Envisioa.doc

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) From the
commencement of the Offering period through the Offering Termination Date, as
that term is defined in the Memorandum, the Memorandum will not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.

     

    (d) This
Agreement has been duly and validly authorized, executed and delivered by or on
behalf of ENVISION, and constitutes the valid, binding and enforceable agreement
of ENVISION.

     

    (e) No
federal or state securities agency has issued an order preventing or suspending
the Offering or the use of the Memorandum with respect to the sale of the
Shares. ENVISION will promptly notify Nexcore upon the issuance of any such
order and furnish Nexcore with a copy thereof. The Memorandum and any amendment
or supplement thereto will comply and will continue to comply with all
applicable requirements of the Securities Act of 1933, as amended (the "Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any
other applicable federal and state laws and regulations at all times during the
term of this Agreement.

     

    (f) No
consent, approval, authorization or other order of any governmental authority is
required in connection with the execution, delivery or performance by ENVISION
of this Agreement.

     

    (g) The
execution and delivery of this Agreement will not constitute a breach of, or
default under, any instrument by which ENVISION is bound or, to the best of
their knowledge, any order, rule or regulation of any court or any governmental
body or administrative agency having jurisdiction over ENVISION.

    

    4. Nexcore
Representations and Warranties. Nexcore represents and
warrants that it is duly and fully licensed under the rules and regulations of
the NASD and is capable of performing and satisfying its obligations under this
Agreement. Nexcore further represents and warrants that Nexcore's execution and
performance of this Agreement will not cause Nexcore to be in default under or
to violate any agreement, law, rule, regulation, order or judgment applicable to
it.

     

    5. Compensation
to Nexcore. In
consideration for Nexcore's services hereunder, ENVISION covenants to pay
Nexcore a selling commission equal to ten (10%) percent of the total purchase
price of Shares sold by representatives who are registered with Nexcore. The
selling commission payable to Nexcore will be paid periodically as ENVISION
accepts sales of Shares. In those cases where the investor is an institution,
and the size of the investment is greater than $500,000 (i.e. exceeds 100,000
shares), ENVISION and Nexcore agree that ENVISION shall pay Nexcore a reduced
selling commission of four percent (4%) on these institutional
sales.

     

    6. Due
Diligence Allowance. In consideration for due
diligence expenses incurred by Nexcore in connection with the Offering, ENVISION
covenants to pay Nexcore a due diligence fee equal to three percent (3%) of the
total purchase price of Shares sold by representatives who are registered with
Nexcore. In those cases where the investor is an institution, and the size of
the investment is greater than $500,000 (i.e. exceeds 100,000 shares), ENVISION
and Nexcore agree that ENVISION shall pay Nexcore a reduced due diligence fee of
two percent (2%) on these institutional sales. The due diligence allowance will
be paid periodically as ENVISION accepts sales of Shares.

    

    7. Incentive
Compensation and Offering Costs. In consideration for
other expenses incurred by Nexcore in connection with the Offering, including
but not limited to administrative and miscellaneous
expenses, Nexcore will also receive from ENVISION a nonaccountable expense
reimbursement in cash equal to two percent (2%) of the total purchase price of
all Shares sold by representatives who are registered with Nexcore. In addition,
as non-cash incentive compensation for Nexcore, ENVISION shall also compensate
Nexcore with fully-paid, non-accessible, and assignable common Shares of the
Company equal to ten percent (10%) of the total number of Shares sold in this
Offering, subject to a maximum of 20,000 Shares, and based upon the 200,000
Shares offered in the Memorandum.

    

    
      
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    8. Offering
Costs. ENVISION
will pay all legal, accounting, printing and other Offering expenses incurred by
the Company from its existing general working capital.

     

    9. Covenants
of the Company.
ENVISION covenants with Nexcore that:

     

    (a) The term
of this Agreement will commence on the date first above written and will
terminate on the Offering Termination Date of April 30, 2007, as defined in the
Memorandum, unless sooner terminated by the written agreement of both parties to
this Agreement.

     

    (b) If any
event relating to the Company occurs which requires, in the opinion of
ENVISION's counsel, an amendment or supplement to the Memorandum in order that
the Memorandum will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a subscriber, ENVISION will forthwith prepare the amendment or
supplement to the Memorandum and deliver a copy thereof to Nexcore. Furthermore,
ENVISION will furnish such information to Nexcore as Nexcore may from time to
time reasonably request.

     

    (c) ENVISION
will endeavor in good faith to qualify the Shares for offering and sale under,
or to establish the exemption of the Offering and sale of the Shares from
qualification or registration under, applicable state securities or "blue sky"
laws. ENVISION will pay all legal fees and related expenses in connection with
qualifying the Shares under said "blue sky" laws.

     

    (d) ENVISION
will not offer to sell Shares in any state in which such offer would be
unlawful. ENVISION will bear all of the costs and liability incurred by it or
Nexcore as a result of the unlawful offer of Shares by the Company in any state,
unless Nexcore directly causes such unlawful offer without the participation of
ENVISION.

     

    (e) ENVISION
covenants to issue financial statements and reports of the Company in accordance
with the Memorandum.

     

    (f) Nexcore
will have reasonable review and approval rights with respect to the Memorandum
and its contents.

     

    (g) ENVISION
covenants that Nexcore shall retain the right to offer this opportunity to an
entity affiliated with Nexcore, such as, by way of illustration but not of
limitation, The Greencore Private Energy Fund, etc.

     

    10. Payment
of Expenses and Fees.
Except as provided in Sections 5, 6 and 7 of this Agreement, Nexcore and
ENVISION will each pay their own expenses incident to the transactions
contemplated by this Agreement. ENVISION will bear all of the fees and expenses
incurred in printing of the Memorandum.

     

    11. Mutual
Non-circumvention.
ENVISION and Nexcore covenant not to directly or indirectly circumvent
the other parry or its affiliates with respect to any relationships introduced
or made known to each party as a direct or indirect result of this Agreement,
including but not limited to investors, customers,
suppliers, and professionals, without the prior consent of the other party. In
the event of a breach of this section by either party, each party will have all
injunctive and equitable relief available, as well as all other remedies at law
or in equity.

     

    
      
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    12. Conditions
of Nexcore's Obligations. Nexcore's obligations
hereunder are subject to the accuracy of and compliance with the representations
and warranties of ENVISION in this Agreement, and to the performance by ENVISION
of its obligations hereunder.

     

    13. Conditions
of the Obligations of Envision. The obligations of ENVISION
hereunder are subject to the accuracy of and the compliance with Nexcore's
representations and warranties in this Agreement, and to the performance by
Nexcore of its obligations hereunder.

     

    14. Term of
Agreement. The
term of this Agreement will commence on the date first above written and will
terminate on the Offering Termination Date, as that term is defined in the
Memorandum.

     

    15.Indemnification.

     

    (a) ENVISION
hereby indemnifies and holds Nexcore, Nexcore's affiliates, officers, directors,
shareholders, agents, employees, accountants and attorneys, and each of them,
harmless from and against all liabilities, claims, damages, losses, costs,
attorneys fees and expenses arising directly or indirectly from (a) the conduct
of ENVISION's business, (b) the manner and conduct of any offer or sale of
securities by persons or entities other than Nexcore which conduct any business
with ENVISION, (c) any financial statements or other financial information
prepared, provided, published, or disseminated by ENVISION, or (d) the source or
manner of solicitation of any prospective Investors referred by ENVISION to
Nexcore. In addition, ENVISION hereby indemnifies and holds Nexcore, Nexcore's
affiliates, officers, directors, shareholders, agents, employees, consultants
and attorneys, and each of them, harmless from and against any loss, expense,
claim, damage or liability to which Nexcore or said other parties may become
subject under any securities act, common law concept, or otherwise, insofar as
such loss, expense, claim, damage or liability or action in respect thereof,
arises out of or is based in whole or in part on any untrue statement or alleged
untrue statement of any material fact made by ENVISION, any employee of the
Company, or in the Memorandum, or the omission thereby of any material fact
required to be stated or necessary to make the statement made to a prospective
investor not misleading. ENVISION shall promptly reimburse the indemnified
parties for any reasonable legal or other expenses incurred by them in
connection with any such indemnified action or claim.

     

    (b) ENVISION
will not be liable under this indemnity agreement with respect to any claim made
against Nexcore or any of said other persons related to Nexcore unless ENVISION
is notified in writing of the nature of the claim. ENVISION shall be entitled to
participate at its own expense in the defense or, if it so elects within a
reasonable time after receipt of such notice, to assume the defense of any such
claims, which defense shall be conducted by counsel chosen by it and reasonably
satisfactory to Nexcore and the other said person or persons related to Nexcore
who are defendants in any suit so brought. In the event that the ENVISION elects
to assume the defense of any such suit and retain such counsel, Nexcore or the
person or persons who are defendants in the suit shall bear the fees and
expenses of any additional counsel thereafter retained by Nexcore or them.
ENVISION agrees to promptly notify Nexcore of the assertion of any claim against
it or against any person who is a control person of ENVISION in connection with
the sale of the Shares.

     

    (c) Nexcore
agrees to indemnify and hold harmless ENVISION and its affiliates, officers,
directors, shareholders, agents, employees, attorneys and accountants against
any and all loss, liability, claim, damage and expense whatsoever directly or
indirectly resulting from material violations by Nexcore or its representatives
of any of Nexcore's representations, warranties or covenants in this Agreement,
or of any applicable law, rule or regulation. In case any action is brought
against ENVISION or any of its affiliates under such laws, regulations or rules
on account of such material violation of such representations, warranties or
covenants, Nexcore shall have the rights and duties given to ENVISION, and
ENVISION shall have the rights and duties given to Nexcore, by the provisions of
Section 13(b).

     

    
      
        SeIling\agmt\Envi3i0n.doc

      

      
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    16.Representations.  Warranties  and  Agreements  to  Survive  Delivery.     All
representations,
warranties and agreements shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of Nexcore or any person
who controls Nexcore, or by or on behalf of ENVISION or any person who controls
ENVISION, for a period of four years after the Offering Termination Date, as
that term is defined in the Memorandum.

     

    17. Notices. All communications herein
shall be in writing and, if sent to Nexcore, shall be mailed, delivered or
telegraphed and confirmed to Nexcore at 10509 Vista Sorrento Parkway, Suite 300,
San Diego, CA 92121, attention: Jay S. Potter, President, or, if sent to
ENVISION, shall be delivered or telegraphed and confirmed to it at Envision
Solar, LLC, 225 Broadway Avenue, Suite 1700, San Diego, California 92101,
attention: Robert Noble, Chief Executive Officer.

     

    18. Parties. This Agreement shall inure
to the benefit of and be binding upon Nexcore, ENVISION, and their respective
successors and assigns.

     

    19. Entire
Agreement. This
Agreement represents the entire agreement among the parties hereto and may not
be amended except by a writing signed by the party against whom enforcement of
the provision is sought.

     

    20. Injunctive
Relief.

     

    20.1  Damages
Inadequate

     

    Each
parry acknowledges that it would be impossible to measure in money the damages
to the other party if there is a failure to comply with any covenants or
provisions of this Agreement, and agrees that in the event of any breach of any
covenant or provision, the other party to this Agreement will not have an
adequate remedy at law.

     

    20.2           Injunctive
Relief

     

    It is
therefore agreed that the other party to this Agreement who is entitled to the
benefit of the covenants or provisions of this Agreement which have been
breached, in addition to any other rights or remedies which they may have, shall
be entitled to immediate injunctive relief to enforce such covenants and
provisions, and that in the event that any such action or proceeding is brought
in equity to enforce them, the defaulting or breaching party will not urge a
defense that there is an adequate remedy at law.

     

    21. Waivers. If any party shall at any
time waive any rights hereunder resulting from any breach by the other party of
any of the provisions of this Agreement, such waiver is not to be construed as a
continuing waiver of other breaches of the same or other provisions of this
Agreement. Resort to any remedies referred to herein shall not be construed as a
waiver of any other rights and remedies to which such party is entitled under
this Agreement or otherwise.

     

    22. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, and the venue for any action hereunder shall be in the
appropriate forum in the County of San Diego, State of California.

     

    23. Counterparts. This Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

     

    24. Attorneys'
Fees and Costs.
In the event that either parry must resort to legal action in order to
enforce the provisions of this Agreement or to defend such action, the
prevailing party shall be entitled to receive reimbursement from the
nonprevailing party for all reasonable attorneys' fees and all other costs
incurred in commencing or defending such action, or in enforcing this Agreement,
including but not limited to post judgment costs.

     

    
      
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    25. Further
Acts. The parties
to this Agreement hereby agree to execute any other documents and take any
further actions which are reasonably necessary or appropriate in order to
implement the transactions contemplated by this Agreement.

     

    26. Time of
Essence. Time is
of the essence in the performance of the obligations under this
Agreement.

     

    27. Authorized
Signatures. Each
party to this Agreement hereby represents that the persons signing below are
duly authorized to execute this Agreement on behalf of their respective
party.

     

    28. Execution. If the foregoing is in
accordance with your understanding of our Agreement, kindly sign and return to
us a counterpart hereof, whereupon this Agreement along with all counterparts
will become a binding Agreement between Nexcore and ENVISION in accordance with
its terms.

    

    Very truly
yours,

    
 

    
      
        	 	Nexcore Capital,
      Inc.	 
	 	a
      Delaware corporation	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	Jay
      S. Potter President	 
	 	 	Title 	 
	 	 	 	 

      

     

     

     

    Confirmed
and Accepted:

    

     

    Envision
Solar, LLC

    a
California Limited Liability Compnay

     

    
    

     

    
      	
              By:
      

            	/s/ 
      Robert Noble	 
	 	Robert
    Noble	 
	 	Chairman and Chief
      Executive Officer	 

    

     

     

     

     

     

    
      
        Sel)ing\agmt\Envision.doc

      

      
        6f8k0210ex10ii_envision.htm

    Exhibit
10.2

     

     

    
      

      

    

     

     

    2007

     

    
      UNIT
OPTION PLAN

       

      OF

       

      ENVISION
SOLAR, LLC

       

      A
California limited liability company

      
 

       

       

       

      
        

        

      

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

    

    TABLE OF
CONTENTS

    
    

     

     

    
      
        	
                ARTICLE
      1

              	
                Purpose;
      Definition of Company and Other Terms

              	
                1

              
	
                    1.1

              	
                Purpose

              	
                1

              
	
                    1.2

              	
                Definition
      of Company; Subsidiary

              	
                1

              
	
                    1.3

              	
                Terminology

              	
                1

              
	 
      	 
      	 
      
	
                ARTICLE
      2

              	
                Units
      Awards Under the Plan

              	
                2

              
	
                    2.1

              	
                Type
      of Awards 

              	
                2

              
	
                    2.2 

              	
                Unexercised
      Units

              	
                2

              
	 
      	 
      	 
      
	
                ARTICLE
      3

              	
                Eligibility   

              	
                2

              
	 
      	 
      	 
      
	
                ARTICLE
      4

              	
                Administration 

              	
                3

              
	
                    4.1 

              	
                The
      Board of Managers

              	
                3

              
	
                    4.2

              	
                Authority
      of the Board 

              	
                3

              
	
                    4.3 

              	
                Effectuation
      of Plan by Company 

              	
                3

              
	 
      	 
      	 
      
	
                ARTICLE
      5

              	
                Grant
      of Options

              	
                4

              
	
                    5.1

              	
                Option
      Agreements 

              	
                4

              
	
                    5.2

              	
                Option
      Date 

              	
                4

              
	
                    5.3

              	
                Acknowledgments
      and Warranties in Option Agreements

              	
                4

              
	 
      	 
      	 
      
	
                ARTICLE
      6

              	
                Terms
      and Conditions for Options

              	
                4

              
	
                    6.1

              	
                Employment
      by the Company

              	
                4

              
	
                    6.2 

              	
                Option
      Price

              	
                5

              
	
                    6.3 

              	
                Price
      Determination

              	
                5

              
	
                    6.4 

              	
                Exercise
      of Option; Payment for Units 

              	
                5

              
	
                    6.5

              	
                Term
      of Options; Option Period

              	
                5

              
	
                    6.6

              	
                Option
      Exercise Period

              	
                5

              
	
                    6.7

              	
                Non-Transferability
      of Options

              	
                5

              
	
                    6.8

              	
                Limitations
      on Exercise; Termination of Employment 

              	
                6

              
	
                    6.9 

              	
                Accumulation
      Rights

              	
                6

              
	
                    6.10

              	
                Minimum
      Unit Purchase

              	
                6

              
	
                    6.11  

              	
                Employee
      Holding Period 

              	
                6

              
	
                    6.12 

              	
                Retirement
      of Employee

              	
                6

              
	
                    6.13 

              	
                Death
      of Optionee

              	
                6

              
	
                    6.14 

              	
                Disability
      of Employee

              	
                7

              
	
                    6.15  

              	
                Options
      of Employee not Exercisable at Termination

              	
                7

              
	
                    6.16 

              	
                Failure
      of Retired, Deceased or Disabled Optionee to Exercise
    Option

              	
                7

              
	
                    6.17 

              	
                Repurchase
      Agreements 

              	
                7

              
	
                    6.18   

              	
                Withholding
      Taxes

              	
                7

              

      

    

     

     

     

    
    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE OF
CONTENTS

    (continued)

     

    
      
        	
                ARTICLE
      7 

              	
                Time
      Limit on Granting of Options

              	
                7

              
	 
      	 
      	 
      
	
                ARTICLE
      8

              	
                Adjustments
      by Reason of Recapitalization, Stock Split-Ups, Etc8

              	
                8

              
	
                    8.1

              	
                Effect
      of Options on Company’s Rights 

              	
                8

              
	
                    8.2  

              	
                Recapitalization

              	
                8

              
	
                    8.3 

              	
                Reorganization

              	
                8

              
	
                    8.4 

              	
                Price
      Adjustment

              	
                9

              
	 
      	 
      	 
      
	
                ARTICLE
      9 

              	
                Transfer
      of Control 

              	
                9

              
	
                    9.1

              	
                Definitions

              	
                9

              
	
                    9.2

              	
                Effect
      of Transfer of Control on Options

              	
                10

              
	 
      	 
      	 
      
	
                ARTICLE
      10 

              	
                Right
      to Amend, Suspend or Terminate the Plan

              	
                10

              
	 
      	 
      	 
      
	
                ARTICLE
      11 

              	
                No
      Obligation to Exercise Option

              	
                10

              
	 
      	 
      	 
      
	
                ARTICLE
      12

              	
                Modification,
      Extension and Renewal and Cancellation of Options

              	
                10

              
	 
      	 
      	 
      
	
                ARTICLE
      13

              	
                Compliance
      With Laws

              	
                10

              
	
                    13.1  

              	
                Securities
      Laws 

              	
                10

              
	
                    13.2  

              	
                Liability
      of Company; Compliance With Law

              	
                11

              
	 
      	 
      	 
      
	
                ARTICLE
      14   

              	
                Provisions
      in Option Agreements 

              	
                11

              
	 
      	 
      	 
      
	
                ARTICLE
      15

              	
                Indemnification
      of the Board

              	
                11

              
	 
      	 
      	 
      
	
                ARTICLE
      16  

              	
                General
      Provisions 

              	
                12

              
	
                    16.1

              	
                Governing
      Law

              	
                12

              
	
                    16.2 

              	
                Effective
      Date of the Plan 

              	
                12

              

      

    

     

        

     

     

    
    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2007

    UNIT
OPTION PLAN

    OF

    ENVISION
SOLAR LLC

    

     

    ARTICLE
1

     

    PURPOSE; DEFINITION OF
COMPANY AND OTHER TERMS

     

    1.1 Purpose.  The purpose of
this Unit Option Plan (“Plan”) is to aid in maintaining and developing
management and employees for Envision Solar, LLC, a California limited liability
company (the “Company”), intended to advance the long range interests and
performance of the Company.  The Plan will afford present and future
executives, other employees, and independent contractors an opportunity to
secure a unit ownership in the Company through the grant of unit options (as
defined herein) which are referred to herein as
“Options”.  Executives, employees and independent contractors will
thus be encouraged to acquire a permanent stake in the prosperity of the
Company.  The Plan will also permit the Company to compete with other
organizations offering similar plans in obtaining and retaining the services of
executives and other key personnel whom the Company desires to
employ.  Since a Plan participant may be required to remain in the
services of the Company in order to obtain its full benefits, the Plan is also
an inducement to participants to remain with the Company.

     

    1.2 Definition
of Company; Subsidiary.  The word
“Company,” when used in the Plan with reference to employment or where otherwise
applicable, shall include a “parent corporation” and/or a “subsidiary
corporation” of the Company as those terms are respectively defined in Sections
424(e) and 424(f) of the Internal Revenue Code of 1986, as amended (the
“Code”).

     

    1.3 Terminology.  If the context so
requires, all personal pronouns used in this Plan, whether used in the
masculine, feminine, or neuter gender, shall include all other genders, and the
singular shall include the plural, and vice versa.  Titles of sections
and subsections are for convenience only, and shall neither limit nor amplify
the provisions of the Plan itself, and all references herein to sections or
subsections shall refer to the corresponding section or subsection of this Plan,
unless specific reference is made to such sections or subsections of another
document or instrument. All capitalized terms not otherwise defined herein shall
have the meaning given to them in the Operating Agreement of the Company
effective as of August 15, 2006 (“Operating Agreement”).

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    ARTICLE
2

     

    UNITS  AWARDS UNDER THE
PLAN

     

    2.1 Type of
Awards.  The units to be
sold pursuant to the exercise of Options granted under this Plan shall be the
membership units of the Company (“Units”).  The total number of Units
which may be purchased pursuant to the exercise of Options granted under this
Plan shall not, except as provided in Article 8 or upon approval of the members,
exceed 100,000 Units.  No reduction in the number of outstanding Units
shall affect the validity or enforceability of options granted prior to the
reduction.

     

    2.2 Unexercised
Units.  In the event that
an Option granted under the Plan expires, is canceled, or is terminated
unexercised as to any Units subject thereto, such Units subject to the
unexercised portion of such Option may again be subject to an Option granted
under this Plan.

     

    ARTICLE
3

     

    

    ELIGIBILITY

     

    Options will be granted from time to
time under the Plan only to:

    

    3.1  
Employees
of the Company (including managers and assistant managers), all of whom are
referred to herein as “Employees”;

     

    3.2  
Members
of the Board of Managers of the Company (“Managers”), whether or not employees
of the Company; and

     

    3.3  
Certain
persons or organizations who are independent contractors, who have substantial
business contacts with the Company which would give rise to familiarity with the
business and financial aspects of the Company, and who render to the Company
services of special importance to the Company in the management, operation or
development of its business.

     

    Any grantee may hold more than one
Option, but only on the terms and subject to the restrictions contained
herein.  Such Employees, Managers and independent contractors
(collectively referred to herein as “Participants” or “Optionees”) will be
selected from time to time during the period when the Plan is in operation by
the Board of Managers (the “Board”) which will also determine the number of
Units which each Participant shall be entitled to purchase under his
Option.

    
      
        
           

          113969.000000/720966.01

        

         

      

      
        2

        
          

        

      

      
         

      

    

    ARTICLE
4

     

    ADMINISTRATION

     

    4.1 The Board
of Managers.  The Plan shall be
administered by the Board elected by the members of the Company as described in
the Company Operating Agreement; provided, however, that no Manager of the Board
shall vote upon or approve the granting of any Option to such
Manager.

     

    4.2 Authority
of the Board.  Subject to the
express provisions of the Plan, the Board shall have the sole authority, in its
absolute discretion, to:

     

    4.2.1  
Determine
and designate from time to time which Employees, Managers, and independent
contractors to whom Options to purchase Units shall be granted;

     

    4.2.2  
Determine
the number of Units to be subject to Options (sometimes “Option Units”) granted
hereunder (subject, however, to the limitations specified in Section 2.1 and
Article 8), and the time or times when such Options shall be
granted;

     

    4.2.3  
Determine
the option or exercise price of the Option Units (subject, however, to the
limitations specified in Section 6.2);

     

    4.2.4  
Determine
the time or times when each Option becomes exercisable, and the duration of the
exercise period (subject to Sections 6.5 and 6.6);

     

    4.2.5  
Prescribe,
amend and rescind the form or forms of the Option Agreements (as defined in
Section 5.1) under the Plan (which shall be consistent with the Plan but need
not be identical);

     

    4.2.6  
Adopt,
amend, and rescind such rules and regulations as in its opinion may be advisable
in the administration of the Plan (subject, however, to the limitations
specified in Article 10);

     

    4.2.7  
Construe
and interpret the Plan, the rules and regulations and the Option Agreements
under the Plan, and make all other determinations deemed necessary or advisable
for the administration of the Plan; and

     

    4.2.8  
Place
such restrictions on sale or other disposition of the Units purchased upon
exercise of an Option as may be determined by the Board.

     

    All
decisions, determinations, and interpretations by the Board of the terms of the
Plan, and the agreements and other instruments created pursuant to the Plan,
made in good faith shall be final, binding, and conclusive on all Optionees for
all purposes.

    

    4.3 Effectuation
of Plan by Company.  The Company shall
effect the grant of Options under the Plan to Employees, Managers, and
independent contractors of the Company in accordance with the determinations
made by the Board, by the execution of agreements with Optionees, and any other
necessary instruments in writing, in form approved by the Board and conforming
to the provisions of the Plan.  The Board shall, from time to time,
authorize and direct the issuance and sale of Units of the Company pursuant to
such Options as and when the same may be exercised, in whole or in part, in
accordance with their respective terms.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    ARTICLE
5

     

    

    GRANT OF
OPTIONS

     

    5.1 Option
Agreements.  Upon the Board’s
determination to grant an Option to an Optionee, the Board shall promptly advise
the Optionee of its action, the number of Units subject to the Option so granted
and the price to be paid for the Units upon exercise of the
Option.  Within a reasonable period of time from the date of the grant
of such Option the Optionee shall enter into an agreement for the grant of such
Option in such form as the Board determines which complies with the terms and
conditions of this Plan (“Option Agreement”).  In the event action
taken by the Board is by written consent of its Managers, the action or approval
of the Board shall be deemed to be taken at the time the last executing Manager
signs the consent unless such action specifies a later time.

     

    5.2 Option
Date.  Unless otherwise
specified in an Option Agreement, the date of grant or “Option Date” of any
Option shall be deemed to be the date on which the grant of such Option shall be
approved by the Board or such other date as the Board shall, at the time of such
approval, fix as the date of grant thereof.

     

    5.3 Acknowledgments
and Warranties in Option Agreements.  As a condition to
the exercise of the Option, the Optionee may be required in said Option
Agreement to acknowledge and agree that:

     

    5.3.1  
The
Optionee will, from time to time, notify the Company in writing of each
disposition (including a sale, exchange, gift, or a transfer of legal title) of
Units acquired pursuant to the exercise of an Option made by such
Optionee.  Such notification shall be in writing and shall be made
within fifteen (15) days after each such disposition is made.

     

    5.3.2  
The
Optionee and his transferees have no rights as a Unit holder with respect to any
Units covered by the Plan until the date of the issuance of a Unit certificate
to him for such Units.  No adjustment shall be made for distributions
(whether in cash, securities or other property) or other rights for which the
record date is prior to the date such Unit certificate is issued, except as
provided in Article 8.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    ARTICLE
6

     

    

     

    TERMS AND CONDITIONS FOR
OPTIONS

     

    6.1 Employment
by the Company.  Nothing contained
in the Plan or in any Option granted pursuant to the Plan shall confer upon any
Optionee any right to continue in the employment of the Company, or interfere in
any way with the right of the Company to terminate his employment at any time,
with or without cause.

     

    6.2 Option
Price.  Each Option
granted pursuant to the Plan shall have a stated exercise or Option price for
each Unit subject to the Option, which price shall be not less than the fair
market value per Unit on the Option Date, as determined by the Board in good
faith.

     

    6.3 Price
Determination.  In making its
Option price determination, the Board may use any reasonable valuation method,
taking into consideration prices at which Units of the Company have been
recently sold and purchased, and other relevant factors as determined by the
Board.

     

    6.4 Exercise
of Option; Payment for Units. Units may be purchased
pursuant to an Option granted under the Plan only upon receipt by the Company of
notice in writing from the Optionee of his intention to purchase and upon such
other terms as may be required by his Option Agreement.  Upon the
date(s) specified for the completion of the purchase of his Units, Optionee,
shall pay the Company in United States Dollars the full purchase price of the
Units purchased; provided however, that, at the discretion of the Board, the
Optionee may allow (i) a delay in payment up to thirty days from the date the
Option, or portion thereof, is exercised; (ii) payment, in whole or in part,
through the surrender of Option Units then issuable upon exercise of the Option;
(iii) payment, in whole or in part, by the delivery by Optionee to the Company
of a promissory note in the form approved by the Company; (iv) payment, in
whole or in part, through delivery of property of any kind which constitutes
good and valuable consideration; or any method of “cashless exercise” permitted
by the Board and approved by Company’s counsel.

     

    6.5 Term of
Options; Option Period.  Each Option
granted pursuant to this Plan shall have a term of not more than ten (10) years
from the Option Date (the “Option Period”).

     

    6.6 Option
Exercise Period.  Each Optionee to
whom an Option has been granted shall have the right to purchase Units, at any
time, or from time to time, during the Option Period in accordance with the
vesting schedule and other terms of his Option Agreement.  Each Option
Agreement which includes a vesting schedule shall set out the maximum percentage
or number of Units which such Optionee may purchase in any installment
period.

     

    6.6.1  
An
Employee Optionee shall be credited with a full year of continuous employment by
the Company during the Option Period only on an anniversary date of his Option
Date, and only if on such anniversary date he is and has been continuously
employed by the Company since the Option Date.

     

    6.6.2  
Absence
of an Employee Optionee on duly granted leave or due to sickness for a period of
not more than ninety (90) days shall not be deemed to be an interruption of the
continuity of his employment for purposes of this Plan.

     

    6.7 Non-Transferability
of Options.  No Option shall
be transferable by the Optionee other than by will or, if he dies intestate, by
the laws of descent and distribution of the state of his domicile at the time of
his death.  All Options shall be exercisable during an Optionee’s
lifetime only by such Optionee.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    6.8 Limitations
on Exercise; Termination of Employment.  Subject to the
provisions of this Plan, the exercise of Options may be limited in whole or in
part for any period or periods of time as specified in each Option Agreement,
and any Option may be exercised to the extent it is exercisable in whole at any
time, or in part from time to time, during the Option Period (as defined in
Section 6.5); provided, however, that:

     

    6.8.1 If the
Board determines that the Optionee has committed an act materially adverse to
the interests of the Company, all of the Optionee’s rights to purchase Units not
yet purchasable pursuant to his Option (i.e. non-vested options) shall cease and
terminate as of the date of such act; and

     

    6.8.2 Except as
provided in Sections 6.12, 6.13 and 6.14 below, no Option granted to an Employee
may be exercised more than ninety (90) days after such Optionee’s employment or
service with the Company has been terminated for any reason, and within such
ninety (90) day period said Optionee may exercise his Option only to the extent
the same was exercisable on his date of termination.  If during said
ninety (90) day period the Optionee shall die, his executors, administrators,
legatees or distributees, shall have an additional period ending six (6) months
from the date of death within which to exercise the Option.  The Board
shall determine what constitutes termination of employment, including whether an
authorized leave of absence, or absence for military or governmental service
constitutes termination of employment for purposes of the Plan, which
determination shall be final and conclusive.

     

    6.9 Accumulation
Rights.  Unless otherwise
provided in an Option Agreement, to the extent Option Units are not exercised in
any installment period, such Option Units shall accumulate and be exercisable in
whole or in part in any subsequent installment period.

     

    6.10 Minimum
Unit Purchase.  Each Option
Agreement shall provide that not less than a certain number of Units (e.g., 100
Units) may be purchased at any one time, unless the Units purchased are the
total number purchasable at the time.

     

    6.11 Employee
Holding Period.  Except to the
extent specifically waived by the Company in the Option Agreement reflecting an
Option granted under this Plan, each Employee to whom an Option is granted under
the Plan shall, as consideration therefor and as a condition of its grant,
remain in the continuous employ of the Company for at least one year from the
date of grant before he may exercise any part of the Option.

     

    6.12 Retirement
of Employee.  In the event of
an Employee’s retirement, such Employee’s Option (if granted to him as an
Employee) may be exercised by him at any time within the period ending with the
earlier of the expiration date of his Option or ninety (90) days after the date
of his retirement, to the extent it was exercisable on the date of his
retirement.

     

    6.13 Death of
Optionee.  Upon the
termination of employment by the death of an Optionee, the executor or
administrator of his estate, or the person to whom his Option shall have been
transferred pursuant to his will or the laws of descent and distribution may,
within the period ending with the earlier of the expiration date of his Option
or one (1) year from the date of the Optionee’s death, exercise the Employee’s
Option to the extent it was exercisable on his date of death.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    6.14 Disability
of Employee.  In the event of
the termination of his employment by the Company due to the Disability (within
the meaning of Section 22(e)(3) of the Code) of an Optionee who was granted his
Option as an Employee, the disabled Optionee (or a legal representative who is a
mere custodian of the Optionee’s property, stands in a fiduciary relationship to
such Optionee, and is subject to court supervision) may, within the earlier of
the period ending with the expiration date of his Option or one (1) year after
the termination of the Optionee’s employment with the Company, exercise said
Option to the extent it was exercisable on the date of said termination of
employment.

     

    6.15 Options
of Employee not Exercisable at Termination.  Notwithstanding
anything herein to the contrary, no Option granted to an Employee which is not
exercisable at the termination of such Participant’s employment with the Company
shall thereafter become exercisable, regardless of the reason for such
termination.

     

    6.16 Failure
of Retired, Deceased or Disabled Optionee to Exercise Option.  To the extent
that any Option of a retired, deceased, or disabled Optionee, who was granted
his Option as an Employee, is not exercised within the limited periods specified
in Sections 6.12, 6.13 and 6.15, all further rights to purchase Units pursuant
to such Option shall cease and terminate as of the expiration of such
period.

     

    6.17 Repurchase
Agreements.  As a condition
precedent to the Optionee’s right to receive any Option granted pursuant to this
Plan, the Board may require the Optionee to execute a document containing right
of first refusal and/or repurchase provisions providing the Company the right to
repurchase Option Units under certain circumstances. All of the Option Units
shall be, and are deemed to be, subject to all the restrictions, terms,
covenants, and conditions set forth in any such repurchase
agreement.

     

    6.18 Withholding
Taxes.  Whenever Units
are to be issued under the Plan, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to satisfy federal,
state, and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Units.

     

    ARTICLE
7

     

    TIME LIMIT ON GRANTING OF
OPTIONS

     

    No Options may be granted under the
Plan subsequent to ten (10) years after the date this Plan became effective
(“Expiration Date”).  Any Option outstanding under the Plan at the
time of its ter­mination shall remain in effect until it shall have been
exercised, or shall have expired or otherwise terminated pursuant to the
provisions of this Plan.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    ARTICLE
8

     

    ADJUSTMENTS BY REASON
OFRECAPITALIZATION, UNIT SPLITS, ETC

     

    8.1 Effect of
Options on Company’s Rights.  The grant of an
Option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations, or changes
of its capital or business structure, or to merge, or to consolidate, or to
dissolve, liquidate, sell, or transfer all or any part of its business or
assets.  Except as expressly provided in this Article, an Optionee
shall  have no other rights by reason of any subdivision or
consolidation of Units or the payment of any distributions or any other increase
or decrease in the number of Units or by reason of any dissolution, liquidation,
merger or consolidation or spin-off of assets or equity of another
company.  Any issue by the Company of Units or securities convertible
into Units shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of Units subject to any
Option.

     

    8.2 Recapitalization.  In the event
there are splits, subdivisions, combinations or reclassifications of the Units
of the Company subsequent to the effective date of this Plan, the number of
Units reserved for issuance pursuant to the Plan, including the Units issuable
upon the exercise of outstanding Options, shall be increased or decreased
proportionately, as the case may be, to appropriately reflect such
event.

     

    8.3 Reorganization.

     

    8.3.1 In case
the Company is merged or consolidated with another corporation and the Company
is the surviving entity, each outstanding Option, whether or not then
exercisable, shall pertain to and apply to the securities to which a holder of
the number the Option Units subject to such Option would have been
entitled.

     

    8.3.2 Subject
to any required action by the Company’s Unit holders, in the case the Company is
merged or consolidated with another corporation and the Company is not the
surviving entity, or in case the property or Units of the Company are acquired
by another corporation, or in case of a separation, reorganization, or
liquidation of the Company, the Board, or the board of directors or managers of
any corporation assuming the obligations of the Company hereunder, shall, in its
sole discretion as to each outstanding Option, either:  (a) make
appropriate provision for protection of such Option by the substitution on an
equitable basis of appropriate equity of the Company, or of the merged,
consolidated or otherwise reorganized corporation which will be issuable in
respect to the equity of the Company, provided only that the excess of the
aggregate fair market value of the equity subject to such Option immediately
after such substitution over the purchase price thereof is substantially the
same as, but in no event more than, the excess of the aggregate fair market
value of the Option Units subject to such Option immediately before such
substitution over the purchase price thereof; (b) upon written notice to the
holder of such Option, provide that such Option must be exercised within a
specified period not exceeding sixty (60) days of the date of such notice to the
extent such Option is exercisable on the last day of such specified period or it
will be terminated; or (c) provide that any or all Options which are not yet
exercisable shall be exercisable upon such further terms and conditions as may
be prescribed and which are not otherwise inconsistent with the Option Agreement
and this Plan.  Any portion of such Option which is not exercisable on
the last day of any period specified pursuant to clause (b) in the preceding
sentence shall terminate, and any portion of such Option which is not exercised
on or before said last day shall terminate on said last day.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    8.4 Price
Adjustment.  If, after the
granting of an Option to any Optionee hereunder, a substitution or an adjustment
shall be required to be made under this Article 8 in the number or kind of Units
or other securities then subject to such Option, the price per Unit payable by
the Optionee for Units or securities which he may thereafter be entitled to
purchase under such Option shall be concurrently adjusted so that the aggregate
purchase price of all Units or securities not theretofore purchased under such
Option will be apportioned ratably and equitably to and among the substituted or
adjusted number or kind of Units or other securities.

     

    ARTICLE
9

     

    TRANSFER OF
CONTROL

     

    9.1 Definitions.                       For the purposes of this
Article 9, the following terms shall have the following meanings:

     

    9.1.1 An
“Ownership Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company:

     

    
       

      
        	(i) 	               
    	The direct or indirect sale or exchange in a single or
      series of related transactions by the Unit holders of the Company of more
      than eighty percent (80%) of the Units of the Company;
	 	 	 
	(ii) 	                	A merger or consolidation in which the Company is a
    party;
	 	 	 
	(iii) 	              
    	The sale, exchange, or transfer of all or substantially
      all of the assets of the Company; or
	 	 	 
	(iv) 	              
    	A liquidation or dissolution of the
Company.

      

        

    

    9.1.2 A
“Transfer of Control” shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, the “Transaction”) wherein the
Unit holders of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same proportions as
their ownership of Units of the Company immediately before the Transaction,
direct or indirect beneficial ownership of more than eighty percent (80%) of the
total combined voting power of the outstanding Units of the Company or the
corporation or corporations to which the assets of the Company were transferred
(the “Transferee Corporations(s)”), as the case may be. For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the
Transferee Corporation(s), as the case may be, either directly or through one or
more subsidiary corporations. The Board shall have the right to determine
whether multiple sales or exchanges of the Units of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    9.2 Effect of
Transfer of Control on Options.  In the event of a
Transfer of Control, this Option shall terminate. If this Option would otherwise
terminate pursuant to the foregoing sentence, Optionee shall have the right, at
such time prior to the consummation of the transaction causing such termination
as the Company shall designate, to exercise any vested
unexercised  portions of this Option.

     

    ARTICLE
10

     

    RIGHT TO AMEND, SUSPEND OR
TERMINATE THE PLAN

     

    The Board shall have the right to
amend, suspend or terminate the Plan at any time, provided, however, that no
such action shall affect or in any way impair the rights of an Optionee under
any Option theretofore granted under the Plan without the consent of the
Optionee or the transferee of the Option, and provided further that no such
action, without approval of the Company’s Unit holders, may: (a) increase the
total number of Units which may be sold or transferred pursuant to Options
granted under the Plan, except as permitted pursuant to Article 8; (b) change
the designation of class of persons eligible to participate in the Plan; (c)
decrease the minimum Option price specified in Article 6; (d) extend the maximum
term of Options granted hereunder; or (e) extend the term of the
Plan.

    

    ARTICLE
11

     

    

     

    NO OBLIGATION TO EXERCISE
OPTION

     

    The granting of an Option shall impose
no obligation on the recipient to exercise such Option.

    ARTICLE
12

     

    

     

    MODIFICATION, EXTENSION
ANDRENEWAL AND CANCELLATION OF OPTIONS

     

    Subject to the terms and conditions and
within the limitations of the Plan, the Board may (i) modify, extend or renew
outstanding Options granted under the Plan, (ii) accept the surrender or
cancellation of outstanding Options (to the extent not theretofore exercised),
and (iii) authorize the granting of new Options in substitution therefor (to the
extent not theretofore exercised).  Notwithstanding the foregoing,
however, no modification of an Option shall, without the consent of the
Optionee, alter or impair any rights or obligations under any such Option
theretofore granted under the Plan.

    

    ARTICLE
13

     

    

     

    COMPLIANCE WITH
LAWS

     

    13.1 Securities
Laws.  Each Option under
the Plan shall be granted on such terms and conditions, including investment
intent, as are deemed advisable by the Board in order to comply with applicable
federal, state, and local securities laws, rules, and regulations.  No
Options shall be granted, and no Units shall be sold or issued upon the exercise
of any Option, unless and until the issuance, as determined by the Board,
complies with any then applicable requirements of the Securities and Exchange
Commission, the California Commissioner of Corporations, other regulatory
agencies having jurisdiction thereof and any securities exchanges upon which
securities of the Company may be listed.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    13.2 Liability
of Company; Compliance With Law.  The Company and
the Managers of the Board shall be relieved from any liability for the
non-issuance or non-transfer, or any delay of issuance or transfer, of any Units
subject to Options under the Plan which results from the inability of the
Company to comply with, or to obtain, or from any delay in obtaining from any
regulatory body having jurisdiction, all requisite authority to issue or
transfer Units upon exercise of the Options under the Plan, if counsel for the
Company deems such authority reasonably necessary for lawful issuance or
transfer of any such Units.  Appropriate legends may be placed on the
Unit certificates evidencing Units issued upon exercise of Options to reflect
such transfer restrictions.

     

    ARTICLE
14

     

    PROVISIONS IN OPTION
AGREEMENTS

     

    The Option Agreements authorized under
this Plan shall contain such other provisions, including, without limitation,
conditions and restrictions upon the exercise of the Option and/or upon the sale
or other disposition of the Units purchased upon the exercise of an Option, as
the Board shall deem advisable in its absolute discretion (and which may be more
restrictive as to the Optionee than those herein); provided, however, that such
provisions shall be consistent with the terms and conditions set forth
herein.

    

    ARTICLE
15

     

    INDEMNIFICATION OF
THE
BOARD

     

    In addition to such other rights of
indemnification as they may have as Managers of the Board shall be indemnified
by the Company against the reasonable expenses, including attorneys’ fees
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in the connection with any appeal therein, to which they
or any of them may be a party by reason of any action taken or failure to act
under or in connection with this Plan or agreements made hereunder, and against
all amounts paid by them in settlement thereof or in satisfaction of a judgment
therefor, provided such settlement is approved by independent legal counsel
selected by the Company, except in relation to matters as to which it shall be
adjudged in such action, suit, or proceeding that such Manager is liable for
gross negligence or willful misconduct in the performance of his duties;
provided further that within sixty (60) days after institution of any such
action, suit, or proceeding such Manager shall, in writing, offer the Company
the opportunity, at its own expense, to handle and defend the same.

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    ARTICLE
16

     

    GENERAL
PROVISIONS

     

    16.1 Governing
Law.      This Plan shall be
governed by the laws of the State of California.

     

    16.2 Effective
Date of the Plan.    The Plan became
effective when approved by the Board.

     

    

    Approved
by the Board of Managers on:  July ___, 2007.

     

     

     

     

     

     

    12

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