Operating Agreement of

_____________________________, LLC A. THIS OPERATING AGREEMENT is entered into as of __________, 2009 by __________________________________________ (hereinafter referred to as Member). B. The Member has formed a limited liability company under the Beverly-Killea Limited Liability Company Act. The Articles of Organization of the Company, filed with the California Secretary of State on __________________, are hereby adopted and approved by the Member. C. The Member enters into this Agreement to provide for the governance of the Company and the conduct of its business, and to specify their relative rights and obligations. NOW THEREFORE, the Member agrees as follows: 1 NAME 1.1 The name of the Company is: _______________________________, LLC 1.2 The Articles of Organization were filed with the California Secretary of State on _________________, File Number ___________________. A copy of the Articles of Organization as filed is attached to this Agreement as Exhibit A. 2 DEFINITIONS

Capitalized terms used in this Agreement have the meanings specified in this Article or elsewhere in this Agreement and when not so defined shall have the meanings set forth in California Corporations Code section 17001. 2.1 Act means the Beverly-Killea Limited Liability Company Act California Corporations Code 17000-17705), including amendments from time to time. 2.2 Agreement or Operating Agreement means this operating agreement, as originally executed and as amended from time to time. 2.3 Articles of Organization is defined in Corporations Code section 17001(b), as applied to this Company. 2.4 Assignee means a Member who by means of a Transfer has received an Economic Interest in the Company. 2.5 Assigning Member means a Member who by means of a Transfer has transferred an Economic Interest in the Company to an Assignee.

4599726_1

2.6 Code or IRC means the Internal Revenue Code of 1986, as amended, and any successor provision. 2.7 Company. 2.8 Company means 204 West Main Street, LLC, a California Limited Liability Corporations Code (Corp C) means the California Corporations Code.

2.9 Economic Interest means a Persons right to share in the income, gains, losses, deductions, credit or similar items of, and to receive distributions from, the Company, but does not include any other rights of a Member, including the right to vote or to participate in management. 2.10 Encumber means the act of creating or purporting to create an Encumbrance, whether or not perfected under applicable law. 2.11 Encumbrance means, with respect to any Membership Interest, or any element thereof, a mortgage, pledge, security interest, lien, proxy coupled with an interest (other than as contemplated in this Agreement), option, or preferential right to purchase. 2.12 Family Member means, with respect to any Member who is an individual, that persons lineal descendants and spouse. 2.13 Agreement. Initial Member means the Member set forth in the first sentence of this

2.14 Interest Holder means the holder of any interest in the Company upon the transfer of a Membership Interest without the transferee being admitted to the Company as a Member. 2.15 Involuntary Transfer means, with respect to any Membership Interest, or any element thereof, any Transfer or Encumbrance, whether by operation of law, pursuant to court order, foreclosure of a security interest, execution of a judgment or other legal process, or otherwise, including a purported transfer to or from a trustee in bankruptcy, receiver, or assignee for the benefit of creditors. 2.16 Majority of Members means a Member or Members whose Percentage Interests represent more than Fifty percent (50 %) of the Percentage Interests of all the Members. 2.17 Majority of Voting Interests means more than Fifty percent (50%) of the Voting Interests in the Company. 2.18 Manager or Managers means the Person or Persons listed in Section 6.1 hereof and any such other Person who may be appointed as a Manager of the Company. 2.19 Member means the Initial Member or a Person who otherwise acquires a Membership Interest, as permitted under this Agreement, and who remains a Member.
4599726_1

2.20 Membership Interest or Members Interest means the respective right of a Member or an Assignee to an allocated share, expressed as a percentage of the economic benefits of the Company, including net profits, net losses, and distributions. A Members Membership Interest shall be equal to that percentage determined by dividing the total number of Units owned by the Member by the total Units owned by all Members. 2.21 Net Losses means the net loss of the Company, computed in accordance with Code Section 703, applied consistently with prior periods. 2.22 Net Profits means the net income of the Company, computed in accordance with Code Section 703, applied consistently with prior periods. 2.23 Percent of the Members means the specified total of Percentage Interests of all the Members. 2.24 Percent Interest means a fraction, expressed as a percentage, the numerator of which is the total of a Members Capital Account and the denominator of which is the total of all Capital Accounts of all Members. 2.25 Permitted Transfer and Permitted Transferee have the meanings set forth in Section 13.5 hereof. 2.26 Person means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity, whether domestic or foreign. 2.27 Proxy has the meaning set forth in the first paragraph of Corp C 17001(a)(i). A Proxy may not be transmitted orally. 2.28 Regulations (Reg) means the income tax regulations promulgated by the United States Department of the Treasury and published in the Federal Register for the purpose of interpreting and applying the provisions of the Code, as such Regulations may be amended from time to time, including corresponding provisions of applicable successor regulations. 2.29 Representative will mean the executor or administrator of a deceased Members probate estate in the case of Units subject to probate administration, the successor trustee of any trust holding Units or any other qualified representative of a Member, whether by virtue of court administration, pursuant to Power of Attorney or otherwise. 2.30 Substituted Members means an Interest Holder who has been admitted to the Company as a Member by the unanimous consent of the existing Members in favor of the Interest Holders admission to the Company as a Member. 2.31 Successor in Interest means an Interest Holder, or Assignee who is a successor of a Person by merger or otherwise by operation of law, or a transferee of all or substantially all of the business or assets of a Person. 2.32 Company.
4599726_1

Tax Item means each item of income, gain, loss, deduction, or credit of the 3

2.33 Tax Matters Member means the party designated pursuant to the Code to receive all notices from the Internal Revenue Service which pertain to the tax affairs of the Company and referred to in the Code as the Tax Matters Partner. 2.34 Transfer means, with respect to a Membership Interest or any element of a Membership Interest, any sale, assignment, gift, Involuntary Transfer, Encumbrance, or other disposition of such a Membership Interest or any element of such Membership Interest, directly or indirectly, other than an Encumbrance that is expressly permitted under this Agreement. 2.35 Transferee means a third person or entity to whom a Transferring Member sells, transfers, encumbers, assigns or otherwise disposes of all or any part of the Members Interest in the Company. 2.36 Transferring Member means a Member who voluntarily sells, transfers, encumbers, assigns, or otherwise disposes of all or any part of the Members Interest in the Company to any third person or entity. 2.37 2.38 2.39 vote. 2.40 Voting Interest or Voting Interests means with respect to a Member, the right to Vote or participate in management and any right to information concerning the business and affairs of the Company provided under the Act, except as limited by the provisions of this Agreement. A Members Voting Interest shall be directly proportional to that Members Percentage Interest. 3 PRINCIPAL OFFICE/REGISTERED OFFICE Triggering Event is defined in Article 13, Section 13.7. Unit shall mean the representative measurement of ownership in the Company. Vote means a written consent or approval, a ballot cast at a meeting, or a voice

3.1 Principal Office. The principal executive office of the Company shall be at ____ ____________________________________ or such other place or places as may be determined by the Members from time to time. 3.2 Registered Agents Office. The initial agent for service of process on the Company shall be __________________________ whose address is ______________________, CA ________________. A majority of Members may from time to time change the Companys agent for service of process. 4 PURPOSE AND POWERS

4.1 Purpose. The purpose of the Company is to engage in any lawful activity for which a limited liability company may be organized under the Act. More specifically, the Company shall initially engage in the following: the business of holding, managing, renting and selling real estate and performing all acts which may be necessary to further the companys business.
4599726_1

4.2 Powers. The Member intends the Company to be a limited liability company under the Act, to have all the powers granted to a limited liability company under the Act and to be classified as a disregarded entity so long as the Initial Member is the sole Member or there is otherwise a single Member of the Company and to be classified as a partnership if there are multiple members of the Company, for federal and, to the maximum extent possible, state income tax purposes. The Members shall not take any action inconsistent with the express intent of the parties to this Agreement. 5 TERM

The term of existence of the Company shall commence on the effective date of filing of Articles of Organization with the California Secretary of State and shall continue until terminated by the provisions of this Agreement or as provided by law. 6 MANAGEMENT

6.1 Managers. The Company will be managed by a Board of Managers. The authorized number of Managers of this Company will not be less than ONE (1) nor more than THREE (3) until changed, within the limits specified herein, by a resolution amending such exact number duly adopted by the Members as provided in Section 6.2 hereof. The initial number of Managers will be one (1), namely: JEFFREY L. TAYLOR 6.2 Election and Term of Managers. The Manager designated in Section 6.1 shall remain the Manager until death, resignation or until removed by the Members pursuant to the provisions of this Agreement. 6.3 Removal. Any Manager may be removed from office without cause by the unanimous affirmative vote of the Members. 6.4 General Obligations. The Managers will cause to be filed original or amended documents and will take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited-liability company under the laws of the State of California and any other states or jurisdictions in which the Company engages in business and, if required by law, will execute and cause to be recorded appropriate original or amended documents in each county in each such other state in which the Company owns real property. Unless the Code or Regulations require otherwise, the Initial Member will serve as the Tax Matters Member. 6.5 General Authority. Subject to the provisions of Section 6.9, the Manager will have complete and exclusive control over the management of the business and affairs of the Company. If there is more than one Manager, the rights and powers of the Managers will be exercised among them as they may agree among themselves, but in the absence of such an agreement or in the event of deadlock or other lack of decision pursuant to such other agreement, they will be bound by the unanimous vote of the Managers then in office.

4599726_1

6.6 Scope of Duties. The Managers will not be required to devote their full time to the business or affairs of the Company but will devote the time reasonably necessary to perform the duties of the Managers under this Agreement and to prudently manage and operate the Companys business and properties. 6.7 Limitation of Liability and Indemnification of Managers.

6.7.1 The Managers will not be liable for the return of any contribution of capital of any Member or for any profits thereon, and any return of capital and profits will be made, if at all, solely from the assets and business of the Company. 6.7.2 Except as otherwise provided herein, the Managers will not be liable to the Company or the Members or other Interest Holders for any act or omission in connection with the business or affairs of the Company so long as the Manager against whom liability is asserted acted in good faith on behalf of the Company and in a manner reasonably believed by the Manager to be within the scope of authority under this Agreement and in the best interests of the Company, unless such act or omission constitutes gross negligence, intentional misconduct, fraud or a knowing violation of law. 6.7.3 In the event there is more than one Manager at the time any alleged liability arises under this Agreement or in favor of any Member or other Interest Holder against the Managers, the liability of each Manager will be joint and several. Multiple Managers will have the right separately to agree upon indemnification and contribution obligations among themselves. 6.7.4 The Company or its successor, trustee or receiver will indemnify, defend and hold harmless the Managers against all claims, demands, actions, losses, liabilities, damages, costs and expenses, which after the date of this Agreement arise out of the Company or its business or affairs, including reasonable attorneys fees incurred in defending all such matters. However, this indemnification will apply only if the Manager against whom a claim, action or demand is asserted has acted in good faith on behalf of the Company and in a manner reasonably believed by the Manager to be within the scope of authority under this Agreement and in the best interests of the Company, and only if the act or omission underlying the claim, action or demand did not constitute gross negligence, intentional misconduct, fraud or a knowing violation of law. 6.7.5 The satisfaction of the indemnification obligations of the Company under this Section 6.7 will be from and limited to the assets of the Company, and no Member or other Interest Holder will have any personal liability for satisfaction of any such indemnity obligations. In the event that a final determination by a court of competent jurisdiction is made that the Company is not obligated in respect of any amount previously paid by it to or on behalf of any Manager, the Manager will refund that amount within thirty (30) days of the final determination. 6.8 Binding Authority: The signatures of each Manager will be required to bind the Company to any agreement or on any document or instrument. 6.9 Vote Restrictions on Manager Authority. Without the unanimous vote or written consent of all the Members, no Manager will directly or indirectly:
4599726_1

6.9.1 time,

Do any act in contravention of this Agreement, as amended from time to

6.9.2 Do any act that would make it impossible to carry on the ordinary business of the Company, provided that actions of the Managers in accordance with the purposes of the Company or rights and powers granted under this Agreement will not be considered to breach this clause, 6.9.3 Confess a judgment against the Company,

6.9.4 Possess Company property, or assign rights in specific Company property, for other than a Company purpose, 6.9.5 Knowingly perform any act that would subject any Member to liability as a general partner of a partnership in any jurisdiction, 6.9.6 6.9.7 Commingle funds of the Company with funds of any other person; Lend to any person any of the cash funds or other Company property;

6.9.8 Purchase or lease Company property from the Company or sell or lease property to the Company; 6.9.9 Guarantee the indebtedness of any person or cause, suffer or permit any Company property to secure or become collateral for any indebtedness of any person other than the Company; 6.9.10 Amend the number of Managers set forth in Section 6.1; 6.9.11 Unless such Manager or Managers have been appointed as the Tax Matters Member for the Company, extend the statute of limitations for assessment of tax deficiencies against the Company and its Members with respect to adjustments to the Companys federal, state or local tax returns; 6.9.12 Unless such Manager or Managers have been appointed as the Tax Matters Member for the Company, represent the Company, the Members and Interest Holders before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company, the Members and any Interest Holders in their capacities as such, and to execute any agreements or other documents relating to or affecting tax matters, including agreements or other documents that bind the Members and Interest Holders with respect to tax matters or otherwise affect the rights of the Company, Members and Interest Holders; 6.9.13 Prosecute or defend claims by or against the Company or affecting title to Company property and, unless such Manager or Managers have been appointed as the Tax Matters Member for the Company, to contest any determination by the Internal Revenue Service or any state or local taxing authority as to any matters affecting the Company, any Members or Interest Holders; or
4599726_1

6.9.14 Appoint one of the Managers as the Tax Matters Member for the Company. 6.10 Insurance. At all times during which the Company owns real property, the Managers will cause the Company to obtain, maintain, renew and pay for fire and other casualty, rental income or interruption, general liability, workers compensation, automobile, and other insurance in amounts, on other terms, and from insurers customarily required by or acceptable to commercial lenders loaning money secured by similar property. 6.11 Compensation of Managers. The Company will pay or reimburse the Managers for all reasonable legal, accounting, travel, and other fees and expenses incurred by the Managers in connection with the performance of their obligations under this Agreement. The Managers shall be entitled to compensation for the Managers services as determined by the Members. 7 RIGHTS AND RESTRICTIONS OF MEMBERS

7.1 Members and Voting. There shall be only one class of membership and no Member shall have any rights or preferences in addition to or different from those possessed by any other Member. Each Member shall vote in proportion to the Members Percentage Interest as of the governing record date, determined in accordance with Section 7.2. Any action that may or that must be taken by the Members shall be by a unanimous Vote of the Members. 7.2 Record Date. The record date for determining the Members entitled to Notice of any Meeting, to Vote, to receive distribution, or to exercise any right in respect of any other lawful action, shall be the date set by a majority of Members, provided that such record date shall not be more than 60, nor less than 10 days prior to the date of the Meeting, nor more than sixty (60) days prior to any other action. In the absence of any action setting a record date the record date shall be determined in accordance with California Corporations Code section 17104(k). 7.3 Permitted Transfers. Transfers of Membership Interests shall be governed by Section 13 of this Agreement. 7.4 Certificates Evidencing Membership Interests. The Company may, but shall not be required, to issue certificates evidencing Membership Interests (Membership Interest Certificates) to Members of the Company. Once Membership Interest Certificates have been issued, they shall continue to be issued as necessary to reflect current Membership Interests held by Members. Membership Interest Certificates shall be in such form as may be approved by the Member, shall be manually signed by the Member, and shall bear conspicuous legends evidencing the restrictions on Transfer and the purchase rights of the Company and Members set forth in Article 13. All issuances, reissuances, exchanges, and other transactions in Membership Interests involving Members shall be recorded in a permanent ledger as part of the books and records of the Company.

4599726_1

MEMBERS INTERESTS; CAPITAL CONTRIBUTIONS

8.1 Units. The Members ownership in the Company shall be represented by Units. The initial number of Membership Units authorized for issuance by the Company shall be Ten Thousand (10,000). The number of Membership Units authorized for issuance by the Company shall be increased or decreased, upon the unanimous consent of the Members. 8.2 Initial Capital Contributions. The initial capital contribution and the number of Units of the Initial Member are set forth in Exhibit B attached hereto. The original contribution has been fully received and credited to the Initial Members capital account as an initial contribution to the capital of the Company. Upon any permitted transfer or admission of additional Members in the Company, the capital contributions, fair market value of property contributed and the number of Units of the Members shall be set forth on an addendum to Exhibit B which states the Units held by all Members in the Company immediately following the time of transfer or admission of additional Member(s). The date of transfer or admission of new or additional Member(s) shall also be stated. 8.3 Members Interests in Company Capital. Each Members Interest in the capital of the Company will be equal to the total capital contributed by that Member (or that Members predecessor in interest) to the Company in cash or property. 8.4 Subsequent Contributions. Subsequent contributions to the capital of the Company will be made in such amounts and at such times as the Members will from time to time agree by the unanimous vote of the Members. 9 CAPITAL ACCOUNTS

Separate capital accounts will be maintained by the Company for each Member in accordance with Code Section 704(b) and the Regulations promulgated thereunder, representing the Members respective capital contributions to the Company. 9.1 Increase in Capital Account. The capital account of each Member will consist of the original contribution to capital by the Member, increased by the following: 9.1.1 The fair market value of any additional property contributed by the Member to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Code Section 752); 9.1.2 Additional contributions by the Member of cash; and

9.1.3 The Members share of the Companys Net Profits allocated to the Member pursuant to Article 10, including income and gain as computed for book purposes in accordance with Regulations Section 1.704-1(b)(2)(iv)(g). 9.2 Decrease in Capital Account. decreased by the following: The capital account of the Member will be

4599726_1

9.2.1 The amount of money distributed to the Member by the Company pursuant to Article 12; 9.2.2 The fair market value of property distributed to the Member by the Company (net of liabilities secured by such property that the Member is considered to assume or take subject to pursuant to Code Section 752); and 9.2.3 Allocations to the Member of Company loss and deductions, including loss and deductions computed for book purposes described in Regulations Section 1.704-1(b)(2) (iv)(g). 9.3 Special Allocation for 704(c) property. In cases where Code Section 704(c) applies to property of the Company, the Members capital accounts will be adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(g) for allocations to the Members of depreciation, depletion, amortization, gain, and loss, as computed for book purposes, with respect to such property. 9.4 Special Allocation for Revaluation. The capital accounts of the Members may be adjusted to reflect a revaluation of Company property (including intangible assets such as goodwill) on the Companys books, to the extent provided in Regulations Section 1.704-1(b)(2) (iv)(f). 9.5 Elections by Tax Matters Member. The Tax Matters Member may make all elections for federal income tax purposes, including an election to adjust the basis of the Company property pursuant to Code Sections 734, 743 and 754, in the event of the transfer of an Interest in the Company or the distribution of property by the Company. The Members capital accounts will be adjusted to the extent provided in Regulations Section 1.704-1(b)(2)(iv)(m). 9.6 Purpose of Article 9. The provisions of this Article 9 regarding the maintenance of capital accounts are intended to comply with Code Section 704(b), as amended, and the Regulations promulgated thereunder. Notwithstanding anything to the contrary contained in this Article, the Members may modify the method by which capital accounts are maintained by a unanimous Vote of the Members, provided such changes are consistent with Code Section 704 and Regulations promulgated thereunder. 10 PROFITS AND LOSSES

10.1 Net Profits and Losses. After giving effect to the special allocations set forth in Sections 10.2 and 10.3, Net Profits and Net Losses will be allocated and credited to the Members respective capital accounts in accordance with their Membership Interests. 10.2 Special Allocations.

10.2.1 Except as provided in Section 10.2.2 hereof, in the event any Member unexpectedly receives any adjustment, allocations or distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain will be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent
4599726_1

10

required by such Regulations, the adjusted capital account deficit of such Member as quickly as possible. 10.2.2 Notwithstanding any other provision of this Section 10.2, if there is a net decrease in Company minimum gain for any Company fiscal year, the minimum gain charge back requirement contained in Regulations Section 1.704-2 will apply and each Member must be allocated items of Company income and gain for that year equal to that Members share of the net decrease in Company minimum gain. This Section 10.2.2 is intended to comply with the minimum gain charge back requirement of the Regulations and will be interpreted consistently therewith. 10.3 Curative Allocations. The allocations set forth in Sections 10.2.1 and 10.2.2 (the regulatory allocations) are intended to comply with certain requirements of Code Section 704 and Regulations promulgated thereunder. Notwithstanding any other provisions of this Article 10 (other than the regulatory allocations), the regulatory allocations will be taken into account in allocating other profits, losses and items of income, gain, 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 will be equal to the net amount that would have been allocated to each such Member if the regulatory allocations had not occurred. 10.4 Federal Income Tax. It is the intent of this Company and its Member that this Company will be governed by the applicable provisions of Subchapter K, of Chapter 1, of the Internal Revenue Code, as amended, during such times as the Company has more than a single Member and shall be a disregarded entity during such times as the Company has a single Member. 11 INTEREST AND COMPENSATION

11.1 Interest and Compensation. Members will not be credited with interest on their capital accounts, and, unless the Members unanimously agree, Members as such and in their capacities as Managers will not be entitled to salary for services rendered on behalf of the Company. 11.2 Withdrawal of Member. No Member may withdraw or resign as a Member without the written consent of all the Managers. The withdrawal of a Member will not cause the Company to dissolve. If a Member is permitted to withdraw, the Company shall have the opportunity to purchase the withdrawing Members Interest on the terms provided for in Sections 13.8 and 13.9 hereof. 12 DISTRIBUTIONS TO MEMBERS

12.1 Distributions. The Members will determine the amount of cash, if any, available for distribution at such times as the Members of the Company deem advisable. The distribution will be based upon all relevant factors, including, but not limited to, the operating expenses and debt service of the Company, sums expended by the Company for capital expenditures and a reasonable reserve for working capital.
4599726_1

11

12.2 Amount of Distributions. No distribution will be made if, after the distribution is made, the assets of the Company are less than all liabilities of the Company, except liabilities to Members on account of their contributions. 12.3 Allocation of Distribution. Distributions will be made in proportion to the Membership Interests in the Company, as of the date of distribution, unless otherwise agreed by the unanimous Vote of the Members. 13 RESTRICTIONS ON TRANSFER OF A MEMBERS INTEREST

13.1 Right of First Refusal. Except as specifically provided herein, no Member will voluntarily sell, transfer, encumber, assign, or otherwise dispose of all or any part of the Members Units in the Company to any Transferee without first offering to sell the Units to the Company. The Transferring Member will send to the Company a written offer executed by the Transferee stating (1) the exact Units to be purchased by the Transferee, (2) the amount of the purchase price, (3) the terms for the purchase, and (4) the qualifications of the Transferee, if any are required, to own Membership Units in the Company. Within thirty (30) days after receipt of the written offer by the Company, the Company may purchase the Units of the Transferring Member on the terms set forth in the offer by the Transferee or terms set forth in Section 13.9 below, whichever are more favorable to the Company in its sole discretion. The exercise of the option by the Company will be determined by the Vote of the Members. Within five (5) days of the Companys failure to exercise any right of first refusal described in this Article, the Members of the Company will forward to each of the other Members of the Company, a copy of the Transferring Members written offer together with a statement that the Company has elected not to exercise its right of first refusal. The Members will then have the right to purchase the Transferring Members Units in the Company at the price and on the terms specified in the Transferring Members written offer or on the terms set forth in Section 13.9 below, whichever are more favorable to the Members in their sole and absolute discretion. Any Member desiring to acquire part or all of the Transferring Members Units will deliver to the Members of the Company a written election to purchase the Units or a specified portion of such Units, within thirty (30) days of the date of the Companys notice. If the Company receives notice from the Members electing to purchase in the aggregate more than the Transferring Members Units, each purchasing Member will have priority, up to the amount of the Units specified in his or her notice, to purchase such proportion of the Units as his or her own Units bears to the total Membership Units of the Company held by the Members electing to purchase. If any Member elects to purchase as specified above, the Members of the Company will notify each purchasing Member of the Transferring Members Units as to which his or her election was effective within fourteen (14) days of the expiration of the option period provided to Members described herein. Such Members will meet the terms and conditions of the purchase within twenty-one (21) days after receipt of the Members notification of the Transferring Members Units as to which such Members election was effective.
4599726_1

12

If the Company and the Members do not exercise the right of first refusal as to all of the Units of the Transferring Member described in the written offer, the Transferring Member may sell, transfer, assign, encumber, or otherwise dispose of the Units to the Transferee specified in the notice on the exact terms specified in the notice. However, if the Transferring Member does not sell, transfer, assign, encumber, or otherwise dispose of the Units to the Transferee on those exact terms within sixty (60) days after expiration of the time for the Company and the Members to exercise the right of first refusal, the Transferring Member must, before disposing of the Units re-offer the Units to the Company and the Members in the manner as set forth in this Article. If all of the Members of the Company, other than the Transferring Member, do not approve of the proposed sale, transfer, assignment, or encumbrance by unanimous written consent, the Transferee of the Units will have no right to Vote or participate in the management of the business and affairs of the Company or to become a Member. The Transferee, unless unanimous written consent is obtained, is only entitled to receive the share of profits or other compensation by way of income, and the return of contributions to which the Transferring Member would otherwise be entitled. No Transferring Member or any Transferee may exercise any Voting rights of a Member except upon admittance by the non-transferring Members of the Transferee as a Substituted Member. 13.2 Rights of Transferee. In the event the sale, transfer, assignment or encumbrance is approved by unanimous written consent of the remaining Members, the Transferee will be admitted to all the rights and powers of a Member, and be subject to all the restrictions and liabilities of the Transferring Member. However, pursuant to the Act, the Transferring Member will not be released from liability to the Company. 13.3 Conditions to Transfer. Notwithstanding the provisions of Sections 13.1 and 13.2 above, no Member will have the right voluntarily or involuntarily to sell, assign, pledge, mortgage, encumber or grant any security interest in or otherwise transfer all or any portion of any Membership Interest, and no such purported transfer need be recognized by the Company, unless all of the following requirements are satisfied: 13.3.1 The transfer will not of itself cause the Company to be in default under any indebtedness of the Company; 13.3.2 The Transferring Member will deliver to the Company at the Companys request an opinion in form and substance and from legal counsel reasonably acceptable to the Members stating that such transfer does not violate any federal or state securities law, and the Transferee will deliver such additional documents respecting the Transferees investor suitability and other legal or investment matters as the Members may reasonably require; and provided further that the Company will have no duty to participate in, cause or pay for any registration or qualification procedures under federal or state securities laws; 13.3.3 The Transferring Member will deliver to the Company a fully executed written agreement of assignment that sets forth the name, address, and taxpayer identification number of the Transferee, and the terms of such transfer, provided such terms will not conflict with any provision of this Agreement;
4599726_1

13

If any Member is a closely held corporation, or is an unincorporated association or partnership, the transfer, assignment or hypothecation of any stock or interest in such corporation, association or partnership in the aggregate in excess of fifty percent (50%) will be deemed an assignment or transfer within the meaning of this Agreement, except as provided in Section 13.5. 13.4 Admission of Substituted Members. Notwithstanding the provisions of Sections 13.1 and 13.2 above, no Transferee will become a Substituted Member unless the following additional conditions are met: 13.4.1 The Transferee executes, acknowledges and delivers to the Company a written agreement stating that such Transferee agrees to be bound by the provisions of this Agreement and executes such other instruments as the Members deem necessary or appropriate for admission as a Substituted Member; 13.4.2 Each Transferee reimburses the Company for all reasonable accounting, legal and other expenses incurred by the Company regarding the transfer and such admission; 13.4.3 All of the remaining Members and Managers consent to the admission of such Transferee as a Substituted Member. 13.5 Permitted Transfers. Any Member may, notwithstanding Sections 13.1 through 13.3, transfer all or part of the Members Units in the Company to the following Persons (any such Transfer referred to herein is a Permitted Transfer and any such Person to whom a Permitted Transfer is made is referred to herein as a Permitted Transferee): 13.5.1 to the Company; 13.5.2 13.5.3 to any other Member; to a Family Member of such Member;

13.5.4 to a trust of which such Member is treated as the owner pursuant to Code Sections 671 through 677; provided, however, that the subsequent failure of such Member to be treated as the owner of such trust pursuant to such Code Sections shall constitute a Transfer, unless the beneficiaries of the trust are Permitted Transferees as defined in this Section 13.5; 13.5.5 to any trust for the sole benefit of any one or more Family Members of such Member; 13.5.6 with respect to a Transfer by a Member, to any trust for the benefit of such Members spouse, provided that such Transfer constitutes qualified terminal interest property within the meaning of Code Sections 2056(b)(7)(B) or 2523(f)(2), and; provided that all of the beneficiaries of the
4599726_1

14

trust (other than such individuals spouse) shall be Family Members of such individual; 13.5.7 to any entity in which all of the ownership interests are owned by such Member or by Family Members of such Member; 13.5.8 with respect to a Transfer by a trust, to the beneficiaries thereof in accordance with the terms of the trust instrument; 13.5.9 with respect to a Transfer by an incompetent Member, to the guardian or legal representative of said incompetent Member; and with respect to a Transfer by such guardian or legal representative, to any Person that said incompetent individual otherwise would have been permitted to make a Transfer to, pursuant to this Section 13.5. 13.6 Transfer Upon Death of Member. Within a period beginning with the death of any Member and ending ninety (90) days following the death of the Member, the remaining Member(s) will have the option to purchase all of the decedents Units in the Company at the price and on the terms provided in this Agreement. Any Member desiring to acquire part or all of the deceased Members Units will deliver to the deceased Members representative a written election to purchase the Units or a specified portion of such Units, within ninety (90) days of the date of the deceased Members death. If the Company receives notice from Members electing to purchase in the aggregate more than the deceased Members Units, each purchasing Member will have priority, up to the amount of the Units specified in his or her notice, to purchase such proportion of the Units as his or her Units bears to the total Units of the Company held by Members electing to purchase. If Units are owned by a revocable living trust, the death of the Grantor of the Trust will be deemed the death of the Member and subject the Units held by the trust to be purchased under this Section 13.6 13.7 Triggering Events - Involuntary Transfer. If any of the triggering events listed below occur as to any Member, the Company or the other Members will have the option to purchase all of the Units owned by the Member. The options to purchase shall be vested and exercisable in the priority and manner set forth in the Section of this Agreement entitled Right of First Refusal. The options will be triggered if any of the following events occur: 13.7.1 A Member is adjudicated a bankrupt, either voluntary or involuntary; 13.7.2 A Member makes an assignment for the benefit of creditors; 13.7.3 A Members Interest is subject to a writ of attachment or charging order; 13.7.4 The execution of any property settlement agreement between any Member and spouse, or the entry of any decree of divorce or separate maintenance by a court of
4599726_1

15

competent jurisdiction, wherein the spouse is awarded any Units or a trust is imposed on said Units for the benefit of said spouse, then to the extent said Units are transferred, or to the extent said Units are subject to the imposition of any such trust or lien, there will be deemed a triggering event as to the Units so affected. If Units have been transferred to or are originally owned by a revocable living trust, a triggering event occurring as to any Grantor of such trust will be deemed the occurrence of a triggering event to the Member trust and subject the Units held by the trust to purchase under this Section 13.7. When a triggering event occurs, the Member as to whom the event has occurred shall give the Member(s) written notice of the occurrence of the event. The Company will then give written notice to the other Members, or the other Members respective representatives of its options to purchase the Units and the terms as set forth in this Article. 13.8 Valuation. The purchase price for any Units to be purchased under Sections 13.6 and 13.7 of this Agreement will be as agreed between or among the buyer and seller or the selling Members representative. In the event the parties do not agree within thirty (30) days of the later of (a) the date giving rise to the option to purchase, or (b) the date of timely exercise of such option, the parties will select an appraiser or appraisers (Appraiser), mutually satisfactory to each of them, who will determine the value of the Company (determined net of ordinary and reasonable costs of sale) and will determine the value of the Units subject to purchase. In the event the parties cannot mutually agree on the selection of the Appraiser(s) to value the Company within ten (10) days of expiration of the thirty (30) day period described above, each party, within ten (10) days thereafter, will select an Appraiser, and the Appraisers so selected will mutually select a third. The three Appraisers will then value the Company net of ordinary and reasonable costs of sale. In the event the parties cannot mutually agree on the selection of the Appraiser(s) to value the Units subject to purchase within ten (10) days of expiration of the thirty (30) day period described above, each party, within ten (10) days thereafter, will select an Appraiser, and the Appraisers so selected will mutually select a third. These three Appraisers will then value the Units subject to purchase, giving effect to any applicable marketability, control or other discounts or premiums. The values will equal the average of the appraisals. The parties will bear the costs of the Appraisers which they select and share equally the cost of the independent Appraiser(s). 13.9 Payment. The consideration for any Membership Interest transferred under this Agreement will be paid to the transferring Member or his representative or successor, as the case may be, as provided for in this Agreement. If the event leading to the purchase is the death of any Member, the decedents representative will apply for and obtain any necessary court approval or confirmation of the sale of the decedents Membership Interest and the Company or the surviving Members will file the necessary proofs of death and collect the proceeds of any outstanding policies of insurance on the life of the decedent owned by the Company or such Members. If the purchase price is fully funded by proceeds of any such insurance policies, the purchaser will pay the purchase price in cash from the proceeds of any such insurance policies. If the purchase price is not fully funded by insurance on the life of the decedent Member, each purchaser will pay the purchase price in cash up to the full amount of the proceeds of any such insurance policies of which that Member
4599726_1

16

is the policy owner, and will pay any remaining portion of the purchase price in accordance with the terms of the following subparagraph. The terms for payment of the purchase price of a Membership Interest (other than amounts by life insurance proceeds as provided in the preceding paragraph) will be as agreed by the parties. If the parties do not otherwise agree, the balance of the purchase price shall be paid twenty percent (20%) in cash as a down payment and the balance pursuant to the terms of a Promissory Note (herein the Note) to be executed by the Company or by the Member or Members, as the case may be. The Note will provide for payments of principal and interest, amortized over a ten (10) year period and shall provide that payments shall be made not less frequently than quarterly. Interest shall accrue against the balance of the purchase price at the applicable federal rate as established for the month of purchase pursuant to Section 1274 of the Code. The Note will be dated as of the date the purchase is made. The Note will provide that the maker may prepay all or any portion of the unpaid principal balance and accrued interest at any time, without penalty. The Note will include the provision that the entire unpaid principal balance, and all accrued interest, will become immediately due and payable upon the happening of any of the following conditions: 13.9.1 Adjudication of bankruptcy of the maker of the Note; 13.9.2 Voluntary or involuntary petition by or on behalf of the maker of the Note for arrangement or reorganization, or for the protection of creditors and the debtor, under the Bankruptcy Act; 13.9.3 Upon default in payment of any of the terms by the maker of amounts required to be paid under the Note; 13.9.4 In the event the sale is to a Member, upon the sale of all, or substantially all, of the Membership Interest in the Company by the Member; 13.9.5 If the sale is to the Company, upon the sale of the Company of all or substantially all of the assets of the Company. 13.10 Governmental Approvals. The Company agrees to apply for and use its best efforts to obtain all governmental and administrative approvals required, if any, in connection with the purchase and sale of Membership Interests under this Agreement. The Members agree to cooperate in obtaining the approvals and to execute any and all documents that may be required to be executed by them in connection with the approvals. The Company will pay all costs and filing fees in connection with obtaining the approvals. 1 MISCELLANEOUS SECURITIES ISSUES

13.11 Prohibited Market Transfers. Each Member hereby covenants and agrees with the Company for the benefit of the Company and all other Members that (a) it is not currently making a market in Membership Interests or Units; (b) it will not transfer any Membership Interest or Unit upon an established securities market or a secondary market (or the substantial equivalent) within the meaning of Code Section 7704(b) (and any regulations, proposed regulations, revenue rulings or other official pronouncements of the Internal Revenue Service or
4599726_1

17

Treasury Department that may be promulgated or published), and (c) in the event such regulations, revenue rulings, or other pronouncements treat any or all arrangements which facilitate the selling of a Membership Interest or Unit which are commonly referred to as Matching Services as being a secondary market or substantial equivalent thereof, he will not transfer any Membership Interest or Unit through a Matching Service that is not approved in advance by the Company. 13.12 Securities Law Legend. Each Member hereby agrees that the following legend may be placed upon any counterpart of this Agreement, or any other document or instrument evidencing ownership of Membership Units in this Company: THE MEMBERSHIP UNITS DESCRIBED HEREIN (1) HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER FEDERAL OR STATE SECURITIES LAWS, (2) HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF, AND (3) MAY NOT BE SOLD OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE FEDERAL REGISTRATION STATEMENT AND STATE QUALIFICATION RELATED THERETO OR AN OPINION OF COUNSEL FURNISHED AT HOLDERS EXPENSE IN FORM AND SUBSTANCE AND FROM COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE LAW. 14 DISSOLUTION AND LIQUIDATION

14.1 Events Requiring Dissolution. The Company shall be dissolved only upon the unanimous written consent of the Members. 14.2 Liquidation. Upon the occurrence of any event requiring dissolution as set forth in Section 15.1, the Members of the Company will immediately execute and deliver to the Secretary of State a statement of its intent to dissolve. Upon filing the statement of intent to dissolve, the Company will cease to carry on its business and will wind up its affairs and liquidate. 14.3 Distribution of Assets. During the liquidation of the Company, the Members will continue to share Net Profits and Losses in the same proportions as before dissolution. In settling accounts after dissolution, the proceeds from the liquidation of the Companys assets will be applied as follows: 14.3.1 To creditors of the Company, in the order of priority as provided by law, other than debts owed to Members for their contributions; 14.3.2 To the Members with respect to their positive capital account balances; 14.4 Gains or Losses. During liquidation, any gain or loss on the disposition of the Companys property will be credited or charged to the Members in accordance with the provisions of Article 10. Any property distributed in kind in liquidation will be valued and treated as though the property were sold for its fair market value and the cash proceeds distributed. The difference between the value of the property distributed in kind and its book
4599726_1

18

value to the Company will be treated as a gain or loss on the sale of the property to be allocated between the Members pursuant to Article 10.

4599726_1

19

15

INDEMNIFICATION

15.1 Indemnification of Member, Employee or Agent: Proceeding Other Than By Company. The Company will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, whether civil, criminal, administrative or investigative, except an action by or in the right of the Company, by reason of the fact that he is or was a Member, Manager, employee or agent of this Company, or is or was serving at the request of this Company as Manager, director, officer, employee or agent of another limited-liability company or corporation, against expenses, including attorneys fees, judgment, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of this Company, and, with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of this Company, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful. 15.2 Indemnification of Member, Employee or Agent: Proceeding by Company. The Company will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of this Company to procure a judgment in its favor by reason of the fact that he is or was a Member, Manager, employee or agent of this Company, or is or was serving at the request of this Company as a Member, Manager, director, officer, employee or agent of another limited-liability company, corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys fees actually and reasonably incurred by him in connection with the defense or settlement of the actions or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of this Company. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to this Company or for amounts paid in settlement to this Company, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. 15.3 Indemnity if Successful. To the extent that a Member, employee or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in Section 16.1 or 16.2, or in defense of any claim, issue or matter therein, the Company will indemnify the Member, employee or agent against expenses, including attorneys fees, actually and reasonably incurred in connection with the defense. 15.4 Expenses. Any indemnification under Sections 16.1 and 16.2, unless ordered by a court or advanced by the Company, must be made by this Company only as authorized in the specific case upon a determination that indemnification of the Member, Manager, employee or agent is proper in the circumstances. The determination must be made:
4599726_1

20

15.4.1 By a unanimous Vote of the Members who were not parties to the act, suit or proceeding; or 15.4.2 If a unanimous Vote of the Members who were not parties to the act, suit or proceeding cannot be obtained, by a majority of the Members, disregarding the vote of any Member who was a party to the act, suit or proceeding. 16 COMPANY RECORDS AND REPORTS Books and Records. The Members will cause the Company to keep the

16.1 following:

16.1.1 Complete books and records of account in which will be entered fully and accurately all transactions and other matters relating to the Company. The Companys books and records will be kept on a cash basis, except as the Members may otherwise determine to be permitted under the Code; 16.1.2 A current list of the full name and last known business or residence address of each Member set forth in alphabetical order listing the Members capital contribution to the Company and Interests owned; 16.1.3 A copy of the Articles of Organization and all amendments thereto and all filings by the Company in California and other states; and 16.1.4 A copy of any then effective written operating agreement. 16.2 Location of Books and Records. All such books and records will be maintained at the principal executive office of the Company and also at the resident agents office of the Company. In each location, such books and records will be available for inspection and copying by, and at the expense of, the Members, or their duly authorized representatives, during reasonable business hours. 17 MISCELLANEOUS PROVISIONS

17.1 Agreement to Perform Necessary Acts. Each Member agrees to perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement. 17.2 Amendments. The provisions of this Agreement may not be waived, altered, amended, or repealed, in whole or in part, except with the unanimous written consent of the Members. 17.3 Successors and Assigns. This Agreement will be binding on, and will inure to the benefit of, the Members and their respective heirs, legal representatives, successors, and assigns. 17.4 Validity of Agreement. It is intended that each Section of this Agreement will be viewed as separate and divisible, and in the event that any Section will be held to be invalid, the remaining Sections will continue to be in full force and effect.
4599726_1

21

17.5 Notices. All notices, requests, demands, and other communications under this Agreement will be in writing and will be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or within seventy-two (72) hours after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed to the party at his address set forth on the signature page of this Agreement, or any other address that any party may designate by written notice to the others. 17.6 Governing Law. THIS AGREEMENT, AND ALL QUESTIONS RELATING TO ITS VALIDITY, INTERPRETATION, PERFORMANCE AND ENFORCEMENT (INCLUDING, WITHOUT LIMITATION, PROVISIONS CONCERNING LIMITATIONS OF ACTION), WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE BY RESIDENTS OF AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. 17.7 Exclusive Jurisdiction. It is agreed that the Superior Court of the State of California, in and for _____________ County, will be the sole and exclusive forum for the resolution of any disputes arising among any of the Members. The Company and each of the Members expressly and unconditionally confer jurisdiction for the resolution of any and all disputes upon such Court. In the event that any litigation commenced in such Court is properly removable to a Federal Court under the laws of the United States of America, such removal will take place if the legal basis for removal exists; provided, however, that the parties to this Agreement agree that the exclusive venue of the Federal forum for the resolution of any disputes will be the United States District Court for the Southern District of California, located in Los Angeles, California. 17.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 17.9 Gender and Number. As used in this Agreement, the masculine, feminine, and neuter gender, and the singular or plural number will be considered to include the others whenever the context so indicates. 17.10 Attorneys Fees. If any party brings an action or proceeding (including any crosscomplaint, counterclaims, or third-party claim) against any other party by reason of a default by the other party or otherwise arising out of this Agreement, the non-prevailing party will pay to the prevailing party in such action or proceeding all of the prevailing partys costs and expenses of suit (including the costs and expenses of enforcing any judgment or settlement), including reasonable attorneys fees, which will be payable whether or not such action is prosecuted to judgment. Prevailing party within the meaning of this Section 18.10 includes a party who dismisses an action for recovery hereunder in exchange for payment of the sums allegedly due, performance of covenants allegedly breached, or consideration substantially equal to the relief sought in the action. 17.11 Complete Agreement. This Agreement and the Articles of Organization constitute the complete and exclusive statement among the Members with respect to the subject
4599726_1

22

matter contained therein. This Agreement and the Articles of Organization supersede all prior agreements by and among the Members. IN WITNESS WHEREOF, the Initial Member has executed or caused to be executed this Agreement on the day and year first above written. MEMBER: BANKERS UNION TRUST, dated January 16, 2008, as amended JEFFREY L. TAYLOR

4599726_1

23

EXHIBIT A Articles of Organization

(See attached)

4599726_1

24

EXHIBIT B Initial Contribution Member Contribution See Exhibit C attached hereto. Membership Units 10,000 Membership Interest 100%

4599726_1

25

EXHIBIT C Real Property

4599726_1

26