PEPCO HOLDINGS INC (Form: U5B/A, Received: 02/13/2003 09:12:21)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

AMENDMENT NO. 1 TO

FORM U5B
REGISTRATION STATEMENT
Filed Pursuant to Section 5 of the
Public Utility Holding Company Act of 1935

PEPCO HOLDINGS, INC.

--------------------------

Name, Title and Address of Officer to Whom Notices
and Correspondence Concerning this Statement
Should Be Addressed

Anthony J. Kamerick
Vice President and Treasurer
Pepco Holdings, Inc.
701 Ninth Street, N.W.
Washington, DC 20068

Form U5B is hereby amended and restated in its entirety except for exhibits previously filed.

Glossary of Defined Terms ---------------------------
When used herein, the following terms shall have the meanings set forth below:
ACE	Atlantic City Electric Company
Act	Public Utility Holding Company Act of 1935, as amended
CAG	Conectiv Atlantic Generation, L.L.C.
CDG	Conectiv Delmarva Generation, Inc.
CES	Conectiv Energy Supply, Inc.
CMM	Conectiv Mid-Merit, Inc.
CPG	Conectiv Pennsylvania Generation, Inc.
Delmarva or DPL	Delmarva Power & Light Company
FERC	Federal Energy Regulatory Commission
Merger	The business combination between Pepco and Conectiv
Merger U-1	The Form U-1 Application/Declaration filed by Pepco Holdings in File No. 70-9913, as amended
PCI	Potomac Capital Investment Corporation
PES	Pepco Energy Services, Inc.
Pepco	Potomac Electric Power Company
Pepco Holdings, PHI or the Company	Pepco Holdings, Inc.
PHISCO	PHI Service Company

REGISTRATION STATEMENT

The undersigned holding company hereby submits Amendment No. 1 to its registration statement to the Securities and Exchange Commission pursuant to Section 5 of the Act.

1.     Exact name of registrant: Pepco Holdings, Inc.

2.     Address of principal executive offices: 701 Ninth Street, NW, Washington, DC 20068

3.     Name and address of chief accounting officer:

        James P. Lavin
        Vice President and Controller
        Pepco Holdings, Inc.
        701 Ninth Street, N.W.
        Washington, DC 20068

4. Certain information as to the registrant and each subsidiary company thereof:

Name of Company	Organization	State/Country	Type of Business
Pepco Holdings, Inc.	Corporation	DE	Registered holding company
Potomac Electric Power Company	Corporation	DC & VA	Electric utility
Edison Capital Reserves Corporation	Corporation	DE	Investment holding company
Potomac Electric Power Company Trust I	Business Trust	DE	Financing
Gridco International L.L.C.	Limited Liability Co.	DE	Inactive
Microcell Corporation	Corporation	NC	Commercial fuel cells
POM Holdings, Inc.	Corporation	DE	Nonregulated investments
PepMarket.com LLC	Limited Liability Co.	DE	Inactive
Pepco Energy Services, Inc.	Corporation	DE	Energy-related company
Pepco Building Services, Inc.	Corporation	DE	Energy-related company
MET Electrical Testing Company, Inc.	Corporation	DE	Energy-related company
Substation Test Company, Inc.	Corporation	DE	Energy-related company
Engineered Services, Inc.	Corporation	DE	Energy-related company
G&L Mechanical Services, Inc.	Corporation	DE	Energy-related company
Unitemp, Inc.	Corporation	DE	Energy-related company
Seaboard Mechanical Services, Inc.	Corporation	DE	Energy-related company
PES Home Services of Virginia	Corporation	VA	Home-related energy services
Potomac Power Resources, Inc.	Corporation	DE	Exempt wholesale generator
PES Landfill Gas Corporation	Corporation	DE	Energy-related company
Fauquier Landfill Gas, LLC	Limited Liability Co.	DE	Energy-related company
Trigen-Pepco Energy Services, LLC	Limited Liability Co.	DC	Energy-related company
Viron/Pepco Services Partnership	General Partnership	DE	Energy-related company
Potomac Capital Investment Corporation	Corporation	DE	Nonutility holding company
PCI Netherlands Corporation	Corporation	NV	Foreign utility company
PCI Queensland Corporation	Corporation	NV	Exempt wholesale generator
Kramer Junction Company	Corporation	CA	Holds qualifying small power production facilities
KJC Operating Company	Corporation	CA	Operates qualifying small power production facilities
Luz Solar Partners, Ltd., III	Limited Partnership	CA	Qualifying small power production facilities
Luz Solar Partners, Ltd., IV	Limited Partnership	CA	Qualifying small power production facilities
Luz Solar Partners, Ltd., V	Limited Partnership	CA	Qualifying small power production facilities
Luz Solar Partners, Ltd., VI	Limited Partnership	CA	Qualifying small power production facilities
Luz Solar Partners, Ltd., VII	Limited Partnership	CA	Qualifying small power production facilities
Electro Ecology, Inc.	Corporation	NY	Qualifying small power production facilities
Pepco Enterprises, Inc.	Corporation	DE	Energy-related business opportunities
Energy and Telecommunications Services, LLC	Limited Liability Co.	DE	Nonutility holding company
Severn Cable LLC	Limited Liability Co.	DE	Utilities and telecommunications contractor
Severn Construction, LLC	Limited Liability Co.	DE	Utilities and telecommunications contractor
Pepco Energy Company	Corporation	DE	Inactive
W.A. Chester, LLC	Limited Liability Co.	DE	Utilities and telecommunications contractor
W.A. Chester Corporation	Corporation	DE	Utilities and telecommunications contractor
Pepco Technologies, LLC	Limited Liability Co.	DE	Energy-related company
AMP Funding, LLC	Limited Liability Co.	DE	Being held for liquidation
RAMP Investments, LLC	Limited Liability Co.	DE	Nonutility holding company
PCI Air Management Partners, LLC	Limited Liability Co.	DE	Aircraft leasing
PCI Ever, Inc.	Corporation	DE	Nonutility holding company
Friendly Skies, Inc.	Corporation	Virgin Islands	Aircraft leasing
PCI Air Management Corporation	Corporation	NV	Aircraft leasing
American Energy Corporation	Corporation	DE	Nonutility holding company
PCI-BT Investing, LLC	Limited Liability Co.	DE	Nonutility holding company
Potomac Aircraft Leasing Corporation	Corporation	NV	Nonutility holding company
Aircraft Leasing Associates, LP	Limited Partnership	DE	Aircraft leasing
Potomac Capital Markets Corporation	Corporation	DE	Nonutility holding company
Edison Place, LLC	Limited Liability Co.	DE	Real estate
Linpro Harmans Land LTD Partnership	General Partnership	MD	Inactive
Potomac Harmans Corporation	Corporation	MD	Real estate
Harmans Building Associates	General Partnership	MD	Real estate
Potomac Nevada Corporation	Corporation	NV	Nonregulated investments
Potomac Delaware Leasing Corporation	Corporation	DE	Aircraft leasing
Potomac Equipment Leasing Corporation	Corporation	NV	Equipment leasing
Potomac Leasing Associates, LP	Limited Partnership	DE	Intercompany receivables
Potomac Nevada Leasing Corporation	Corporation	NV	Intercompany receivables
PCI Engine Trading, Ltd.	Limited Company	Bermuda	Investments
Potomac Capital Joint Leasing Corporation	Corporation	DE	Investments and intercompany receivables
PCI Nevada Investments	General Partnership	DE	Investments
PCI Holdings, Inc.	Corporation	DE	Nonutility holding company
Aircraft International Management Company	Corporation	DE	Intercompany receivables
PCI-BT Ventures	Partnership	DE	Nonutility holding company
PCI-BT & BCR-BT Ventures	Partnership	DE	Aicraft leasing
Potomac Nevada Investment, Inc.	Corporation	NV	Aircraft equipment leasing
American-LB Energy Partnership	General Partnership	NY	Inactive
Carbon Composite, LLC	Limited Liability Co.	DE	Inactive
PCI Energy Corporation	Corporation	DE	Oil and gas investments
Pepco Communications, Inc.	Corporation	DE	Exempt telecommunications company
Pepco Communications, LLC	Limited Liability Co.	DE	ETC subsidiary
Starpower Communications, LLC	Limited Liability Co.	DE	Telecommunications company
Nextgate, Inc.	Corporation	DE	Inactive
PHI Service Company (formerly Conectiv Resource Partners, Inc.)	Corporation	DE	Service company
Conectiv	Corporation	DE	Registered holding company
Delmarva Power & Light Company	Corporation	DE & VA	Combination gas and electric utility
Delmarva Financing I	Business Trust	DE	Financing
Atlantic City Electric Company	Corporation	NJ	Electric utility
Atlantic Capital I	Business Trust	DE	Financing
Atlantic Capital II	Business Trust	DE	Financing
Atlantic City Electric Company Transition Funding LLC	Limited Liability Co.	DE	Financing
Keystone Fuels, LLC	Limited Liability Co.	DE	Holds energy contracts
Conectiv Properties and Investments, Inc.	Corporation	DE	Nonregulated investments
DCI II, Inc.	Corporation	Virgin Islands	Leveraged Leasing
UAH - Hydro Kennebec, LP	Limited Partnership	NY	Qualifying project
LUZ Solar Partners, LTD., IV	Limited Partnership	CA	Qualifying small power production facilities
DCTC-Burney, Inc.	Corporation	DE	Nonutility holding company
Forest Products, L.P.	Limited Partnership	DE	Investments
Burney Forest Products, A Joint Venture	General Partnership	CA	Energy-related company
Conectiv Solutions LLC	Limited Liability Co.	DE	Energy management services
ATE Investments, Inc.	Corporation	DE	Equity Investments
King Street Assurance Ltd.	Company	Bermuda	Insurance
Enertech Capital Partners, L.P.	Limited Partnership	DE	Energy-related investments
Enertech Capital Partners II, L.P.	Limited Partnership	DE	Energy-related investments
Pac-West Telecomm, Inc.	Corporation	CA	Communications services
Capstone Turbine Corporation	Corporation	DE	Energy-related products
Black Light Power, Inc.	Corporation	DE	Energy research
Millenium Account Services, LLC	Limited Liability Co.	DE	Meter reading services
Conectiv Services, Inc.	Corporation	DE	Energy-related services
Conectiv Plumbing, L.L.C.	Limited Liability Co.	DE	Plumbing Services
Conectiv Thermal Systems, Inc.	Corporation	DE	Energy-related company
ATS Operating Services, Inc.	Corporation	DE	Energy-related company
Atlantic Jersey Thermal Systems, Inc.	Corporation	DE	Energy-related company
Thermal Energy Limited Partnership I	Limited Partnership	DE	Energy-related company
Atlantic Generation, Inc.	Corporation	NJ	Energy-related company
Vineland Limited, Inc.	Corporation	DE	Energy-related company
Vineland Cogeneration L. P.	Limited Partnership	DE	Energy-related company
Vineland General, Inc.	Corporation	DE	Energy-related company
Pedrick Gen., Inc.	Corporation	NJ	Energy-related company
Cogeneration Partners of America	General Partnership	NJ	Inactive
Binghamton Limited, Inc.	Corporation	DE	Being held for liquidation
Binghamton General, Inc.	Corporation	DE	Being held for liquidation
Energy Investors Fund III, L.P.	Limited Partnership	DE	IPP investments
Conectiv Communications, Inc.	Corporation	DE	Exempt telecommunications company
Atlantic Southern Properties, Inc.	Corporation	NJ	Real estate
Conectiv Energy Holding Company	Corporation	DE	Holding company
ACE REIT, Inc	Corporation	DE	Holding company
Conectiv Atlantic Generation, L.L.C.	Limited Liability Co.	DE	Utility ¹
Conectiv Bethlehem LLC	Limited Liability Co.	DE	Exempt wholesale generator
Conectiv Delaware Generation, Inc	Corporation	DE	Utility ¹
Conectiv Energy Supply, Inc.	Corporation	DE	Energy trading
Conectiv Operating Services Company	Corporation	DE	Energy-related company
Conectiv Mid-Merit, Inc.	Corporation	DE	Utility ¹
Energy Systems North East, LLC	Limited Liability Co.	DE	Exempt wholesale generator
Conectiv Pennsylvania Generation, Inc.	Corporation	DE	Utility ¹
Tech Leaders II, L.P.	Limited Partnership	DE	Energy-related investments
SciQuest.com, Inc.	Corporation	DE	E-commerce and computer support
Internet Capital Group, Inc.	Corporation	DE	E-commerce
Adolor Corp	Corporation	DE	Pharmaceutical
^{1 To be converted to an exempt wholesale generator.}

		BUSINESS
5.
a)		The general character of the business done by the registrant and its subsidiaries, separated as between the holding companies, public utility subsidiaries (as defined in the Act) and the various non-utility subsidiaries.
		Information regarding the general character of the business of Pepco Holdings and its subsidiaries can be found in the following documents: Item 1 of the Annual Report on Form 10-K of Pepco for the year ended December 31, 2001 (File No.1-1072); Item 1 of the Annual Report on Form 10-K of Conectiv for the year ended December 31, 2001 (File No. 1-13895); Item 1 of the Annual Report on Form 10-K of Delmarva for the year ended December 31, 2001 (File No. 1-1405); and Item 1 of the Annual Report on Form 10-K of ACE for the year ended December 31, 2001 (File No. 1-3559), each of which is hereby incorporated by reference.
b)		Any substantial changes which may have occurred in the general character of the business of such companies during the preceding five years.
	Information regarding any substantial changes which may have occurred in the general character of the business of Pepco Holdings and its subsidiaries during the preceding five years can be found in the Form 10-Ks of Pepco, Conectiv, Delmarva and ACE for each of the previous five years which were previously filed with the Commission and which are incorporated by reference herein.
6.	Describe briefly the general character and location of the principal plants, properties, and other important physical units of the registrant and its subsidiaries, showing separately (a) public utility and (b) other properties. If any principal plant or important unit is not held in fee, so state and describe how held.
	See Item 2 of the Annual Report on Form 10-K of Pepco for the year ended December 31, 2001 (File No.1-1072); Item 2 of the Annual Report on Form 10-K for Conectiv for the year ended December 31, 2001 (File No. 1-13895); Item 2 of the Annual Report on Form 10-K of Delmarva for the year ended December 31, 2001 (File No. 1-1405); and Item 2 of the Annual Report on Form 10-K of ACE for the year ended December 31, 2001 (File No. 1-3559), each of which is hereby incorporated by reference.
INTERSTATE TRANSACTIONS
7.	For each public utility company in the holding company system of the registrant which is engaged in the transmission of electric energy or gas in interstate commerce, furnish the following information for the last calendar year: Pepco, Delmarva and ACE have on file with the Federal Energy Regulatory Commission their respective 2001 FERC Form No. 1 which include information related to the transmission of electric energy. These reports have been provided as Exhibits G-1, G-2 and G-3, respectively. Delmarva has on file with the Federal Energy Regulatory Commission its 2001 FERC Form No. 2 that includes information related to the transmission of gas. This report has been provided as Exhibit G-4. Pepco and ACE are not engaged in the transmission of gas in interstate commerce. CMM and CPG are not engaged in the transmission of electric energy or gas in interstate commerce. Other than the operation of the step up transformers associated with the operation of their generating facilities, CAG and CDG are not engaged in the interstate transmission of electric energy or gas.

SECURITIES OUTSTANDING
8.	Submit the following information concerning the registrant and each subsidiary thereof as of the latest available date:
FUNDED DEBT
a)		For each issue or series of funded debt, including funded debt secured by liens on property owned, whether or not such debt has been assumed: (Do not include here any contingent liabilities reported under paragraph 8(c).)
AS OF SEPTEMBER 30, 2002 The responses to Columns E, F and H are zero.

Col. A	Col. B		Col. C		Col. D		Col. G
Name of Obligor	Title of Issue		Amount Authorized ($000)		Amount Issued Less Retired ($000)		Amount Pledged by Registrant and Each Subsidiary ($000)
ACE		Medium Term Notes Series A 7.97% to 7.98% Due May 19, 2004		150,000		30,000		30,000
ACE		Medium Term Notes Series B 6.29% to 7.20% Due January 27,2003 to June 23, 2008		240,000		138,000		138,000
ACE		Medium Term Notes Series C 7.15% to 7.68% Due May 24, 2004 to August 23, 2016		125,000		35,000		35,000
ACE		Medium Term Notes Series D 6% to 6.19% Series Due January 15, 2003 to January 17,2006		150,000		85,000		85,000
ACE		Medium Term Notes- Unsecured Series A 6.63% to 7.52% Due from June 2, 2003 to April 2, 2007		150,000		45,000		0
ACE		First Mortgage Bonds 6.625% Series August 1, 2013		75,000		68,600		68,600
ACE		First Mortgage Bonds 7.0% Series September 1, 2023		75,000		62,500		62,500
ACE		First Mortgage Bonds 7.0% Series August 13, 2028		75,000		75,000		75,000
ACE		Pollution Control, York Co. 6.375% Series December 1, 2006		2,500		2,125		2,125
ACE		Pollution Control, Series A (Salem County) Variable Rate Series April 15, 2014		18,200		18,200		0
ACE		Pollution Control, Series A (Salem County) Variable Rate Series July 15, 2017		4,400		4,400		0
ACE		Pollution Control, Series A 6.8% Series March 1, 2021		38,865		38,865		38,865
ACE		Pollution Control, Series A (Salem County) 5.6% Series November 1, 2025		4,000		4,000		4,000
ACE		Pollution Control, Series C (Salem County) 6.15% Series June 1, 2029		23,150		23,150		23,150
ACE		Pollution Control, Series B (Cape May County) 7.0% Series November 1, 2029		6,500		6,500		6,500
ACE		Pollution Control, Series A (Cape May County) 7.2% Series November 1, 2029		25,000		25,000		25,000
Aircraft International Management Company		Zero Coupon Debt		3,171		3,171		0
Conectiv		Medium Term Notes 5.30% Series Due 6/1/05		250,000		250,000		0
Conectiv		Medium Term Notes A 6.73% Series Due 6/1/06		250,000		150,000		0
Delmarva		First Mortgage Bonds 6.95% series due October 1, 2002		30,000		30,000		30,000
Delmarva		First Mortgage Bonds 6.40% series due July 1, 2003		90,000		85,000		85,000
Delmarva		Amortizing First Mortgage Bonds 6.95% series due June 1, 2003-2008		25,800		17,854		17,854
Delmarva		First Mortgage Bonds 8.15% series due October 1, 2015		66,000		32,000		32,000
Delmarva		First Mortgage Bonds 5.90% series due June 1, 2021		18,200		18,200		18,200
Delmarva		First Mortgage Bonds 7.71% series due October 1, 2025		100,000		100,000		100,000
Delmarva		First Mortgage Bonds 6.05% series due June 1, 2032		15,000		15,000		15,000
Delmarva		Medium Term Notes Series A - 8.30% to 9.29%Due November 15, 2002 to November 1, 2004		100,000		8,500		0
Delmarva		Medium Term Notes Series B - 8.125% Due May 1, 2007		80,000		50,000		0
Delmarva		Medium Term Notes Series C - 6.59% to 7.72% Due October 1, 2002 to February 1, 2027		224,200		83,500		0
Delmarva		Electric Facilities Refunding Revenue Bonds 7.15% Series due July 1, 2011		1,000		1,000		1,000
Delmarva		Pollution Control Revenue Bonds 5.50% Series due July 1, 2025		15,000		15,000		0
Delmarva		Pollution Control Revenue Bonds 5.65% Series due July 1, 2028		16,240		16,240		0
Delmarva		Pollution Control Revenue Bonds 4.90% Series due May 1, 2026		34,500		34,500		0
Delmarva		Pollution Control Revenue Bonds 5.20% Series due February 1, 2019		31,000		31,000		0
Delmarva		Variable Rate Demand Bonds Due July 1, 2024		33,330		33,330		0
Delmarva		Variable Rate Demand Bonds Due October 1, 2017		26,000		26,000		26,000
Delmarva		Variable Rate Demand Bonds Due October 1, 2028		15,500		15,500		15,500
Delmarva		Variable Rate Demand Bonds Due October 1, 2029		30,000		30,000		30,000
Delmarva		Auction Rate Tax Exempt Bonds Due July 1, 2030 to Mat 1, 2032		78,400		78,400		0
Harmans Building Associates		Harmans Land Debt		6,141		6,141		0
PCI		Medium Term Notes Series B		50,500		50,500		0
PCI		Medium Term Notes Series C		19,000		19,000		0
PCI		Medium Term Notes Series D		241,000		241,000		0
PCI		Medium Term Notes Series E		900,000		126,250		0
PCI-BT Investing LLC		Zero Coupon Debt		2,359		2,359		0
Pepco		First Mortgage Bonds 7.50% Due March 15, 2028		40,000		40,000		40,000
Pepco		First Mortgage Bonds 7.38% Due September 15, 2025		75,000		75,000		75,000
Pepco		First Mortgage Bonds 7.25% Due July 1, 2023		100,000		100,000		100,000
Pepco		First Mortgage Bonds 6.88% Due October 15, 2024		75,000		75,000		75,000
Pepco		First Mortgage Bonds 6.88% Due September 1, 2023		100,000		100,000		100,000
Pepco		First Mortgage Bonds 6.50% Due March 15, 2008		78,000		78,000		78,000
Pepco		First Mortgage Bonds 6.50% Due September 15, 2005		100,000		100,000		100,000
Pepco		First Mortgage Bonds 6.25% Due October 15, 2007		175,000		175,000		175,000
Pepco		First Mortgage Bonds 5.88% Due October 15, 2008		50,000		50,000		50,000
Pepco		First Mortgage Bonds 5.63% Due October 15, 2003		50,000		50,000		50,000
Pepco		Medium Term Notes 7.64% Due January 17, 2007		35,000		35,000		35,000
Pepco		Medium Term Notes 7.00% Due January 15, 2024		50,000		50,000		50,000
Pepco		Medium Term Notes 6.25% Due January 20, 2009		50,000		50,000		50,000
Pepco		Pollution Control Revenue Bonds 6.38% Due January 15, 2023		37,000		37,000		37,000
Pepco		Pollution Control Revenue Bonds 6.00% Due September 1, 2022		30,000		30,000		30,000
Pepco		Pollution Control Revenue Bonds 5.75% Due March 15, 2010		16,000		16,000		16,000
Pepco		Pollution Control Revenue Bonds 5.38% Due February 15, 2024		42,500		42,500		42,500
Pepco		Pollution Control Revenue Bonds 5.38% Due February 15, 2024		38,300		38,300		38,300
PHI		7.45% Notes Due August 15, 2032		250,000		250,000		0
PHI		5.50% Notes Due August 15, 2007		500,000		500,000		0
PHI		6.45% Notes Due August 15, 2012		750,000		750,000		0
Potomac Equipment Leasing		Basell Rail Car Debt		19,140		19,140		0
Thermal Energy Limited Partnership I		Series 1997 Thermal Energy Facilities Revenue Bonds Due December 1, 2031		18,500		18,500		0
Thermal Energy Limited Partnership I		Series 1995 Thermal Energy Facilities Revenue Bonds Due December 1, 2009		12,500		12,500		0

CAPITAL STOCK
b)	For each class of capital stock including certificates of beneficial interest give information both in number of shares and in dollar amounts: (Do not include any warrants, options, or other securities reported under paragraph 8(d).)

AS OF SEPTEMBER 30, 2002
Col. A	Col. B	Col. C	Col. D	Col. E	Col. F	Col. G	Col. H	Col. I	Col. J
Name of Issuer	Title of Issue	Amount Authorized	Amount Reserved for options, warrants, conversions and other rights	Additional Amount Unissued	Amount Issued	Liquidating Value if Different from Par Value	Amount Reaquired by Issuer and Available for Resale	Amount (%) Pledged by Registrant or Subsidiaries	Amount (%) Owned by Registrant and Other Subsidiaries
ACE	Common stock, par value $3 per share	25,000,000	0	6,679,063	18,320,937	N/A	NONE	NONE	100
ACE	Cumulative Preferred stock, par value $100 per share	799,979	0	770,929	29,050	N/A	NONE	NONE	0
ACE	Preferred stock, no par value	2,000,000	0	1,966,745	33,255	N/A	NONE	NONE	0
ACE	Preference stock, no par value	3,000,000	0	3,000,000	0	N/A	NONE	NONE	N/A
ACE REIT, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Aircraft International Management Company	Common Stock, par value $1 per share	10,000	0	0	10,000	N/A	NONE	NONE	99
American Energy Corporation	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
American-LB Energy Partnership	Joint Venture	N/A	N/A	N/A	N/A	N/A	NONE	NONE	50
AMP Funding, LLC	Common Stock	3	0	0	3	N/A	NONE	NONE	100
AMP Funding, LLC	Class A Preferred, $6,311,880 par value per share	1	0	0	1	N/A	NONE	NONE	100
AMP Funding, LLC	Class B Preferred	10	0	10	0	N/A	NONE	NONE	N/A
ATE Investment, Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
Atlantic Capital I	Common Securities	86,598	0	0	86,598	N/A	NONE	NONE	100
Atlantic Capital I	8.25% Quarterly Income Preferred Securities	2,800,000	0	0	2,800,000	N/A	NONE	NONE	0
Atlantic Capital II	Common Securities	30,298	0	0	30,298	N/A	NONE	NONE	100
Atlantic Capital II	7 3/8% Cumulative Trust Preferred Capital Securities	1,000,000	0	0	1,000,000	N/A	NONE	NONE	0
Atlantic City Electric Company Transition Funding LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Atlantic Generation, Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
Atlantic Jersey Thermal Systems, Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
Atlantic Southern Properties, Inc.	Common Stock, par value $1 per share	100	0	0	100	N/A	NONE	NONE	100
ATS Operating Services, Inc.	Common Stock, no par value	100	0	50	50	N/A	NONE	NONE	100
Binghamton General, Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
Binghamton Limited, Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
CAG	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Carbon Composite, LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	50
CDG	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
CMM	Common Stock, par value $1 per share	1,000	0	1,000	0	N/A	NONE	NONE	100
Conectiv	Common stock, par value $.01 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Conectiv Bethlehem, LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	100	100
Conectiv Communica- tions, Inc.	Common Stock, par value $1 per share	1,000	0	900	100	N/A	NONE	NONE	100
Conectiv Communica- tions, Inc.	Preferred Stock, par value $.01 per share	1,000	0	750	250	N/A	NONE	NONE	100
Conectiv Communica-tions, Inc.	Class B Common Stock, par value $1 per share	1,000	0	667	333	N/A	NONE	NONE	100
Conectiv Energy Holding Company	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Conectiv Energy Supply, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Conectiv Operating Services Company	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Conectiv Plumbing, L.L.C.	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Conectiv Properties and Investments, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Conectiv Services, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Conectiv Solutions LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Conectiv Thermal Systems, Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
CPG	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
DCI II, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
DCTC - Burney Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Delmarva	Common stock, par value $2.25 per share	1,000,000	0	999,000	1,000	N/A	NONE	NONE	100
Delmarva	Preferred stock, par value $100 per share	1,800,000	0	1,583,302	216,698	N/A	NONE	NONE	100
Delmarva	Preferred stock, par value $25 per share	3,000,000	0	2,683,500	316,500	N/A	NONE	NONE	100
Delmarva	Preferred stock, $1 par value	10,000,000	0	10,000,000	0	N/A	NONE	NONE	0
Delmarva Power Financing 1	Common Securities	86,600	0	0	86,600	N/A	NONE	NONE	100
Delmarva Power Financing I	8.125% Cumulative Trust Preferred Capital Securities	2,800,000	0	0	2,800,000	N/A	NONE	NONE	0
Edison Capital Reserves Corporation	Common Stock, par value $.01 per share	100	0	0	100	N/A	NONE	NONE	100
Edison Place LLC	Capital Contribution	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Electro Ecology, Inc.	Common Stock, No Par Value	200	0	76	124	N/A	NONE	NONE	50
Energy and Telecommunications Services, LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Engineered Services, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Fauquier Landfill Gas, LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	75
Friendly Skies, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
G&L Mechanical Services, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Harmans Building Associates	Capital Contribution	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
King Street Assurance, Ltd.	Common Stock, par value $1 per share	120,000	0	0	120,000	N/A	NONE	NONE	100
KJC Operating Company	Common Stock, book value $1 per share	10,000	0	9,000	1,000	N/A	NONE	NONE	100
Kramer Junction Company	Utility common stock, book value $10 per share	250,000	0	194,157	55,843	N/A	NONE	NONE	30.6
Linpro Harmans Land LTD Partnership	Joint Venture	N/A	N/A	N/A	N/A	N/A	NONE	NONE	50
MET Electrical Testing Company	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Nextgate, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
PCI	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
PCI Air Management Corporation	Capital Stock, par value $1 per share	2,500	0	1,500	1,000	N/A	NONE	NONE	100
PCI Air Management Partners, LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
PCI Energy Corporation	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
PCI Engine Trading, Ltd	Common Stock, par value $1 per share	12,000	0	0	12,000	N/A	NONE	NONE	100
PCI Ever, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
PCI Holdings, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
PCI Netherlands Corporation	Capital Stock, par value $1 per share	2,500	0	1,500	1,000	N/A	NONE	NONE	100
PCI Nevada Investments	Partner Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
PCI Queensland Corporation	Capital Stock, par value $1 per share	2,500	0	1,500	1,000	N/A	NONE	NONE	100
PCI-BT & BCR-BT Ventures	Joint Venture	N/A	N/A	N/A	N/A	N/A	NONE	NONE	55
PCI-BT Investing, LLC	Common	500,000	0	219,325.75	280,674.25	N/A	NONE	NONE	94.99
PCI-BT Investing, LLC	Class A Preferred, $100 par value per share	93,558.10	0	0	93,558.10	N/A	NONE	NONE	93.99
PCI-BT Ventures	Joint Venture	N/A	N/A	N/A	N/A	N/A	NONE	NONE	90.91
Pedrick Gen., Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
Pepco Building Services, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Pepco Communica- tions, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Pepco Communica- tions, LLC	Capital Contribution	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Pepco Energy Company	Capital Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Pepco Energy Services, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Pepco Enterprises, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Pepco Technologies, LLC	Capital Contribution	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
PepMarket.com, LLC	Capital Contribution	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
PES Home Services of Virginia, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
PES Landfill Gas Corporation	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
PHI Service Company	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
POM Holdings, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Potomac Aircraft Leasing Corporation	Capital Stock, par value $1 per share	2,500	0	1,500	1,000	N/A	NONE	NONE	100
Potomac Capital Joint Leasing Corporation	Common Stock, par value $1 per share	2,000	0	0	1,334	N/A	NONE	NONE	100
Potomac Capital Markets Corporation	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Potomac Delaware Leasing Corporation	Common Stock, par value $1 per share	1,000	0	348.65	651.35	N/A	NONE	NONE	100
Potomac Electric Power Company	Common Stock, par value $.01 per share	200,000,000	0	199,900,000	100	N/A	NONE	NONE	100
Potomac Electric Power Company	Serial Preferred Stock, $2.44 Series of 1957, $50 par value per share	300,000	0	60,359	239,641	$51 per share for voluntary liquidation; $50 per share for involuntary liquidation	NONE	NONE	0
Potomac Electric Power Company	Serial Preferred Stock, $2.46 Series of 1958, $50 par value per share	300,000	0	126,108	173,892	$51 per share for voluntary liquidation; $50 per share for involuntary liquidation	NONE	NONE	0
Potomac Electric Power Company	Serial Preferred Stock, $2.28 Series of 1965, $50 par value per share	400,000	0	108,241	291,759	$51 per share for voluntary liquidation; $50 per share for involuntary liquidation	NONE	NONE	0
Potomac Electric Power Company	Serial Preferred Stock, $3.40 Series of 1992, $50 par value per share	1,000,000	0	50,000	950,000	N/A	NONE	NONE	0
Potomac Electric Power Company	Serial Preferred Stock, (undesignated as to series)	7,750,000	0	7,750,000	0	N/A	NONE	NONE	N/A
Potomac Electric Power Company Trust I	7 3/8% Trust Originated Preferred Securities	5,000,000	0	0	5,000,000	N/A	NONE	NONE	0
Potomac Electric Power Company Trust I	Common Securities	154,639.2	0	0	154,639.2	N/A	NONE	NONE	100
Potomac Equipment Leasing Corporation	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Potomac Harmans Corporation	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Potomac Leasing Associates, LP	Partner Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Potomac Nevada Corporation	Capital Stock, par value $1 per share	2,500	0	1,500	1,000	N/A	NONE	NONE	100
Potomac Nevada Investment, Inc.	Capital Stock, par value $1 per share	2,500	0	1,500	1,000	N/A	NONE	NONE	100
Potomac Nevada Leasing Corporation	Capital Stock, par value $1 per share	2,500	0	1,500	1,000	N/A	NONE	NONE	100
Potomac Power Resources, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Ramp Investments, LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Seaboard Mechanical Services, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Severn Cable, LLC	Capital Contribution	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Severn Construction, LLC	Capital Contribution	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Starpower Communica- tions, LLC	Member Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	50
Substation Test Company, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Thermal Energy Limited Partnership I	Partner Interest	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100
Unitemp, Inc.	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
Vineland General, Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
Vineland Limited, Inc.	Common Stock no par value	2,500	0	2,400	100	N/A	NONE	NONE	100
W.A. Chester Corporation	Common Stock, par value $1 per share	1,000	0	0	1,000	N/A	NONE	NONE	100
W.A. Chester, LLC	Capital Contribution	N/A	N/A	N/A	N/A	N/A	NONE	NONE	100

CONTINGENT LIABILITIES

A brief outline of the nature and amount of each contingent liability on account of endorsement or other guarantees of any securities.

Information regarding contingent liabilities is set forth in the following documents, the applicable portions of which are hereby incorporated by reference: Note 5 in Part 1. Financial Information, in Pepco's quarterly report on Form 10-Q for the period ended June 30, 2002 (File No. 1-1072); Note 11 in Part 1, Financial Information, in Conectiv's quarterly report on Form 10-Q for the period ended June 30, 2002 (File No. 1-13895); Note 8 in Part 1, Financial Information, in ACE's quarterly report on Form 10-Q for the period ended June 30, 2002 (File No. 1-3559); and Note 7 in Part 1. Financial Information, in Delmarva's quarterly report on Form 10-Q for the period ended June 30, 2002 (File No. 1-1405). Information regarding guarantees as of September 30, 2002 is detailed below:

Issuer of Guarantee	Issued on Behalf of	Amount ($000)	Type of Guarantee
Conectiv	CES	89,755	Payment
Conectiv	CMM	38,471	Performance
Conectiv	PHISCO	4,734	Payment
Conectiv	CES	4,486	Payment
Conectiv	Vineland Cogen. Limited Partnership	4,502	Performance
Conectiv	DCTC-Burney, Inc.	14,700	Payment
PCI	PES	41,286	Performance
PCI	Aircraft International Management Company	3,171	Promissory Note
PCI	PCI Air Management Partners LLC	2,359	Payment/Performance
PCI	Starpower Communications LLC	7,010	Performance
PHI	PES	58,961	Payment
PHI	PES	8,398	Performance
PHI	ATS Operating Services, Inc.	400	Letter of Credit
PHI	Conectiv	1,175	Letter of Credit
PHI	Conectiv Bethlehem LLC	26,728	Letter of Credit
PHI	Conectiv Energy Holding Company	250	Letter of Credit
PHI	CES	44,055	Letter of Credit
PHI	Atlantic Generation, Inc.	6,000	Letter of Credit
PHI	ACE / Delmarva	1,600	Letter of Credit
PHI	CDG	23,441	Letter of Credit
PHI	CMM	1,627	Letter of Credit
PHI	CDG / Conectiv Operating Services Company	365	Letter of Credit
PHI	Thermal Energy L.P.I	31,000	Letter of Credit
PHI	Money Pool Depositors	292,810	Money Pool Guarantee

OTHER SECURITIES

A statement of the amount of warrants, rights, or options and of any class of securities of the registrant and subsidiary companies not elsewhere herein described which is outstanding and/or authorized. A brief description of the provisions thereof should be included. Information need not be set forth under this item as to notes, drafts, bills of exchange or bankers' acceptances which mature within nine months.

Certain information regarding the Pepco Holdings, Inc. Shareholder Dividend Reinvestment Plan is set forth in the Registration Statement of PHI on Form S-3 (File No. 333-89938), and is hereby incorporated by reference. Certain information regarding the Potomac Electric Power Company Savings Plan for Exempt Employees, the Potomac Electric Power Company Savings Plan for Bargaining Unit Employees and the Potomac Electric Power Company Savings Plan for Non-Bargaining Unit, Non Exempt Employees is set forth in the Registration Statement of PHI on Form S-8 (File No. 333-96687) and is hereby incorporated by reference. Certain information regarding the Pepco Holdings, Inc. Long-Term Incentive Plan, the Pepco Holdings, Inc. Stock Compensation Plan for Directors, the Potomac Electric Power Company Long-Term Incentive Plan and the Conectiv Incentive Compensation Plan is set forth in the Registration Statement of PHI on Form S-8, as amended (File No. 333-96675) and is hereby incorporated by reference. Certain information regarding the Conectiv Savings and Investment Plan and the Atlantic Electric 401 (k) Savings and Investment Plan-B is set forth in the Registration Statement of PHI on Form S-8 (File No. 333-96673) and is hereby incorporated by reference

INVESTMENTS IN SYSTEM SECURITIES

Give a tabulation showing the principal amount, par or stated value, the cost to the system company originally acquiring such security, and the number of shares or units, of each security described under Item 8 that is held by the registrant and by each subsidiary company thereof as the record (or beneficial) owner, and the amounts at which the same are carried on the books of each such owner. This information should be given as of the same date as the information furnished in answer to Item 8.

AS OF SEPTEMBER 30, 2002

Name of Company	Number of Common Shares Owned	% of Voting Power	Issuer Book Value ($000)
ACE	18,320,937	100	626,437
ACE REIT, Inc.	1,000	100	86,597
Aircraft International Management Company	10,000	99	284,169
Aircraft Leasing Associates, LP	N/A	9.78	0
American Energy Corporation	1,000	100	1,096
American-LB Energy Partnership	N/A	50	0
AMP Funding, LLC	3	100	295,622
ATE Investment, Inc.	100	100	(229)
Atlantic Capital I	N/A	100	2,165
Atlantic Capital II	N/A	100	773
Atlantic City Electric Company Transition Funding LLC	N/A	100	0
Atlantic Generation, Inc.	100	100	(1,683)
Atlantic Jersey Thermal Systems, Inc.	100	100	116
Atlantic Southern Properties, Inc.	100	100	(883)
ATS Operating Services, Inc.	50	100	0
Binghamton General, Inc.	100	100	239
Binghamton Limited, Inc.	100	100	415
CAG	N/A	100	95,740
Carbon Composite, LLC	N/A	50	0
CDG	1,000	100	47,028
CMM	1,000	100	(5,308)
Conectiv	1,000	100	1,342,407
Conectiv Bethlehem, LLC	N/A	100	(9,256)
Conectiv Communications, Inc.	100	100	38,270
Conectiv Energy Holding Company	1,000	100	671,314
Conectiv Energy Supply, Inc.	1,000	100	82,882
Conectiv Operating Services Company	1,000	100	13,328
Conectiv Plumbing, LLC	N/A	100	0
Conectiv Properties and Investments, Inc.	1,000	100	20,220
Conectiv Services, Inc.	1,000	100	13,089
Conectiv Solutions LLC	N/A	100	21,629
Conectiv Thermal Systems, Inc.	100	100	1,052
CPG	1,000	100	50,327
DCI II, Inc.	1,000	100	14,358
DCTC - Burney, Inc.	1,000	100	12,354
Delmarva	1,000	100	580,861
Delmarva Power Financing I	N/A	100	2,165
Edison Capital Reserves Corporation	100	100	114,447
Edison Place LLC	N/A	100	5,312
Electro Ecology, Inc.	62	50	0
Energy and Telecommunications Services, LLC	N/A	100	1,142
Engineered Services, Inc.	1,000	100	8,494
Fauquier Landfill Gas, LLC	N/A	75	0
Friendly Skies, Inc.	1,000	100	7,671
G&L Mechanical Services, Inc.	1,000	100	313
Harmans Building Associates	N/A	100	6,527
King Street Assurance Ltd.	120,000	100	67,740
KJC Operating Company	1,000	100	0
Kramer Junction Company	96,687.9	26.5	0
Linpro Harmans Land LTD Partnership	N/A	100	0
MET Electrical Testing Company, Inc.	1,000	100	4,389
Nextgate, Inc.	1,000	100	(673)
PCI	1,00	100	208,718
PCI Air Management Corporation	1,000	100	8,935
PCI Air Management Partners, LLC	N/A	100	213,772
PCI Energy Corporation	1,000	100	(5,045)
PCI Engine Trading, Ltd	12,000	100	190,900
PCI Ever, Inc.	1,000	100	2,846
PCI Holdings, Inc.	1,000	100	294,078
PCI Netherlands Corporation	1,000	100	116,610
PCI Nevada Investments	N/A	100	311,078
PCI Queensland Corporation	1,000	100	160,526
PCI-BT & BCR-BT Ventures	N/A	55	2,894
PCI-BT Investing, LLC	N/A	100	43,769
PCI-BT Ventures	N/A	90.91	2,894
Pedrick Gen., Inc.	100	100	9,554
Pepco Building Services, Inc.	1,000	100	1,812
Pepco Communications, Inc.	1,000	100	173,486
Pepco Communications, LLC	N/A	100	163,345
Pepco Energy Company	1,000	100	1
Pepco Energy Services, Inc.	1,000	100	53,823
Pepco Enterprises, Inc.	1,000	100	14,808
Pepco Technologies, LLC	N/A	100	(112)
PepMarket.com, LLC	N/A	100	0
PES Home Services of Virginia, Inc.	1,000	100	3
PES Landfill Gas Corporation	1,000	100	0
PHISCO	1,000	100	(442)
POM Holdings, Inc.	1,000	100	0
Potomac Aircraft Leasing Corporation	1,000	100	18,131
Potomac Capital Joint Leasing Corporation	1,334	100	790,186
Potomac Capital Markets Corporation	1,000	100	16,423
Potomac Delaware Leasing Corporation	651.35	100	300,521
Potomac Electric Power Company	100	100	988,600
Potomac Electric Power Company Trust 1	N/A	100	3,866
Potomac Equipment Leasing Corporation	1,000	100	93,372
Potomac Harmans Corporation	1,000	100	1,991
Potomac Leasing Associates, LP	N/A	100	219,099
Potomac Nevada Corporation	1,000	100	1,195,925
Potomac Nevada Investment, Inc.	1,000	100	25,553
Potomac Nevada Leasing Corporation	1,000	100	16,681
Potomac Power Resources, Inc.	1,000	100	50,700
Ramp Investments, LLC	N/A	100	234,786
Seaboard Mechanical Services, Inc.	1,000	100	2,229
Severn Cable, LLC	N/A	100	1,351
Severn Construction, LLC	N/A	100	21
Starpower Communications, LLC	N/A	50	145,672
Substation Test Company, Inc.	1,000	100	1,535
Thermal Energy Limited Partnership I	N/A	100	7,541
Unitemp, Inc.	1,000	100	836
Vineland General, Inc.	100	100	258
Vineland Limited, Inc.	100	100	2,587
W.A. Chester Corporation	1,000	100	3
W.A. Chester, LLC	N/A	100	6,567

INVESTMENTS IN OTHER COMPANIES

10.

Give a tabulation showing all investments of the registrant and of each subsidiary thereof in holding companies and in public utility companies which are not subsidiary companies of the registrant. Also show all other investments of the registrant and of each subsidiary thereof in the securities of any other enterprise, if the book value of the investment in any such enterprise exceeds 2% of the total debit accounts shown on the balance sheet of the company owning such investment or an amount in excess of $25,000 (whichever amount is the lesser). Give principal amount and number of shares or units and the cost of each issue of such securities to the system company originally acquiring such security, and amount at which carried on the books of the owner. List all such securities pledged as collateral for loans or other obligations and identify loans and obligations for which pledged. This information should be given as of the same date as the information furnished in answer to Item 8.

Investing Company	Company Invested In	Number and Type of Shares	Book Value of Investment as of 9/30/02 ($000)
ATE Investment, Inc.	Black Light Power, Inc.	240 Shares of Common	0
Atlantic Generation, Inc.	Energy Investors Fund III, L.P.	4.9% Limited Partner Interest	4,020
CMM	Energy Systems North East, LLC	50% Member Interest	689
Conectiv	Tech Leaders II, L.P.	2.6% Limited Partner Interest	140
Conectiv	SciQuest.com, Inc.	106,811 Shares of Common	66
Conectiv	Internet Capital Group, Inc.	89,837 Shares of Common	17
Conectiv	Adolor Corp.	19,398 Shares of Common	272
Conectiv Properties and Investments, Inc.	UAH-Hydro Kennebec, L.P.	27.5% Limited Partner Interest	2,115
Conectiv Properties and Investments, Inc.	Luz Solar Partners, Ltd., IV	4.779% Limited Partner Interest	1,779
Conectiv Solutions LLC	Millennium Account Services, LLC	50% Member Interest	1,134
DCTC-Burney, Inc.	Forest Products, L.P.	1% General Partner Interest	2,247 ⁽¹⁾
DCTC-Burney, Inc.	Burney Forest Products, A Joint Venture	55.56% General Partner Interest (Forest Products, L.P. also holds a 44.54% General Partner Interest)	2,247 ⁽¹⁾
King Street Assurance Ltd.	Enertech Capital Partners, L.P.	94% Limited Partner Interest	5,872
King Street Assurance Ltd.	Enertech Capital Partners, II, L.P.	11% Limited Partner Interest	5,238
King Street Assurance Ltd.	Pac-West Telecomm, Inc	294,584 Shares of Common	78
King Street Assurance Ltd.	Capstone Turbine Corporation	790,838 Shares of Common	467
PCI	LUZ Solar Partners, Ltd. III	22.3% Partner Interest	0
PCI	LUZ Solar Partners, Ltd. IV	10% Partner Interest	0
PCI	LUZ Solar Partners, Ltd. V	19.22 % Partner Interest	2
PCI	LUZ Solar Partners, Ltd. VI	31.33% Partner Interest	5
PCI	LUZ Solar Partners, Ltd. VII	24.5% Partner Interest	10
Pepco	Microcell Corp.	476,190 Shares of Preferred B	1,000
Potomac Capital Joint Leasing Corporation	Central Illinois Light Co.	35,000 Shares of Preferred	3,352
Potomac Capital Joint Leasing Corporation	Cleveland Electric Illuminating	1,665 Shares of Preferred	1,658
Potomac Capital Joint Leasing Corporation	Gulf States Utilities	30,475 Shares of Preferred	3,037
Potomac Capital Joint Leasing Corporation	Kentucky American Water	8,400 Shares of Preferred	832
Potomac Capital Joint Leasing Corporation	Nicor, Inc.	18,000 Shares of Preferred	790
Potomac Capital Joint Leasing Corporation	Northwest Natural Gas	92,500 Shares of Preferred	9,247
Potomac Capital Joint Leasing Corporation	Pacificorp	54,090 Shares of Preferred	5,409
Potomac Capital Joint Leasing Corporation	Rochester Gas & Electric	60,000 Shares of Preferred	5,998
Potomac Capital Joint Leasing Corporation	Southern Cal Edison	108,000 Shares of Preferred	10,608
Potomac Capital Joint Leasing Corporation	UGI Corp.	20,000 Shares of Preferred	2,000
Potomac Capital Joint Leasing Corporation	Vermont Public Service	44,216 Shares of Preferred	4,422
Potomac Capital Joint Leasing Corporation	Avista Corp.	107,825 Shares of Preferred	10,717

Investing Company	Company Invested In	Number and Type of Shares	Book Value of Investment as of 9/30/02 ($000)
Potomac Capital Joint Leasing Corporation	Whirlpool Financial	4,000 Shares of Preferred	401
Potomac Capital Joint Leasing Corporation	Freddie Mac	150,000 Shares of Preferred	7,500
Potomac Capital Joint Leasing Corporation	San Diego Gas & Electric	30,000 Shares of Preferred	821
PCI Holdings, Inc.	Duke Power	30,376 Shares of Preferred	3,062
PCI Holdings, Inc.	Louisville Gas & Electric	43,100 Shares of Preferred	4,310
PCI Holdings, Inc.	Pacific Gas & Electric	727,900 Shares of Preferred	17,713
PCI Holdings, Inc.	Puget Sound	88,038 Shares of Preferred	9,022
PCI	BT Capital Funding Corp.	39.2 Shares of Preferred	9,812
PCI Ever, Inc.	BT Ever	2.8 Shares of Preferred	2,178
PCI	Echapman.com, Inc.	60,001 Shares of Common	218
PCI	Corvis	535,761 Shares of Common	770
PES	Viron/Pepco Services Partnership	50% Partnership Interest	3,392
PES	Trigen/Pepco Energy Services Partnership, LLC	50% Partnership Interest	2,306
Atlantic Generation, Inc.	Cogeneration Partners of America	50% Partnership Interest	696
Vineland Limited, Inc. and Vineland General, Inc.	Vineland Cogeneration Limited Partnership	455 Limited Partnership Interest (Vineland General, Inc. also owns a 5% General Partnership Interest)	1,372
^{(1) Represents combined book value of Forest Products, L.P. and Burney Forest Products, A Joint Venture.}

INDEBTEDNESS OF SYSTEM COMPANIES
11.	List each indebtedness of the registrant and of each subsidiary company thereof (other than indebtedness reported under Item 8, but as of the same date) where the aggregate debt owed by any such company to any one person exceeds $25,000 or an amount exceeding 2% of the total of the debit accounts shown on the balance sheet of the debtor (whichever amount is the lesser) but not including any case in which such aggregate indebtedness is less than $5,000, and give the following additional information as to each such indebtedness:
a)		Debts owed to associate companies at September 30, 2002: The following table provides inter-company receivables and payables as of September 30, 2002:

Name of Debtor	Name of Creditor	Amount Owed ($000)	Rate of Interest	Date of Maturity
ACE	CAG	141	N/A	N/A
ACE	Atlantic Southern Properties, Inc	155	N/A	N/A
ACE	PHISCO	10,116	N/A	N/A
ACE	PHI	28	N/A	N/A
ATE Investment, Inc.	PHISCO	25	N/A	N/A
Atlantic Generation, Inc.	PHISCO	48	N/A	N/A
Atlantic Generation, Inc.	Binghamton General, Inc.	146	N/A	N/A
Atlantic Generation, Inc.	Binghamton Limited, Inc.	355	N/A	N/A
Atlantic Generation, Inc.	Pedrick General, Inc.	8,358	N/A	N/A
Atlantic Generation, Inc.	Vineland General, Inc.	116	N/A	N/A
Atlantic Generation, Inc.	Vineland Limited, Inc.	1,427	N/A	N/A
Atlantic Jersey Thermal Systems, Inc.	Conectiv Thermal Systems, Inc.	643	N/A	N/A
Atlantic Southern Properties, Inc	PHISCO	91	N/A	N/A
ATS Operating Services, Inc.	Conectiv Thermal Systems, Inc.	2,536	N/A	N/A
CAG	PHISCO	3,523	N/A	N/A
CDG	PHISCO	1,888	N/A	N/A
CDG	Delmarva	274	N/A	N/A
CES	CDG	9,218	N/A	N/A
CES	ACE	1,501	N/A	N/A
CES	PHISCO	423	N/A	N/A
CMM	PHISCO	247	N/A	N/A
CMM	Conectiv Energy Holding Company	229	N/A	N/A
Conectiv	PHISCO	1,223	N/A	N/A
Conectiv Bethlehem, LLC	PHISCO	1,079	N/A	N/A
Conectiv Bethlehem, LLC	Conectiv Energy Holding Company	591	N/A	N/A
Conectiv Bethlehem, LLC	CMM	252	N/A	N/A
Conectiv Bethlehem, LLC	PHISCO	496	N/A	N/A
Conectiv Energy Holding Company	PHISCO	1,056	N/A	N/A
CES	PHI	74	N/A	N/A
CES	CAG	1,615	N/A	N/A
CES	Conectiv Energy Holding Company	229	N/A	N/A
Conectiv Operating Services Company	PHISCO	1,491	N/A	N/A
Conectiv Properties and Investments, Inc.	PHISCO	321	N/A	N/A
Conectiv Services, Inc.	PHISCO	31	N/A	N/A
Conectiv Thermal Systems, Inc.	PHISCO	405	N/A	N/A
Conectiv Thermal Systems, Inc.	Conectiv Operating Services Company	271	N/A	N/A
CPG	PHISCO	78	N/A	N/A
Delmarva	CAG	47	N/A	N/A
Delmarva	ACE	1,082	N/A	N/A
Delmarva	Conectiv Properties and Investments, Inc.	110	N/A	N/A
Delmarva	CES	20,517	N/A	N/A
Delmarva	PHISCO	9,841	N/A	N/A
Delmarva	Conectiv	319	N/A	N/A
Delmarva	PHI	28	N/A	N/A
PCI	PES	170	N/A	N/A
PCI	PHISCO	37	N/A	N/A
Pedrick Gen., Inc.	PHISCO	149	N/A	N/A
Pepco	PHI	92	N/A	N/A
PES	Pepco	648	N/A	N/A
PES	PHISCO	126	N/A	N/A
PES	CES	946	N/A	N/A
PES	Delmarva	171	N/A	N/A
PHISCO	Conectiv Solutions LLC	39	N/A	N/A
PHISCO	Conectiv Communications, Inc.	193	N/A	N/A
PHISCO	Pepco	550	N/A	N/A
Thermal Energy Limited Partnership I	Conectiv Thermal Systems, Inc.	84,389	N/A	N/A
Thermal Energy Limited Partnership I	ATS Operating Services, Inc.	2,542	N/A	N/A
Thermal Energy Limited Partnership I	PHISCO	394	N/A	N/A

The following table provides inter-company notes receivable/payable as of September 30, 2002:

Name of Debtor	Name of Creditor	Amount Owed ($000)	Rate of Interest (%)	Date of Maturity
Aircraft International Management Company	PCI	35,186	2.41	On demand
American Energy Corporation	PCI	13,667	2.41	On demand
AMP Funding, L.L.C.	RAMP Investments LLC	92	2.41	On demand
ATE Investment, Inc.	PHISCO (Money Pool)	29,832	2.41	On demand
Atlantic Generation, Inc.	PHISCO (Money Pool)	8,796	2.41	On demand
Atlantic Southern Properties, Inc.	PHISCO (Money Pool)	17,728	2.41	On demand
CDG	PHI	34,116	2.41	On demand
CMM	PHI	41,999	2.41	On demand
Conectiv	PHI	383,479	2.41	On demand
Conectiv Bethlehem LLC	Conectiv Energy Holding Company	341	2.41	On demand
Conectiv Communications, Inc.	Conectiv Solutions LLC	87,002	7.30	8/6/16
Conectiv Energy Holding Company	PHISCO (Money Pool)	341,901	2.41	On demand
Conectiv Properties and Investments, Inc.	PHISCO (Money Pool)	2,204	2.41	On demand
Conectiv Solutions LLC	Conectiv	100,568	7.30	5/21/11
Conectiv Solutions LLC	PHISCO (Money Pool)	6,167	2.41	On demand
Conectiv Thermal Systems, Inc.	Conectiv Communications, Inc.	100,568	7.30	5/1/11
Conectiv Thermal Systems, Inc.	PHISCO (Money Pool)	362	2.41	On demand
CPG	PHI	142,063	2.41	On demand
Edison Place LLC	PCI	86,665	2.41	On demand
Friendly Skies, Inc.	PCI	29	2.41	On demand
Nextgate, Inc.	PCI	673	2.41	On demand
PCI Air Management Corporation	PCI	722	2.41	On demand
PCI	PHISCO (Money Pool)	111,269	2.41	On demand
PCI	Pepco Capital Joint Leasing Corporation	931,972	2.41	On demand
PCI	Potomac Capital Markets Corporation	17,332	2.41	On demand
PCI	Potomac Leasing Corporation	5,472	2.41	On demand
PCI	Potomac Nevada Investments, Inc.	17,005	2.41	On demand
PCI	PCI Ever, Inc.	256	2.41	On demand
PCI	PCI Queensland Corporation	92,226	2.41	On demand
PCI	AMP Funding, L.L.C.	6,030	2.41	On demand
PCI	PCI-BT Investing, LLC	25,640	2.41	On demand
PCI	Potomac Delaware Leasing Corporation	57,755	2.41	On demand
PCI	Potomac Equipment Leasing Corporation.	5,315	2.41	On demand
PCI	PCI Netherlands Corporation	133,247	2.41	On demand
PCI	PCI Air Management Partners LLC	111,130	2.41	On demand
PCI	Edison Capital Reserves Corporation	110,000	4.00	12/31/03
PCI	PHI	150,000	7.535	9/25/14
PCI	PHI	150,000	7.535	9/30/14
PCI	Pepco Communications, Inc.	29,252	2.41	On demand
PCI Air Management Partners LLC	PCI Engine Trading Ltd.	350	2.41	On demand
PCI Air Management Partners LLC	PCI Air Management Corporation	2,382	2.41	On demand
PCI Energy Corp.	Pepco Capital Joint Leasing Corporation	1,050	2.41	On demand
PCI Energy Corp.	PCI	367	2.41	On demand
PCI Engine Trading Ltd.	PCI	1,460	2.41	On demand
PCI Holdings, Inc.	Aircraft International Management Company	130,180	2.41	On demand
PCI Holdings, Inc.	PCI	12,256	2.41	On demand
PCI Nevada Investments	Potomac Edison Leasing Corp.	72,000	2.41	On demand
Pepco Capital Joint Leasing Corporation	Aircraft International Management Company	218,580	2.41	On demand
Pepco Capital Joint Leasing Corporation	RAMP Investments LLC	27,731	2.41	On demand
Pepco Capital Joint Leasing Corporation	PCI Air Management Partners LLC	10,400	2.41	On demand
Pepco Capital Joint Leasing Corporation	Potomac Leasing Associates, LP	133,988	2.41	On demand
Pepco Capital Joint Leasing Corporation	PCI Air Management Corporation	1,283	2.41	On demand
Pepco Capital Joint Leasing Corporation	PCI Air Management Partners LLC	22,410	2.41	On demand
Pepco Capital Joint Leasing Corporation	PCI Holdings, Inc.	97,664	2.41	On demand
Pepco Capital Joint Leasing Corporation	PCI Ever, Inc.	35	2.41	On demand
Pepco Enterprises, Inc.	PCI	3,288	2.41	On demand
Pepco Technologies	PCI	29	2.41	On demand
PES	PHISCO (Money Pool)	34,050	2.41	On demand
PHISCO	PHISCO (Money Pool)	26,146	2.41	On demand
Potomac Aircraft Leasing Corporation	PCI	33,531	2.41	On demand
Potomac Harmans Corporation	PCI	248	2.41	On demand
Potomac Harmans Corporation	Potomac Nevada Corporation	1,626	2.41	On demand
Potomac Leasing Associates, LP	PCI	2,984	2.41	On demand
Potomac Leasing Associates, LP	Potomac Nevada Corporation	17,676	2.41	On demand
Potomac Nevada Corporation	Pepco Capital Joint Leasing Corporation	8,431	2.41	On demand
Potomac Nevada Corporation	Potomac Nevada Leasing Corporation	16,001	2.41	On demand
Potomac Nevada Corporation	PCI	52,142	2.41	On demand
Potomac Nevada Investment, Inc.	PCI	141,703	2.41	On demand
Potomac Nevada Investment, Inc.	PCI Netherlands Corporation	84,139	2.41	On demand
Potomac Nevada Leasing Corporation	PCI	2,393	2.41	On demand
RAMP Investments LLC	PCI	113,344	2.41	On demand
RAMP Investments LLC	PCI Air Management Partners LLC	9,533	2.41	On demand

b)		DEBTS OWED TO OTHERS:
See Item 8 for debts owed to others
PRINCIPAL LEASES
12.	Describe briefly the principal features of each lease (omitting oil and gas leases) to which the registrant or any subsidiary company thereof is a party, which involves rental at an annual rate of more than $50,000 or an amount exceeding 1% of the annual gross operating revenue of such party to said lease during its last fiscal year (whichever of such sums is the lesser) but not including any lease involving rental at a rate of less than $5,000 per year.

Lessee		Lessor	Items(s) Leased	Total 2001 Payments ($000)		Expiration Date
ACE		GUO MAO International Hotels B.V.	Scrubber at B.L. England	10,600		1/22/07
ACE		Atlantic Southern Properties	Office Space	425		2/28/03
ACE		Norfolk Southern Railway.	Railroad tank cars	316		12/31/04
ACE		Citgo Asphalt Refining Company	Fuel oil storage & throughput agreement- B.L. England Generating Station	297		9/1/03
ACE	BLC Corporation		Vehicles/equipment	482	Renewable every 12 months
ACE	Brian Callaghan		Office Space - Atlantic City Customer Courtesy Center	10	12/31/03
ACE	Towne Centre LTD		Office Space - Turnersville Customer Courtesy Center	13	4/30/04
ACE	Capitol View		Office Space - Trenton Office	18	9/30/04
ACE	Mac One		Office Space - Millville Customer Courtesy Center	20	3/31/04
ACE	SJS Tilton Times		Office Space - Pleasantville Customer Courtesy Center	20	8/31/05
CDG	Delmarva		Merrill Creek Reservoir	1,615	12/20/32
CES	Delaware Terminal Company		#6 Oil Tank Storage & Pipeline facility	554	Month to Month
Delmarva	Delmarva Services Company		Office Building	1,776	10/15/02
Delmarva	Various Railroads		Railroad Leases	341	Various
Delmarva	State of Delaware		River Crossing	77	8/28/26
Delmarva	Bell Atlantic - DE		Poles	556	Various
Delmarva	Bell Atlantic - MD		Poles	578	Various
Delmarva	Commissioners of St. Michael's		Poles	233	Various
Delmarva	Conectiv Properties and Investments, Inc.		Building	1,261	Month to month
Delmarva	BGE		Tower Lease	90	7/16/06
Delmarva	GBH Radio		Tower Lease	40	7/1/06
Delmarva	United Jersey Bank, Trustee		Merrill Creek Reservoir	3,785	12/20/32
Engineered Services, Inc.	Refiner Associates		Real Estate	112	12/05
Engineered Services, Inc.	Copier Lease		Office Equipment	5	8/04
Engineered Services, Inc.	Automotive Rentals Inc.		Vehicles	21	4/04-9/04
G&L Mechanical Services, Inc	Ford Lease		Vehicles	15	7/05-8/05
G&L Mechanical Services, Inc.	Daewoo		Equipment	6	5/06
G&L Mechanical Services, Inc.	Ford Motor Credit Corp.		Vehicle	7	6/05
MET Electrical Testing Company	Merit Properties, LLC		Office Space	63	5/08
MET Electrical Testing Company	North Suburban Land Co.		Office Space	29	3/04
MET Electrical Testing Company	Marcelene M. Schwegler		Office Space	16	10/03-3/04
MET Electrical Testing Company	Enterprise Fleet Services		Vehicles	37	6/03-12/04
MET Electrical Testing Company	GE Capital Fleet Services		Vehicles	13	1/04-5/04
MET Electrical Testing Company	IOS Capital		IOS Capital	16	2/06
MET Electrical Testing Company	Doble Engineering Co.		Doble Engineering Co.	29	3/03
PCI	TIAA of America		Office Space	1,004	3/31/05
PCI	Pitney-Bowes		Office Equipment	8	9/30/05
Pepco	BLC		Vehicles	2,264	9/02-9/07
Pepco	BLC		Computers	5,040	9/02/9/07
Pepco	BLC		Office Equipment	252	9/02-9/07
Pepco	Ford Motor Credit		Vehicles	54	9/02-12/03
Pepco	Storagetek Financial		Computer Equipment	303	8/04-6/06
Pepco	Levi, Ray & Shoup		Software	53	6/03-6/04
Pepco	IBM		Computer Equipment	1,118	4/03-1/05
Pepco	Ayaya Financial Services		Telephone Equipment	379	12/05-10/08
Pepco	OCE Printing Systems		Printing Equipment	247	6/30/07
Pepco	Williams Data Systems		Software	32	6/04
Pepco	Starpower Communications		Communications Equipment	49	5/03
Pepco	Edison Place LLC		Office Space	11,236	5/06-5/16
Pepco	Doggett's Parking Company		Parking Lot	600	5/16
Pepco	Atapco Properties		Office Space	38	9/04
Pepco	Canal Square		Office Space	88	9/04
Pepco	Phase 1 456 Associates		Substation	323	12/18
Pepco	F&B Limited Liability Company		Office Space	320	12/05
Pepco	Perkins Commercial Management		Office Space	473	6/03
Pepco	Larry D. Edwards, Trustee		Office Space	23	5/03
Pepco	State Circle Properties		Office Space	25	7/04
Pepco Building Services	William Groleau		Real Estate	28	3/07
PES	2000 K LLC		Office Space	176	12/02
PES	2000 K LLC		Office Space	60	12/02
PES	Cafritz		Office Space	798	10/04
PES	Canon		Office Equipment	35	4/07
PES	Darcars Fairfax Chrysler		Vehicle	6	10/04
PES	CIT Group		Office Furniture	110	2/05
PES	Equity Office Properties		Office Space	797	5/12
PES	Lawrence Hoynes		Office Space	7	5/03
PES	Merritt-CCP IV		Office Space	223	7/05
PES	Parkway Properties		Office Space	16	7/04
PES	Summerfield Village		Office Space	10	6/05
PES	Whalen Properties		Office Space	8	12/04
PES	Pitney Bowes		Office Equipment	9	12/05
PES	Canon		Office Equipment	16	11/06
PHISCO	Sardo & Sons		Warehouse Space	250	8/1/04
PHISCO	Hewlet Packard Financial Services		Computer Equipment (Servers)	No payments yet	Various 12/31/04 - 3/31/05
PHISCO	EMC Corporation		Computer Equipment (storage area network)	113	9/30/05
PHISCO	Delaware River & Bay Authority		Ground Lease - Carneys Point	99	6/30/18
PHISCO	King Street Associates		Office Space - 4 ^th & 5 ^th Floors, King Street	585	4/18/11
PHISCO	Xerox Business Services		Office Equipment	772	2/28/05
PHISCO	Canon Business Services		Office Equipment	124	8/6/06
Seaboard Mechanical Services, Inc.	Advantis Real Estate Service Co.		Office Space	8	8/04
Substation Test Company	4110 Forestville Road, LLC		Real Estate	88	5/06
Substation Test Company	GE Capital Fleet Services		Vehicle	6	6/04
Substation Test Company	Doble Equipment		Doble Equipment	14	3/03
Unitemp, Inc.	New Concepts Leasing, Inc.		Vehicles	44	6/03-4/05

SECURITIES SOLD

13.

If, during the last five years, the registrant or any subsidiary company thereof has issued, sold, or exchanged either publicly or privately any securities having a principal amount, par, stated or declared value exceeding $1,000,000 or exceeding an amount equal to 10% of the total liabilities as shown by the balance sheet of issuer at the time of such issue (whichever of such sums is the lesser), give the following information with respect to each such issue or sale:

Securities sold in five years ending September 30, 2002:

Title of Issue	Name of Obligor	Amount Issued or Sold ($000)	Proceeds Received by Issuer Before Expenses (per $100)	Approximate Expenses of Issuer (per $100)		Name of Principal Underwriter or Purchasers	Underwriters Initial Offering Price
Medium Term Notes Series A 7.52% Due April 2, 2007	ACE	5,000	5,000		1.61	Bank One Goldman Sachs Lehman Brothers	5,000
Medium Term Notes Series A 7.50% Due April 2, 2007	ACE	10,000	10,000		1.10	Lehman Brothers Bank One Goldman Sachs	10,000
Pollution Control Revenue Bonds Variable % Due April 15, 2014	ACE	18,200	18,200		1.82	Morgan Stanley Summit Bank	18,200
Pollution Control Revenue Bonds Variable $ Due July 15, 2017	ACE	4,400	4,400		5.98	Morgan Stanley Summit Bank	4,400
Medium Term Notes Series A 6.63% Due June 2, 2003	ACE	30,000	30,000		0.55	Lehman Brothers Goldman Sachs Bank One	30,000
Medium Term Notes Series D 6.19% Due January 17, 2006	ACE	50,000	50,000		0.63	Lehman Brothers Bank One Lehman Brothers	50,000
Medium Term Notes Series D 6.18% Due January 12, 2006	ACE	15,000	15,000		0.63	Bank One Goldman Sachs Lehman Brothers	15,000
Medium Term Notes Series D .00% Due January 15, 2003	ACE	20,000	20,000		0.58	Lehman Brothers Bank One Goldman Sachs	20,000
Trust Preferred Stock- QUIPS 7.38% Due December 31, 2028	Atlantic Capital II	25,000	25,000		5.29	Morgan Stanley Legg Mason Wheat First	25,000
Medium Term Notes Series A 6.73% Due June 1, 2006	Conectiv	250,000	250,000		0.60	Lehman Brother Bank One First Union CS First Boston	250,000
Medium Term Notes 5.30% Due June 1, 2005	Conectiv	250,000	250,000		0.53	Morgan Stanley Bank of America Fleet Securities	250,000
Medium Term Notes Series C 6.59% Due October 1, 2002	Delmarva	12,000	12,000		0.50	Morgan Stanley Merrill Lynch	12,000
Medium Term Notes Series C 6.75% Due October 1, 2006	Delmarva	20,000	20,000		0.60	Morgan Stanley Merrill Lynch	20,000
Medium Term Notes Series C 6.81% Due January 9, 2018	Delmarva	4,000	4,000		0.75	Morgan Stanley Merrill Lynch	4,000
Pollution Control Revenue Bonds 5.50% Due July 1, 2025	Delmarva	15,000	15,000		1.62	Morgan Stanley Bank of America	15,000
Pollution Control Revenue Bonds 5.65% Due July 1, 2028	Delmarva	16,240	16,240		1.63	Morgan Stanley Bank of America	16,240
Pollution Control Revenue Bonds 4.90% Due May 1, 2026	Delmarva	34,500	34,500		4.77	Morgan Stanley PNC Capital Markets	34,500
Pollution Control Revenue Bonds 5.20% Due February 1, 2019	Delmarva	31,000	31,000		4.41	Morgan Stanley Bank One	31,000
Pollution Control Revenue Bonds Variable % Due July 1, 2024	Delmarva	33,330	33,330		2.67	Morgan Stanley Bank of America	33,330
Exempt Facilities Revenue Bonds Auction Rate Due July 1, 2030	Delmarva	38,900	38,900		2.88	Morgan Stanley Bank of America		38,900
Exempt Facilities Revenue Bonds Auction Rate Due May 1, 2031	Delmarva	24,500	24,500		5.07	Morgan Stanley PNC Capital Markets		24,500
Exempt Facilities Revenue Bonds Auction Rate Due May 1, 2032	Delmarva	15,000	15,000		5.52	Morgan Stanley Bank One		15,000
Medium Term Notes Series C	PCI	5,000	5,000		0.56	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		5,000
Medium Term Notes Series C	PCI	4,000	4,000		0.55	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		4,000
Medium Term Notes Series C	PCI	10,000	10,000		0.55	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		10,000
Medium Term Notes Series D	PCI	10,000	10,000		0.52	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		10,000
Medium Term Notes Series D	PCI	19,000	19,000		0.63	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		19,000
Medium Term Notes Series D	PCI	57,000	57,000		0.49	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		57,000
Medium Term Notes Series D	PCI	2,000	2,000		0.40	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		2,000
Medium Term Notes Series D	PCI	38,000	38,000		0.52	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		38,000
Medium Term Notes Series D	PCI	20,000	20,000		0.63	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		20,000
Medium Term Notes Series D	PCI	7,000	7,000		0.54	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		7,000
Medium Term Notes Series D	PCI	6,000	6,000		0.62	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		6,000
Medium Term Notes Series D	PCI	13,000	13,000		0.47	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		13,000
Medium Term Notes Series D	PCI	26,000	6,000		0.52	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		26,000
Medium Term Notes Series D	PCI	10,000	10,000		0.52	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		10,000
Medium Term Notes Series D	PCI	50,000	50,000		0.52	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		50,000
Medium Term Notes Series D	PCI	225,000	225,000		0.30	Merrill Lynch & Co. Salomon Smith Barney Goldman Sachs & Co.		225,000
Medium Term Notes Series E	PCI	92,000	92,000		0.63	Merrill Lynch & Co. Salomon Smith Barney Bank of America.		92,000
Medium Term Notes Series E	PCI	34,250	34,250		0.53	Merrill Lynch & Co.		34,250
Adjustable Rate Pollution Control Revenue Bonds Due 6/1/27	Pepco	8,090	8,090		1.46	Goldman Sachs		8,090
6-1/4% First Mortgage Bonds Due 10/15/07	Pepco	175,000	175,000		0.92	Salomon Smith Barney Legg Mason Morgan Keen Oppenheimer Co.		174,738
6% First Mortgage Bonds Due 4/1/04	Pepco	270,000	270,000		1.83	Legg Mason Wood Walker A.G. Edwards Dain Rauscher Wessels Everen Securities Wheat First Union		270,000
7 3/8% TOPrS Due 6/1/38	Potomac Electric Power Company Trust I	125,000	125,000		3.66	Merrill Lynch A.G. Edwards Paine Webber Prudential Securities Salomon Smith Barney		125,000

AGREEMENT FOR FUTURE DISTRIBUTION OF SECURITIES
14.
a)		Summarize the terms of any existing agreement to which the registrant or any associate or affiliate company thereof is a party or in which any such company has a beneficial interest with respect to future distribution of securities of the registrant or of any subsidiary. Certain information regarding agreements with respect to future distribution of securities of PHI and its subsidiaries is set forth in the following documents, the applicable portions of which are hereby incorporated by reference: Item 1 of the Application/Declaration of PHI on Form U-1, as amended in File No. 70-9947; Registration Statement of PHI on Form S-3 with respect to the Pepco Holdings, Inc. Shareholder Dividend Reinvestment Plan in File No. 333-89938; the Registration Statement of PHI on Form S-8 with respect to the Potomac Electric Power Company Savings Plan for Exempt Employees, the Potomac Electric Power Company Savings Plan for Bargaining Unit Employees and the Potomac Electric Power Company Savings Plan for Non-Bargaining Unit, Non Exempt Employees in File No. 333-96687; the Registration Statement of PHI on Form S-8 with respect to the Pepco Holdings, Inc. Long-Term Incentive Plan, the Pepco Holdings, Inc. Stock Compensation Plan for Directors, the Potomac Electric Power Company Long-Term Incentive Plan and the Conectiv Incentive Compensation Plan in File No. 333-96675; the Registration Statement of PHI on Form S-8 with respect to the Conectiv Savings and Investment Plan and the Atlantic Electric 401(k) Savings and Investment Plan-B in File No. 333-96673 and the Registration Statement of PHI on Form S-3 with respect to the issuance of long-term debt and common stock in File No. 333-100478.
b)		Describe briefly the nature of any financial interest (other than the ownership of securities acquired as a dealer for the purpose of resale) which any person with whom such agreement exists, has in the registrant or in any associate or affiliate company thereof. The beneficiaries of the employee benefit plans referred to above may be deemed to have a financial interest in the registrant or associate or affiliate companies thereof by virtue of their employment relationship with the registrant or such other companies and compensation, benefit and severance agreements and arrangements relating to such employment.
TWENTY LARGEST HOLDERS OF CAPITAL STOCKS
15.	As of a recent date (indicating such date for each class) give the following information with respect to the holders of each class of stock and/or certificates of beneficial interest of the registrant:
a)		The twenty largest registered holders of Common Stock and Class A Stock, as of its most recent dividend record date: Conectiv shares can be held by certificate, through dividend reinvestment plans, through employee investment plans, through investment companies, and other street name and nominee accounts. Absent an unreasonable expenditure of time and money, Conectiv has no way to determine the number of shares held by each holder of beneficial interest. Accordingly, Conectiv is only able to provide information as to shares registered with Conectiv. The following table sets forth PHI's twenty largest registered shareholders on the books as of September 10, 2002:

Shareholder Name and Address	Shares Held	% of Outstanding Shares
Cede & Co Box 20 Bowling Green Station New York, NY 10274	111,007,609	76.63
Potomac Electric Power Company Administrator Shareholder Dividend-Reinvestment Plan 701 Ninth Street, NW, Suite 5239 Washington, DC 20068	21,738,300	14.99
Fidelity Management Trust Company As Trustee FBO Pepco Retirement Savings Plan Master Trust Fidelity Mgmt Trust Co 82 Devonshire Street Boston, MA 02109	4,363,874	3.01
Potomac Electric Power Co Long-Term Incentive Plan C-O Manager Payroll & Benefits Accounting 701 Ninth Street NW Washington, DC 20068	211,895	0.14
Patrick J. Morley 345 Barnhill Road West Chester, PA 19382-2336	113,565	0.07
Hart Securities Ltd. C-O Anthony Bonanno Gibson Dunn & Crutcher 1050 Connecticut Avenue, NW #900 Washington, DC 20036-5306	60,000	0.04
Paine Webber Inc. 1000 Harbor Blvd Weehawken, NJ 07087-6726	55,704	0.03
Albert J. Battista & Virginia C. Battista Ten Com 4334 Reno Rd NW Washington, DC 20008	54,102	0.03
Joseph W. McCool 200 Coolidge Avenue Absecon, NJ 08201-1213	47,329	0.03
Annabelle R. Welch 312 Rodman Road Wilmington, DE 19809-2944	46,564	003
Dalck Feith TR U/A 03/07/97 The Dalck Feith Revocable Trust 8134 High School Road Elkins Park, PA 19027-2453	44,022	0.03
Edward F. Mitchell 111 Carlson Lane Stevensville, MD 21666	42,314	0.02
Walter Lokot & Franke D. Lokot JT TEN 3660 Emily Lane Sarasota, FL 34238	39,000	0.02
Pauline M. Cypert 4501 Arlington Blvd, Apt 412 Arlington, VA 22203	35,823	0.02
Laura Jane Groff & Richard D. Groff TR UA Dec 22 99 The Laur Jane Groff Revocable Trust 12408 Tampico Way Silver Spring, MD 20904	32,477	0.02
Robert S. Brown 5615 Atlantic Avenue Ventnor, NJ 08406-2816	30,597	0.02
Daniel Welebir 5801 Wisconsin Avenue Chevy Chase, MD 20815	27,903	0.01
Marshall A. Pickett 2405 Driver Pl. District Heights, MD 20747-22	25,597	0.01
Douglas J. Feith TR Deft Trust DTD 05/17/91 P O Box 368 Jenkintown, PA 19046	24,045	0.01
Eric K. Antheil 414 Obo Drive Davenport, FL 33837	22,587	0.01
Jimmie G. Deoudes & Thelma J. Deoudes JT TEN Lazy D 14840 Mockingbird Drive Darnestown, MD 20874	22,500	0.01

b)			Number of shareholders of record each holding 1,000 shares or more, and aggregate number of shares so held. At September 10,2002, there were 1,090 shareholders holding 1,000 shares or more. The aggregate number of shares held by these shareholders was 129,477,859.
c)			Number of shareholders of record each holding less than 1,000 shares and the aggregate number of shares so held. At September 10,2002, there were 71,927 shareholders holding less than 1,000 shares. The aggregate number of shares held by these shareholders was 15,467,678.
OFFICERS, DIRECTORS AND EMPLOYEES
16.
a)			Positions and Compensation of Officers and Directors. Give name and address of each director and officer (including any person who performs similar functions) of the registrant, of each subsidiary company thereof, and of each mutual service company which is a member of the same holding company system. Opposite the name of each such individual give the title of every such position held by him and briefly describe each other employment of such individual by each such company.

State the present rate of compensation on an annual basis for each director whose aggregate compensation from all such companies exceeds $1,000 per year, and of each officer whose aggregate compensation from such companies is at the rate of $20,000 or more per year. In the event any officer devotes only part of his time to a company or companies in the system this fact should be indicated by appropriate footnote. Such compensation for such part time should be computed on an annual rate and if such annual rate exceeds $20,000 the actual compensation as well as annual rate should also be reported.

b)			Compensation of Certain Employees. As to regular employees of such companies who are not directors or officers of any one of them, list the name, address, and aggregate annual rate of compensation of all those who receive $20,000 or more per year from all such companies.

c)			Indebtedness to System Companies. As to every such director, trustee or officer as aforesaid, who is indebted to any one of such companies, or on whose behalf any such company has now outstanding and effective any obligation to assume or guarantee payment of any indebtedness to another, and whose total direct and contingent liability to such company exceeds the sum of $1,000, give the name of such director, trustee, or officer, the name of such company, and describe briefly the nature and amount of such direct and contingent obligations.

d)			Contracts. If any such director, trustee, or officer as aforesaid:
			(1)				has an existing contract with any such company (exclusive of an employment contract which provides for no compensation other than that set forth in paragraph (a) of this Item); or,

			(2)				either individually or together with the members of his immediate family, owns, directly or indirectly, 5% or more of the voting securities of any third person with whom any such company has an existing contract; or,

			(3)				has any other beneficial interest in an existing contract to which any such company is a party; describe briefly the nature of such contract, the names of the parties thereto, the terms thereof, and the interest of such officer, trustee, or director therein.
			Information required to be disclosed pursuant to items 16(a) through 16(e) is not set forth herein. In lieu thereof, information in respect thereof will be set forth in the Proxy Statement of Pepco Holdings to be distributed in connection with the 2003 Annual Meeting of Shareholders of Pepco Holdings. Such information will be incorporated by reference herein via amendment. Prior to the Merger, the officers and directors of Pepco Holdings were officers and/or directors of Pepco and Conectiv. Information regarding the positions and compensation of officers and directors of Pepco prior to the Merger is set forth in Pepco's Form 10-K for the year ended December 31, 2002, which is hereby incorporated by reference. Information regarding the positions and compensation of officers and directors of Conectiv prior to the Merger is set forth in Conectiv's Form 10-K for the year ended December 31, 2002, which is hereby incorporated by reference.
e)			Banking Connections. If any such director, trustee, or officer is an executive officer, director, partner, appointee, or representative of any bank, trust company, investment banker, or banking association or firm, or of any corporation a majority of whose stock having the unrestricted right to vote for the election of directors, is owned by any bank, trust company, investment banker, or banking association or firm, state the name of such director or officer, describe briefly such other positions held by him and indicate which of the rules under Section 17(c) authorizes the registrant and subsidiary companies of which he is a director or officer to retain him in such capacity.
Peter F. O'Malley is a director of Pepco Holdings and Legg Mason, Inc. He is eligible to serve as a director of Pepco Holdings pursuant to Rule 70(b)(4).
INTERESTS OF TRUSTEES IN SYSTEM COMPANIES
17.			Describe briefly the nature of any substantial interest which any trustee under indentures executed in connection with any outstanding issue of securities of the registrant or any subsidiary thereof, has in either the registrant or such subsidiary, and any claim which any such trustee may have against registrant or any subsidiary; provided, however, that it shall not be necessary to include in such description any evidences of indebtedness owned by such trustee which were issued pursuant to such an indenture. To the best knowledge of PHI management, there is no such interest.
SERVICE, SALES, AND CONSTRUCTION CONTRACTS
18.			As to each service, sales, or construction contract (as defined in paragraphs (19) to (21) of Section 2(a) of the Act) which the registrant and any subsidiary company thereof has had in effect within the last three months, describe briefly the nature of such contract, the name and address of the parties thereto, the dates of execution and expiration, and the compensation to be paid thereunder. Attach typical forms of any such contracts as an exhibit to this registration statement. If the other party to any such contract is a mutual service company or a subsidiary service company which is a member of the same holding company system as the registrant and as to which the Commission has made a favorable finding in accordance with Rule 13-22, specific reference may be made to the application or declaration filed by such company pursuant to Rule 13-22 and no further details need be given as to such contracts. The affiliate contract listed below is attached as Exhibit H-1 hereto:

Exhibit No.									Description
H-1									Service Agreement between PHI Service Company and affiliated subsidiaries of PHI (filed as Exhibit J-1 to the Application-Declaration of PHI on Form U-1, as amended, in File No. 70-9913).
LITIGATION
19.				Describe briefly any existing litigation of the following descriptions, to which the registrant or any subsidiary company thereof is a party, or of which the property of the registrant or any such subsidiary company is the subject, including the names of the parties and the court in which such litigation is pending:
				(1)				Proceedings to enforce or to restrain enforcement of any order of a State commission or other governmental agency;
				(2)				Proceedings involving any franchise claimed by any such company;
				(3)				Proceedings between any such company and any holder, in his capacity as such, of any funded indebtedness or capital stock issued, or guaranteed by such company, or between any such company and any officer thereof;
				(4)				Proceedings in which any such company sues in its capacity as owner of capital stock or funded indebtedness issued or guaranteed by any other company;
				(5)				Each other proceeding in which the matter in controversy, exclusive of interest and costs, exceeds an amount equal to 2% of the debit accounts shown on the most recent balance sheet of such company.
Information regarding litigation involving PHI and its subsidiaries is set forth in the following documents, the applicable portions of which are hereby incorporated by reference: Item 1 of Part II in Pepco's quarterly report on Form 10-Q for the period ended June 30, 2002; (File No. 1-1072); Item 1of Part II in Conectiv's quarterly report on Form 10-Q for the period ended June 30, 2002 (File No. 1-13895); Item 1of Part II in ACE's quarterly report on Form 10-Q for the period ended June 30, 2002 (File No. 1-3559); and Item 1 of Part II in Delmarva's quarterly report on Form 10-Q for the period ended June 30, 2002 (File No. 1-1405).
EXHIBITS
EXHIBIT A. Furnish a corporate chart showing graphically relationships existing between the registrant and all subsidiary companies thereof as of the same date as the information furnished in the answer to Item 8. The chart should show the percentage of each class voting securities of each subsidiary owned by the registrant and by each subsidiary company. A corporate chart of PHI and its subsidiaries has been provided as Exhibit A-1. EXHIBIT B. With respect to the registrant and each subsidiary company thereof, furnish a copy of the charter, articles of incorporation, trust agreement, voting trust agreement, or other fundamental document of organization, and a copy of its bylaws, rules, and regulations, or other instruments corresponding thereto. If such documents do not set forth fully the rights, priorities, and preferences of the holders of each class of capital stock described in the answer to Item 8(b) and those of the holders of any warrants, options or other securities described in the answer to Item 8(d), and of any limitations on such rights, there shall also be included a copy of each certificate, resolution, or other document establishing or defining such rights and limitations. Each such document shall be in the amended form effective at the date of filing the registration statement or shall be accompanied by copies of any amendments to it then in effect. Filed herewith. See Exhibit Index. EXHIBIT C.
(a)				With respect to each class of funded debt shown in the answers to Items 8(a) and 8(c), submit a copy of the indenture or other fundamental document defining the rights of the holders of such security, and a copy of each contract or other instrument evidencing the liability of the registrant or a subsidiary company thereof as endorser or guarantor of such security. Include a copy of each amendment of such document and of each supplemental agreement, executed in connection therewith. If there have been any changes of trustees thereunder, such changes, unless otherwise shown, should be indicated by notes on the appropriate documents. No such indenture or other document need be filed in connection with any such issue if the total amount of securities that are now, or may at any time hereafter, be issued and outstanding thereunder does not exceed either $1,000,000 or an amount equal to 10% of the total of the debit accounts shown on the most recent balance sheet of the registrant or subsidiary company which issued or guaranteed such securities or which is the owner of property subject to the lien of such securities, whichever of said sums is the lesser.
Filed herewith. See Exhibit Index.
(b)				As to each outstanding and uncompleted contract or agreement entered into by registrant or any subsidiary company thereof relating to the acquisition of any securities, utility assets (as defined in section 2(a)(18) of the Act), or any other interest in any business, submit a copy of such contract or agreement and submit details of any supplementary understandings or arrangements that will assist in securing an understanding of such transactions.
None as of September 30, 2002
EXHIBIT D. A consolidating statement of income and surplus of the registrant and its subsidiary companies for its last fiscal year ending prior to the date of filing this registration statement, together with a consolidating balance sheet of the registrant and its subsidiary companies as of the close of such fiscal year.
Financial statements will be included in Form U5S for the year ended December 31, 2002 to be filed by Pepco Holdings on or before May 1, 2003. Such financial statements will be incorporated herein by reference via amendment. EXHIBIT E. For each public utility company and natural gas producing and pipe line property in the holding company system of the registrant, furnish the following maps (properties of associate companies operating in contiguous or nearby areas may be shown on the same map, provide property and service areas of each company are shown distinctively).
(1)		Map showing service area in which electric service is furnished, indicating the names of the companies serving contiguous areas.
Incorporated by reference to Exhibits D-1, D-2 and D-3 to the Application-Declaration on Form U-1 (70-9913) filed with the Commission on July 20, 2001.
(2)		Electric system map showing location of electric property (exclusive of local distribution lines) owned and/or operated, and information as follows:
		(a)				Generating plants--kind and capacity;
		(b)				Transmission lines--voltage, number of circuits, kind of supports, kind and size of conductors;
		(c)				Transmission substations--capacity.
		(d)				Distribution substations--capacity.
		(e)				Points of interconnection with all other electric utility companies and with all electrical enterprises operated by municipal or governmental agencies, giving names of such companies and enterprises;
Incorporated by reference to Exhibits D-1, D-2 and D-3 to the Application-Declaration on Form U-1 (70-9913) filed with the Commission on July 20, 2001.
(3)		Map showing service area in which gas service is furnished, indicating the names of companies serving contiguous areas;
Incorporated by reference to Exhibit D-2 to the Application-Declaration on Form U-1 (70-9913) filed with the Commission on July 20, 2001.
(4)		Gas system map showing location of gas property (exclusive of low pressure local distribution lines) owned and/or operated, and information as follows:
		(a)				Generating plants--kind and daily capacity;
		(b)				Holders--kind and capacity;
		(c)				Compressor stations--capacity in horsepower;
		(d)				Transmission pipe lines--size, approximate average transmission pressure and the estimated daily delivery capacity of the system;
		(e)				Points of interconnection with all other private and public gas utilities, pipe lines, or producing enterprises; giving names of such companies and other enterprises;
		(f)				General location and outline of gas producing and reserve areas and diagrammatic location of gathering lines.
Incorporated by reference to Exhibit D-2 to the Application-Declaration on Form U-1 (70-9913) filed with the Commission on July 20, 2001. EXHIBIT F. Furnish an accurate copy of each annual report for the last fiscal year ending prior to the date of the filing of this registration statement, which the registrant and each subsidiary company thereof has previously submitted to its stockholders. For companies for which no reports are submitted the reason for omission should be indicated; provided that electronic filers shall submit such reports in paper format only under cover of Form SE. The Annual Report for Pepco for the period ending December 31, 2001 is incorporated by reference to the filing on Form 10-K dated March 29, 2002. The Annual Report for Conectiv for the period ending December 31, 2001 is incorporated by reference to the filing on Form 10-K dated March 19, 2002. The Annual Report for ACE for the period ending December 31, 2001 is incorporated by reference to the filing on Form 10-K dated March 27, 2002. The Annual Report for Delmarva for the period ended December 31, 2001 is incorporated by reference to the filing on Form 10-K dated March 27, 2002. EXHIBIT G. Furnish a copy of each annual report which the registrant and each public utility subsidiary company thereof shall have filed with any State Commission having jurisdiction to regulate public utility companies for the last fiscal year ending prior to the date of filing this registration statement. If any such company shall have filed similar reports with more than one such State commission, the registrant need file a copy of only one of such reports provided that notation is made of such fact, giving the names of the different commissions with which such report was filed, and setting forth any differences between the copy submitted and the copies filed with such other commissions. In the event any company submits an annual report to the Federal Power Commission but not to a State commission, a copy of such report should be furnished. In the case of a registrant or any public utility subsidiary company for which no report is appended the reasons for such omission should be indicated such as "No such reports required or filed;" provided that electronic filers shall submit such reports in paper format only under cover of Form SE.
					Exhibit G-5					2001 Annual Report of Pepco to the Maryland Public Service Commission (FERC Form 1)
					Exhibit G-6					2001 Annual Report of Pepco to the District of Columbia Public Service Commission (FERC Form 1)
					Exhibit G-7					2001 Annual Report of ACE to the New Jersey Board of Public Utilities (FERC Form 1)
					Exhibit G-8					2001 Annual Report of Delmarva to the Delaware Public Service Commission (FERC Form 1 and FERC Form 2)
					Exhibit G-9					2001 Annual Report of Delmarva to the Virginia State Corporation Commission (FERC Form 1)
					Exhibit G-10					2001 Annual Report of Delmarva to the Maryland Public Service Commission (FERC Form 1)
EXHIBIT H. Typical forms of service, sales, or construction contracts described in answer to Item 18. See Exhibit H-1. This registration statement comprises:
(a)	A cover page, followed by pages numbered 2 to 83 consecutively.
(b)	The following Exhibits: the Exhibits shown on the attached exhibit index.

		SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the registrant has caused this Amendment No. 1 to the registration statement to be duly signed on its behalf in the District of Columbia, on the 13th day of February, 2003.
		PEPCO HOLDINGS, Inc. /s/ Anthony J. Kamerick Anthony J. Kamerick Vice President and Treasurer
Attest: /s/ EllenSheriff Rogers Vice President and Secretary
		VERIFICATION
District of Columbia The undersigned, being duly sworn, deposes and says that he has duly executed the attached Amendment No. 1 to the registration statement dated February 13, 2003, for and on behalf of Pepco Holdings, Inc.; that he is the Vice President and Treasurer of such company; and that all action by stockholders, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. Deponent further says that he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.
		/s/ Anthony J. Kamerick
Subscribed and sworn to before me this 13th day of February, 2003. /s/ Lisa A. Poole My commission expires: 7/31/07
INDEX OF EXHIBITS
EXHIBIT NUMBER	DESCRIPTION
A-1	Corporate chart of Pepco Holdings, Inc. and Subsidiaries (previously filed on Form SE).
B	Charters and Bylaws.
C	Principal Financing Documents
G-1	2001 Annual Report of Pepco to the Federal Energy Regulatory Commission (FERC Form 1) (previously filed on Form SE).
G-2	2001 Annual Report of ACE to the Federal Energy Regulatory Commission (FERC Form 1) (previously filed on Form SE).
G-3	2001 Annual Report of Delmarva to the Federal Energy Regulatory Commission (FERC Form 1) (previously filed on Form SE).
G-4	2001 Annual Report of Delmarva to the Federal Energy Regulatory Commission (FERC Form 2) (previously filed on Form SE).
G-5	2001 Annual Report of Pepco to the Maryland Public Service Commission. (Required annual report is FERC Form 1 which was previously filed as Exhibit G-1)
G-6	2001 Annual Report of Pepco to the District of Columbia Public Service Commission. (Required annual report is FERC Form 1 which was previously filed as Exhibit G-1)
G-7	2001 Annual Report of ACE to the New Jersey Board of Public Utilities (Required annual report is FERC Form 1 which was previously filed as Exhibit G-2).
G-8	2001 Annual Report of Delmarva to the Delaware Public Service Commission (Required annual reports are FERC Form 1 and FERC Form 2. FERC Form 1 was previously filed as Exhibit G-3. FERC Form 2 was previously filed as Exhibit G-4. Both forms were previously filed on Form SE).
G-9	2001 Annual Report of Delmarva to the Virginia State Corporation Commission (Required annual report is FERC Form 1 which was previously filed as Exhibit G-3).

G-10	2001 Annual Report of Delmarva to the Maryland Public Service Commission. (Required annual report is FERC Form 1 which was previously filed as Exhibit G-3)
H-1	Typical PHI System service agreement (incorporated by reference to the filing on Form U-1 (File No. 70-9913; Exhibit J-1).

Exhibit B
ACE REIT, Inc.
B.1.1	Certificate of Incorporation (filed with Conectiv's 1999 Form U5S)
B.1.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.1.3	Certificate of Amendment of Certificate of Incorporation (filed herewith)
B.1.4	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Aircraft International Management Company
B.2.1	Restated Certificate of Incorporation (filed herewith)
B.2.2	By-Laws (filed herewith)
Aircraft Leasing Associates, L.P.
B.3.1	Second Amended and Restated Certificate of Limited Partnership (filed herewith)
B.3.2	Amended and Restated Certificate of Limited Partnership (filed herewith)
B.3.3	Agreement of Limited Partnership (filed herewith)
B.3.4	Certificate of Limited Partnership (filed herewith)
B.3.5	Amended and Restated Agreement of Limited Partnership (filed herewith)
American Energy Partnership
B.4.1	Certificate of Incorporation (filed herewith)
B.4.2	By-Laws (filed herewith)
American L-B Energy Partnership
B.5.1	Joint Venture Partnership Agreement (filed herewith)
AMP Funding L.L.C.
B.6.1	Certificate of Formation (filed herewith)
B.6.2	Operating Agreement (filed herewith)
ATE Investments, Inc.
B.7.1	Certificate of Incorporation (filed herewith)
B.7.2	Bylaws (filed herewith)
B.7.3	Certificate of Merger - NJ (filed herewith)
B.7.4	Certificate of Merger - DE (filed herewith)
Atlantic City Electric Company
B.8.1	Restated Charter (filed herewith)
B.8.2	Articles of Restatement (filed herewith)
B.8.3	Restated Bylaws (filed herewith)
Atlantic City Electric Company Transition Funding LLC
B.9.1	Restated Limited Liability Company Agreement (confidential treatment requested)(filed herewith)
Atlantic Generation, Inc.
B.10.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.10.2	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Atlantic Jersey Thermal Systems, Inc.
B.11.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.11.2	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Atlantic Southern Properties, Inc.
B.12.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.12.2	Certificate of Amendment to Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.12.3	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
ATS Operating Services, Inc.
B.13.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.13.2	Certificate for Renewal and Revival of Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.13.3	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Binghamton General, Inc.
B.14.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.14.2	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Binghamton Limited, Inc.
B.15.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.15.2	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Carbon Composite, LLC
B.16.1	Certificate to Restore Good Standing; Certificate of Amendment (filed herewith)
Conectiv
B.17.1	Restated Bylaws (filed herewith)
B.17.2	Restated Certificate of Incorporation (filed herewith)
Conectiv Atlantic Generation, L.L.C.
B.18.1	Certificate of Formation (filed with Conectiv's 2000 Form U5S)
Conectiv Bethlehem LLC (formerly Conectiv Bethlehem, Inc.)
B.19.1	Amended and Restated Certificate of Incorporation (filed herewith)
B.19.2	Certificate of Conversion (filed herewith)
B.19.3	Operating Agreement (confidential treatment requested) (filed herewith)
B.19.4	Certificate of Formation (filed herewith)
Conectiv Communications, Inc.
B.20.1	Restated Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.20.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.20.3	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Conectiv Delmarva Generation, Inc.
B.21.1	Certificate of Incorporation (filed with Conectiv's 1999 Form U5S)
B.21.2	Certificate of Ownership and Merger (filed with Conectiv's 2000 Form U5S)
B.21.3	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.21.4	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Conectiv Energy Holding Company
B.22.1	Certificate of Incorporation (filed with Conectiv's 2000 Form U5S)
B.22.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.22.3	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Conectiv Energy Supply, Inc.
B.23.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.23.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.23.3	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.23.4	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.23.5	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Conectiv Mid-Merit, Inc.
B.24.1	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2000 Form U5S)
B.24.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.24.3	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Conectiv Operating Services Company
B.25.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.25.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.25.3	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.25.4	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Conectiv Pennsylvania Generation, Inc.
B.26.1	Certificate of Incorporation (filed herewith)
B.26.2	Certificate of Amendment of Certificate of Incorporation (filed herewith)
B.26.3	Bylaws (filed herewith)
Conectiv Plumbing, L.L.C.
B.27.1	Certificate of Formation (filed with Conectiv's 1998 Form U5S)
B.27.2	Operating Agreement (filed with Conectiv's 1998 Form U5S)
Conectiv Properties and Investments, Inc.
B.28.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.28.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.28.3	Certificate of Merger (filed with Conectiv's 2000 Form U5S)
B.28.3	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Conectiv Services, Inc.
B.29.1	Certificate of Incorporation (filed with Conectiv's 2000 Form U5S)
B.29.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2000 Form U5S)
B.29.3	Bylaws (filed with Conectiv's 2000 Form U5S)
Conectiv Solutions, LLC
B.30.1	Certificate of Formation (filed with Conectiv's 1998 Form U5S)
B.30.2	Limited Liability Company Agreement (filed with Conectiv's 1998 Form U5S)
Conectiv Thermal Systems, Inc.
B.31.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.31.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.31.3	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
DCI II, Inc.
B.32.1	Articles of Incorporation (filed with Conectiv's 1998 Form U5S)
B.32.2	Bylaws (filed with Conectiv's 1998 Form U5S)
DCTC-Burney, Inc.
B.33.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.33.2	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Delmarva Operating Services Company
B.34.1	Bylaws (filed herewith)
B.34.2	Certificate of Incorporation (filed herewith)
Delmarva Power & Light Company
B.35.1	Articles of Restatement (filed herewith)
B.35.2	Restated Bylaws (filed herewith)
B.35.3	Restated Charter (filed herewith)
B.35.4	Certificate of Correction (filed herewith)
Edison Capital Reserves Corporation
B.36.1	Certificate of Incorporation (filed herewith)
B.36.2	By-Laws (filed herewith)
Edison Place, LLC
B.37.1	Certificate of Formation (filed herewith)
B.37.2	Limited Liability Agreement (filed herewith)
Electro Ecology, Inc.
B.38.1	Restated Certificate of Incorporation (filed herewith)
B.38.2	By-Laws (filed herewith)
Energy and Telecommunications Services, LLC
B.39.1	Certificate of Formation (filed herewith)
B.39.2	Limited Liability Agreement (filed herewith)
Energy Systems North East, LLC
B.40.1	Certificate of Formation (filed with Conectiv's 2000 U5S)
B.40.2	Limited Liability Company Agreement (filed with Conectiv's 2000 Form U5S)
Engineered Services, Inc.
B.41.1	Certificate of Amendment (filed herewith)
B.41.2	Certificate of Incorporation (filed herewith)
B.41.3	Operating Agreement (filed herewith)
Fauquier Landfill Gas, LLC
B.42.1	Certificate of Formation (filed herewith)
B.42.2	By-Laws (filed herewith)
B.42.3	Operating Agreement (filed herewith)
Friendly Skies, Inc.
B.43.1	By-Laws (filed herewith)
B.43.2	Articles of Incorporation (filed herewith)
G&L Mechanical Services, Inc.
B.44.1	Certificate of Incorporation (filed herewith)
B.44.2	By-Laws (filed herewith)
Gridco International L.L.C.
B.45.1	Limited Liability Company Agreement (filed herewith)
Harmans Building Associates
B.46.1	General Partnership Agreement (filed herewith)
King Street Assurance Ltd.
B.47.1	Certificate of Incorporation (filed with Conectiv's 1999 Form U5S)
B.47.2	Bylaws (filed with Conectiv's 1999 Form U5S)
KJC Operating Company
B.48.1	Articles of Incorporation (filed herewith)
B.48.2	By-Laws (filed herewith)
Kramer Junction Company
B.49.1	By-Laws (filed herewith)
B.49.2	Certificate of Amendment of Articles of Incorporation (filed herewith)
B.49.3	Certificate of Amendment of Incorporation (filed herewith)
B.49.4	Articles of Incorporation (filed herewith)
Linpro Harmans Land LTD Partnership
B.50.1	Amended and Restated Limited Partnership Agreement (filed herewith)
B.50.2	Certificate of Limited Partnership, LLP (filed herewith)
Luz Solar Partners, Ltd., III
B.51.1	Agreement of Limited Partnership (filed herewith)
B.51.2	Amendment to Certificate of Limited Partnership (filed herewith)
Luz Solar Partners, Ltd., IV
B.52.1	Agreement of Limited Partnership (filed herewith)
Luz Solar Partners, Ltd., V
B.53.1	Agreement of Limited Partnership (filed herewith)
Luz Solar Partners, Ltd., VI
B.54.1	Agreement of Limited Partnership (filed herewith)
B.54.2	Amendment to Certificate of Limited Partnership (filed herewith)
Luz Solar Partners, Ltd., VII
B.55.1	First Amended and Restated Agreement of Limited Partnership (filed herewith)
B.55.2	Amendment to Certificate of Limited Partnership (filed herewith)
MET Electrical Testing Company, Inc.
B.56.1	Certificate of Incorporation (filed herewith)
B.56.2	By-Laws (filed herewith)
Microcell Corporation
B.57.1	Articles of Restatement (filed herewith)
B.57.2	By-Laws (filed herewith)
Millenium Account Services, LLC
B.58.1	Certificate of Formation (filed with Conectiv's 1999 Form U5S)
B.58.2	Limited Liability Company Operating Agreement (filed with Conectiv's 1999 Form U5S)
Nextgate, Inc.
B.59.1	Certificate of Incorporation (filed herewith)
B.59.2	By-Laws (filed herewith)
PCI Air Management Corporation
B.60.1	Articles of Incorporation (filed herewith)
B.60.2	By-Laws (filed herewith)
PCI Air Management Partners, LLC
B.61.1	Operating Agreement (filed herewith)
PCI Energy Corporation
B.62.1	Certificate of Incorporation (filed herewith)
B.62.2	By-Laws (filed herewith)
PCI Engine Trading, Ltd.
B.63.1	By-Laws (filed herewith)
B.63.2	Certificate of Incorporation (filed herewith)
PCI Ever, Inc.
B.64.1	By-Laws (filed herewith)
B.64.2	Certificate of Incorporation (filed herewith)
PCI Holdings, Inc.
B.65.1	By-Laws (filed herewith)
B.65.2	Certificate of Incorporation (filed herewith)
PCI Netherlands Corporation
B.66.1	Articles of Incorporation (filed herewith)
B.66.2	By-Laws (filed herewith)
PCI Nevada Investments
B.67.1	Agreement of Partnership (filed herewith)
B.67.2	Registration of Trade Names, Partnerships and Associations (filed herewith)
PCI Queensland Corporation
B.68.1	Articles of Incorporation (filed herewith)
B.68.2	By-Laws (filed herewith)
PCI-BT Ventures
B.69.1	Joint Venture Agreement (filed herewith)
PCI-BT Investing, LLC
B.70.1	Certificate of Formation (filed herewith)
B.70.2	Operating Agreement (filed herewith)
PCI-BT Ventures
B.71.1	Joint Venture Agreement (filed herewith)
Pedrick Gen., Inc.
B.72.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.72.2	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Pepco Building Services, Inc.
B.73.1	Certificate of Incorporation (filed herewith)
B.73.2	By-Laws (filed herewith)
Pepco Communications, Inc.
B.74.1	Certificate of Formation (filed herewith)
B.74.2	By-Laws (filed herewith)
Pepco Communications, LLC
B.75.1	Certificate of Formation (filed herewith)
B.75.2	Limited Liability Company Agreement (filed herewith)
Pepco Energy Company
B.76.1	Certificate of Incorporation (filed herewith)
B.76.2	By-Laws (filed herewith)
Pepco Energy Services, Inc.
B.77.1	Articles of Incorporation (filed herewith)
B.77.2	By-Laws (filed herewith)
Pepco Enterprises, Inc.
B.78.1	Articles of Incorporation (filed herewith)
B.78.2	By-Laws (filed herewith)
Pepco Holdings, Inc.
B.79.1	Restated Certificate of Incorporation (filed with Pepco Holdings' Current Report on Form 8-K for the period 8/1/02)
B.79.2	By-Laws (filed with Pepco Holdings' Current Report on Form 8-K for the period 8/1/02)
Pepco Technologies, LLC
B.80.1	Certificate of Formation (filed herewith)
B.80.2	Limited Liability Company Agreement (filed herewith)
PepMarket.com LLC
B.81.1	Certificate of Formation (filed herewith)
B.81.2	Restated and Amended Limited Liability Agreement (filed herewith)
PHI Operating Services Company
B.82.1	Bylaws (filed herewith)
B.82.2	Certificate of Incorporation (filed herewith)
PHI Service Company (formerly Conectiv Resource Partners, Inc.)
B.83.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.83.2	Certificate of Amendment of Certificate of Incorporation (filed with Conectiv's 2001 Form U5S)
B.83.3	Bylaws (filed herewith)
POM Holdings, Inc.
B.84.1	Certificate of Incorporation (filed herewith)
B.84.2	By-Laws (filed herewith)
Potomac Aircraft Leasing Corporation
B.85.1	Articles of Incorporation (filed herewith)
B.85.2	By-Laws (filed herewith)
Potomac Capital Investment Corporation
B.86.1	Certificate of Incorporation (filed herewith)
B.86.2	By-Laws (filed herewith)
Potomac Capital Joint Leasing Corporation
B.87.1	Certificate of Incorporation (filed herewith)
B.87.2	By-Laws (filed herewith)
Potomac Capital Markets Corporation
B.88.1	Certificate of Incorporation (filed herewith)
B.88.2	By-Laws (filed herewith)
Potomac Delaware Leasing Corporation
B.89.1	Certificate of Incorporation (filed herewith)
B.89.2	By-Laws (filed herewith)
Potomac Electric Power Company
B.90.1	Articles of Incorporation (Filed with Pepco's Quarterly Report on Form 10-Q for quarter ending 9/30/02)
B.90.2	By-Laws (Filed with Pepco's Quarterly Report on Form 10-Q for quarter ending 9/30/02)
Potomac Electric Power Company Trust I
B.91.1	Certificate of Trust (Filed as Ex. 4.1 to Registration Statement No. 333-51241 on 4/2/98)
B.91.2	Form of Amended and Restated Declaration of Trust (Filed as Ex. 4.3 to Amendment No. 1 to Registration Statement No. 333-51241 on 5/7/98)
Potomac Equipment Leasing Corporation
B.92.1	Articles of Incorporation (filed herewith)
B.92.2	By-Laws (filed herewith)
Potomac Harmans Corporation
B.93.1	Articles of Incorporation (filed herewith)
B.93.2	By-Laws (filed herewith)
Potomac Leasing Associates, LP
B.94.1	Third Amended and Restated Agreement of Limited Partnership (filed herewith)
B.94.2	Certificate of Limited Partnership (filed herewith)
Potomac Nevada Corporation
B.95.1	Articles of Incorporation (filed herewith)
B.95.2	By-Laws (filed herewith)
Potomac Nevada Leasing Corporation
B.96.1	Articles of Incorporation (filed herewith)
B.96.2	By-Laws (filed herewith)
Potomac Nevada Investment, Inc.
B.97.1	Articles of Incorporation (filed herewith)
B.97.2	By-Laws (filed herewith)
Potomac Power Resources, Inc.
B.98.1	Certificate of Incorporation (filed herewith)
B.98.2	By-Laws (filed herewith)
RAMP Investments, LLC
B.99.1	Certificate of Formation (filed herewith)
B.99.2	Operating Agreement (filed herewith)
Seaboard Mechanical Services, Inc.
B.100.1	Certificate of Amendment to Certificate of Incorporation (filed herewith)
B.100.2	By-Laws (filed herewith)
B.100.3	Certificate of Incorporation (filed herewith)
Severn Cable LLC
B.101.1	Limited Liability Company Agreement (filed herewith)
B.l01.2	Certificate of Formation (filed herewith)
Severn Construction, LLC
B.102.1	Limited Liability Agreement (filed herewith)
B.102.2	Certificate of Formation (filed herewith)
Starpower Communications, LLC
B.103.1	Certificate of Formation (filed herewith)
B.103.2	LLC Operating Agreement (confidential treatment requested)(filed herewith)
B.103.3	Amended and Restated Operating Agreement (confidential treatment requested) (filed herewith)
Substation Test Company, Inc.
B.104.1	By-Laws (filed herewith)
B.104.2	Certificate of Amendment to Certificate of Incorporation (filed herewith)
B.104.3	Certificate of Incorporation (filed herewith)
Unitemp, Inc.
B.105.1	Certificate of Incorporation (filed herewith)
B.105.2	By-Laws (filed herewith)
Vineland Ltd., Inc.
B.106.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.106.2	Amended and Restated Bylaws (filed with Conectiv's 2001 Form U5S)
Vineland General, Inc.
B.107.1	Certificate of Incorporation (filed with Conectiv's 1998 Form U5S)
B.107.2	Amended and Restated Bylaws as amended July 31, 2001 (filed with Conectiv's 2001 Form U5S)
W. A. Chester Corporation
B.108.1	By-Laws (filed herewith)
B.108.2	Certificate of Incorporation (filed herewith)
W. A. Chester, LLC
B.109.1	Certificate of Amendment (filed herewith)
B.109.2	Certificate of Formation (filed herewith)
B.109.3	Operating Agreement (filed herewith)

Exhibit C

Exhibit	Document
C-1	Credit Agreement dated as of August 1, 2002, among Pepco Holdings, Inc., Potomac Electric Power Company, Delmarva Power & Light Company, Atlantic City Electric Company, Bank One, NA, as agent and the Lenders named therein (incorporated by reference to the Current Report on Form 8-K filed by Pepco Holdings, Inc. on August 1, 2002
C-2	Indenture For Unsecured Debt Securities)) dated as of September 6, 2002 from Pepco Holdings, Inc. to The Bank of New York (incorporated by reference to the Registration Statement filed by Pepco Holdings, Inc. on October 10, 2002 (333-100478))
C-3	Mortgage and Deed of Trust dated July 1, 1936 of Potomac Electric Power Company to the Bank of New York, as Successor Trustee (the "Pepco Mortgage") and the Supplemental Indenture to the Pepco Mortgage dated July, 1, 1936 (incorporated by reference to the First Amendment to the Registration Statement filed by Potomac Electric Power Company on June 19, 1936 (2-2232))
C-4	Supplemental Indentures to the Pepco Mortgage dated December 1, 1939 and December 10, 1939 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on January 3, 1940)
C-5	Supplemental Indenture to the Pepco Mortgage dated August 1, 1940 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on September 25, 1940)
C-6	Supplemental Indentures to the Pepco Mortgage dated July 15, 1942 and August 10, 1942 (incorporated by reference to the Post-Effective Amendment to the Registration Statement filed by Potomac Electric Power Company on June 19, 1936 (2-5032))
C-7	Supplemental Indenture to the Pepco Mortgage dated August 1, 1942 (incorporated by reference to the Form 8-A filed by Potomac Electric Power Company on October 8, 1942)
C-8	Supplemental Indenture to the Pepco Mortgage dated October 15, 1942 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on December 7, 1942)
C-9	Supplemental Indenture to the Pepco Mortgage dated October 15, 1947 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on October 15, 1947)
C-10	Supplemental Indenture to the Pepco Mortgage dated January 1, 1948 (incorporated by reference to the Post-Effective Amendment No. 2 to the Registration Statement filed by Potomac Electric Power Company on January 28, 1948 (2-7349))
C-11	Supplemental Indenture to the Pepco Mortgage dated December 31, 1948 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on April 13, 1949)
C-12	Supplemental Indenture to the Pepco Mortgage dated May 1, 1949 (incorporated by reference to the Post-Effective Amendment No. 1 to the Registration Statement filed by Potomac Electric Power Company on May 10, 1949 (2-7948))
C-13	Supplemental Indenture to the Pepco Mortgage dated December 31, 1949 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on February 8, 1950)
C-14	Supplemental Indenture to the Pepco Mortgage dated May 1, 1950 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on May 8, 1950 (2-8430))
C-15	Supplemental Indenture to the Pepco Mortgage dated February 15, 1951 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on March 9, 1951)
C-16	Supplemental Indenture to the Pepco Mortgage dated March 1, 1952 (incorporated by reference to the Post-Effective Amendment No. 1 to the Registration Statement filed by Potomac Electric Power Company on March 12, 1952 (2-9435))
C-17	Supplemental Indenture to the Pepco Mortgage dated February 16, 1953 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on March 5, 1953)
C-18	Supplemental Indenture to the Pepco Mortgage dated May 15, 1953 (incorporated by reference to the Post-Effective Amendment No. 1 to the Registration Statement filed by Potomac Electric Power Company on May 26, 1953 (2-10246))
C-19	Supplemental Indentures to the Pepco Mortgage dated March 15, 1954 and March 15, 1955 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on May 2, 1955 (2-11627))

C-20	Supplemental Indenture to the Pepco Mortgage dated May 16, 1955 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on July 6, 1955)
C-21	Supplemental Indenture to the Pepco Mortgage dated March 15, 1956 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on April 4, 1956)
C-22	Supplemental Indenture to the Pepco Mortgage dated June 1, 1956 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on July 2, 1956)
C-23	Supplemental Indenture to the Pepco Mortgage dated April 1, 1957, (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on February 5, 1958 (2-13884))
C-24	Supplemental Indenture to the Pepco Mortgage dated May 1, 1958, (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on November 10, 1958 (2-14518))
C-25	Supplemental Indenture to the Pepco Mortgage dated December 1, 1958 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on January 2, 1959)
C-26	Supplemental Indenture to the Pepco Mortgage dated December 1, 1958 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on January 2, 1959)
C-27	Supplemental Indenture to the Pepco Mortgage dated May 1, 1959 (incorporated by reference to the Amendment No. 1 to the Registration Statement filed by Potomac Electric Power Company on May 13, 1959 (2-15027))
C-28	Supplemental Indenture to the Pepco Mortgage dated November 16, 1959 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on January 4, 1960)
C-29	Supplemental Indenture to the Pepco Mortgage dated May 2, 1960, (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on November 9, 1960 (2-17286))
C-30	Supplemental Indentures to the Pepco Mortgage dated December 1, 1960 and April 3, 1961 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on April 24, 1961)

C-31	Supplemental Indenture to the Pepco Mortgage dated May 1, 1962, (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on January 25, 1963 (2-21037))
C-32	Supplemental Indenture to the Pepco Mortgage dated February 15, 1963 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on March 4, 1963)
C-33	Supplemental Indenture to the Pepco Mortgage dated May 1, 1963 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on December 19, 1963 (2-21961))
C-34	Supplemental Indenture to the Pepco Mortgage dated April 23, 1964 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on April 24, 1964 (2-22344))
C-35	Supplemental Indenture to the Pepco Mortgage dated May 15, 1964 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on June 2, 1964)
C-36	Supplemental Indenture to the Pepco Mortgage dated May 3, 1965 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on March 16, 1966 (2-24655))
C-37	Supplemental Indenture to the Pepco Mortgage dated April 1, 1966 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on April 21, 1966)
C-38	Supplemental Indenture to the Pepco Mortgage dated June 1, 1966 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on April 11, 1967)
C-39	Supplemental Indenture to the Pepco Mortgage dated April 28, 1967 (incorporated by reference to the Post-Effective Amendment No. 1 to the Registration Statement filed by Potomac Electric Power Company on May 3, 1967 (2-26356))
C-40	Supplemental Indenture to the Pepco Mortgage dated May 1, 1967 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on June 1, 1967)
C-41	Supplemental Indenture to the Pepco Mortgage dated July 3, 1967 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on January 25, 1968 (2-28080))
C-42	Supplemental Indenture to the Pepco Mortgage dated February 15, 1968 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on March 7, 1968)
C-43	Supplemental Indenture to the Pepco Mortgage dated May 1, 1968 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on February 28, 1969 (2-31896))
C-44	Supplemental Indenture to the Pepco Mortgage dated March 15, 1969 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on April 8, 1969)
C-45	Supplemental Indenture to the Pepco Mortgage dated June 16, 1969 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on January 27, 1970 (2-36094))
C-46	Supplemental Indenture to the Pepco Mortgage dated February 15, 1970 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on March 9, 1970)
C-47	Supplemental Indenture to the Pepco Mortgage dated May 15, 1970 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on July 27, 1970 (2-38038))
C-48	Supplemental Indenture to the Pepco Mortgage dated August 15, 1970 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on July 27, 1970 (2-38038))
C-49	Supplemental Indenture to the Pepco Mortgage dated September 1, 1971 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on September 1, 1972 (2-45591))
C-50	Supplemental Indenture to the Pepco Mortgage dated September 15, 1972 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on September 1, 1972 (2-45591))
C-51	Supplemental Indenture to the Pepco Mortgage dated April 1, 1973 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on May 9, 1973)
C-52	Supplemental Indenture to the Pepco Mortgage dated January 2, 1974 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on December 5, 1973 (2-49803))

C-53	Supplemental Indenture to the Pepco Mortgage dated August 15, 1974 (incorporated by reference to the Amendment No. 1 to the Registration Statement filed by Potomac Electric Power Company on August 14, 1974 (2-51698))
C-54	Supplemental Indenture to the Pepco Mortgage dated June 15, 1977 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 19, 1981)
C-55	Supplemental Indenture to the Pepco Mortgage dated July 1, 1979 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 19, 1981)
C-56	Supplemental Indenture to the Pepco Mortgage dated June 16, 1981 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 19, 1982)
C-57	Supplemental Indenture to the Pepco Mortgage dated June 17, 1981 (incorporated by reference to Form 8-A filed by Potomac Electric Power Company on June 18, 1981)
C-58	Supplemental Indenture to the Pepco Mortgage dated December 1, 1981 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 19, 1982)
C-59	Supplemental Indenture to the Pepco Mortgage dated August 1, 1982 (incorporated by reference to the Amendment No. 1 to the Registration Statement filed by Potomac Electric Power Company on August 17, 1982 (2-78731))
C-60	Supplemental Indenture to the Pepco Mortgage dated October 1, 1982 (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on November 8, 1982)
C-61	Supplemental Indenture to the Pepco Mortgage dated April 15, 1983 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 23, 1984)
C-62	Supplemental Indenture to the Pepco Mortgage dated November 1, 1985 (incorporated by reference to Form 8-A filed by Potomac Electric Power Company on November 1, 1985)
C-63	Supplemental Indenture to the Pepco Mortgage dated March 1, 1986 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 28, 1986)

C-64	Supplemental Indenture to the Pepco Mortgage dated November 1, 1986 (incorporated by reference to Form 8-A filed by Potomac Electric Power Company on November 5, 1986)
C-65	Supplemental Indenture to the Pepco Mortgage dated March 1, 1987 (incorporated by reference to Form 8-A filed by Potomac Electric Power Company on March 2, 1987)
C-66	Supplemental Indenture to the Pepco Mortgage dated September 16, 1987 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on October 30, 1987 (33-18229))
C-67	Supplemental Indenture to the Pepco Mortgage dated May 1, 1989 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on June 16, 1989 (33-29382))
C-68	Supplemental Indenture to the Pepco Mortgage dated August 1, 1989 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 23, 1990)
C-69	Supplemental Indenture to the Pepco Mortgage dated April 5, 1990 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 29, 1991)
C-70	Supplemental Indenture to the Pepco Mortgage dated May 21, 1991 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 27, 1992)
C-71	Supplemental Indenture to the Pepco Mortgage dated May 7, 1992 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 26, 1993)
C-72	Supplemental Indenture to the Pepco Mortgage dated September 1, 1992 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 26, 1993)
C-73	Supplemental Indenture to the Pepco Mortgage dated November 1, 1992 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 26, 1993)
C-74	Supplemental Indenture to the Pepco Mortgage dated March 1, 1993 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 26, 1993)

C-75	Supplemental Indenture to the Pepco Mortgage dated March 2, 1993 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 26, 1993)
C-76	Supplemental Indenture to the Pepco Mortgage dated July 1, 1993 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on August 11, 1993 (33-49973))
C-77	Supplemental Indenture to the Pepco Mortgage dated August 20, 1993 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on September 23, 1993 (33-50377))
C-78	Supplemental Indenture to the Pepco Mortgage dated September 29, 1993 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 25, 1994)
C-79	Supplemental Indenture to the Pepco Mortgage dated September 30, 1993 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 25, 1994)
C-80	Supplemental Indenture to the Pepco Mortgage dated October 1, 1993 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 25, 1994)
C-81	Supplemental Indenture to the Pepco Mortgage dated February 10, 1994 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 25, 1994)
C-82	Supplemental Indenture to the Pepco Mortgage dated February 11, 1994 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 25, 1994)
C-83	Supplemental Indenture to the Pepco Mortgage dated March 10, 1995 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on July 28, 1995 (33-61379))
C-84	Supplemental Indenture to the Pepco Mortgage dated September 6, 1995 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on April 1, 1996)
C-85	Supplemental Indenture to the Pepco Mortgage dated September 7, 1995 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on April 1, 1996)

C-86	Supplemental Indenture to the Pepco Mortgage dated October 2, 1997 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 26, 1998)
C-87	Supplemental Indenture to the Pepco Mortgage dated March 17, 1999 (incorporated by reference to the Annual Report on Form 10-K filed by Potomac Electric Power Company on March 27, 2000)
C-88	Indenture dated as of July 28, 1989, between Potomac Electric Power Company and The Bank of New York, Trustee (incorporated by reference to the Current Report on Form 8-K filed by Potomac Electric Power Company on June 21, 1990)
C-89	Form of Indenture (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on May 7, 1998 (333-51241))
C-90	Form of First Supplemental Indenture for the issuance of 7 3/8% Junior Subordinated Deferrable Interest Debentures due 2038 (incorporated by reference to the Registration Statement filed by Potomac Electric Power Company on July 28, 1995 (33-61379))
C-91	Indenture dated as of May 17, 1999 from Conectiv to Wachovia Trust Company, National Association, as Successor Trustee (incorporated by reference to the First Amendment to the Registration Statement filed by Conectiv on May 11, 1999 (333-72251))
C-92	Mortgage and Deed of Trust dated January 15, 1937 between Atlantic City Electric Company, as Successor Trustee (the "ACE Mortgage") and Supplemental Indentures through November 1, 1994 incorporated by reference to the Registration Statement (2-66280); Form 10-K for the year ended December 31, 1980; Form 10-Q for the quarter ended June 30, 1981; Form 10-K for the year ended December 31, 1983; Form 10-Q for the quarter ended March 31, 1984; Form 10-Q for the quarter ended June 30, 1984; Form 10-Q for the quarter ended September 30, 1985; Form 10-Q for the quarter ended March 31, 1986; Form 10-K for the year ended December 31, 1987; Form 10-Q for the quarter ended September 30, 1989; Form 10-K for the year ended December 31, 1990; Form 10-Q for the quarter ended September 30, 1993; Form 10-K for the year ended December 31, 1993; Form 10-Q for the quarter ended June 30, 1994; Form 10-Q for the quarter ended September 30, 1994; Form 10-K for the year ended December 31, 1994

C-93	Supplemental Indenture to ACE Mortgage dated March 1, 1997 (incorporated by reference to the Current Report on Form 8-K filed by Atlantic City Electric Company on March 24, 1997)
C-94	Indenture dated as of March 1, 1997 between Atlantic City Electric Company and the Bank of New York (incorporated by reference to the Current Report on Form 8-K filed by Atlantic City Electric Company on March 24, 1997)
C-95	Junior Subordinated Indenture dated as of October 1, 1996 by and between Atlantic City Electric Company and The Bank of New York, as Trustee (incorporated by reference to the Annual Report on Form 10-K filed by Atlantic City Electric Company for the year ended December 31, 1996)
C-96	Mortgage and Deed of Trust of Delmarva Power & Light Company to JPMorgan Chase Bank, as Successor Trustee, dated as of October 1, 1943 (the "Delmarva Mortgage") and copies of the First through Sixty-Eighth Supplemental Indentures) (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-1763)
C-97	Sixty-Ninth Supplemental Indenture to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-39756)
C-98	Seventieth through Seventy-Fourth Supplemental Indentures to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-24955)
C-99	Seventy-Fifth through Seventy-Seventh Supplemental Indentures to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-39756)
C-100	Seventy-Eighth and Seventy-Ninth Supplemental Indentures to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-46892)
C-101	Eightieth Supplemental Indenture to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-49750)
C-102	Eighty-First Supplemental Indenture to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-57652)

C-103	Eighty-Second Supplemental Indenture to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-63582)
C-104	Eighty-Third Supplemental Indenture to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-50453)
C-105	Eighty-Fourth through Eighty-Eighth Supplemental Indentures to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-53855)
C-106	Eighty-Ninth and Ninetieth Supplemental Indentures to the Delmarva Mortgage (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 333-00505)
C-107	Indenture between Delmarva Power & Light Company and JP Morgan Chase Bank, as Successor Trustee, dated as of November 1, 1988 (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 33-46892)
C-108	Indenture (for Unsecured Subordinated Debt Securities relating to Trust Securities) between Delmarva Power & Light Company and Wilmington Trust Company, as Trustee, dated as of October 1, 1996 (incorporated by reference to the filing by Delmarva Power & Light Company of Registration Statement No. 333-20715)

CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF ACE REIT, INC. Pursuant to Section 242 Of the General Corporation Law Of the State of Delaware
ACE REIT, Inc., a corporation duly organized and validly existing under and by virtue of the General Corporation Law of the State of Delaware ("GCL"), does hereby certify that: 1. The Board of Directors of ACE REIT, Inc. (the "Company") duly adopted by Unanimous Written Consent pursuant to Section 141 of the GCL, all in accordance with Section 242 of the GCL, the following resolutions setting forth proposed amendments to the Certificate of Incorporation of the Company, declaring said amendments to be advisable and submitting them to the sole stockholder of the Company for consideration thereof:
	RESOLVED, That the Certificate of Incorporation (the "Certificate") of the Company be, and hereby is, amended by deleting the current Article THIRD of the Certificate and replacing it with the following:
	THIRD: The purpose of the Corporation and the nature and objects of the business to be transacted, promoted, conducted or carried out are:
		To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
	FURTHER RESOLVED, That the Certificate of Incorporation (the "Certificate") of the Company be, and hereby is, further amended by deleting the current Article NINTH of the Certificate; and
2. In accordance with the provisions of Sections 228 and 242 of the GCL, the amendment was adopted by the sole shareholder of the Company without a meeting, pursuant to the written consent of the shareholder.
IN WITNESS WHEREOF, the Company has caused this certificate to be executed by its ________________________.
Date: July 30, 2002			ACE REIT, INC. By:

Secretary of State Division of Corporations Filed 09:00 AM 01/10/1994 940105092 - 2115369
RESTATED CERTIFICATE OF INCORPORATION OF AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY
Aircraft International Management Company, a corporation organized and existing under the laws of the State of Delaware, hereby certify as follows: 1. The name of the corporation is Aircraft International Management Company. Aircraft International Management Company was originally incorporated under the same name, and the original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on January 20, 1987. 2. Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, this Restated Certificate of Incorporation restates and amends the provisions of the Certificate of Incorporation of this corporation. 3. The text of the Certificate of Incorporation is hereby restated and amended to read in its entirety as follows: 1. The name of the corporation is: Aircraft International Management Company 2. The address of its registered office in the State of Delaware is 1105 N. Market Street, Suite 1300, P.O. Box 8985, New Castle County, Wilmington, Delaware 19899. The name of the registered agent at such address is Delaware Corporate Management, Inc. 3. The nature of the business or purposes of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is ten thousand (10,000) all of which shall be shares of common stock each with a par value of One Dollar ($1) per share. 5. The corporation is to have perpetual existence. 6. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized: To make, alter or repeal the By-Laws of the corporation. 7. Elections of directors need not be by written ballot unless the By-Laws of the corporation shall so provide. Meetings of the stockholders may beheld within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. 8. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. 9. No director shall be personally liable to the corporation or the stockholders for monetary damages for breach of fiduciary duty as a director except (i) for any breach of his duty of loyalty to the corporation or the stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) for the unlawful payment of dividends or unlawful stock repurchases (as to which a negligence standard will apply); or (iv) for any transaction from which the director derived an improper personal benefit. IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been signed under the seal of the corporation this 6 ^th day of December, 1993.
ATTEST: /s/ WM. SHAPIRO Secretary	AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY By: /s/ Paul F. Naughton President

SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 03:30 PM 10/18/1994 944198215 - 2115369
CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION AFTER PAYMENT OF CAPITAL OF AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY PURSUANT TO SECTION 242 OF THE GENERAL CORPORATION LAW
The undersigned, being the president and secretary of Aircraft International Management Company, hereby certify that: 1. The name of the Corporation is Aircraft International Management Company. 2. A Certificate of Incorporation was filed in the Office of the Secretary of State of Delaware on January 20, 1987 and a certified copy thereof was recorded on January 20, 1987 in the office of the Recorder of Deeds of New Castle County, Delaware. 3. A Restated Certificate of Incorporation was filed in the Office of the Secretary of State of Delaware on January 10, 1994 and a certified copy thereof was recorded on January 10, 1994 in the office of the Recorder of Deeds of New Castle County, Delaware. 4. ARTICLE 4 of the Restated Certificate of Incorporation of the Corporation which deals with authorized shares is hereby amended to increase the aggregate number of shares which the Corporation shall have authority to issue from 10,000 shares of the par value of $1 per share to 100,000 shares of the par value of $1 per share. To effect such amendment, ARTICLE 4 is hereby amended to read as follows:
	4. The total number of shares of stock which the Corporation shall have authority to issue is one hundred thousand (100,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Hundred Thousand Dollars ($100,000.00).
5. The capital of the Corporation will not be reduced under or by reason of the foregoing amendment. 6. The foregoing amendment to the certificate of incorporation has been duly adopted in accordance with the applicable provisions of Section 228 and Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Aircraft International Management Company has caused its corporate seal to be hereunto affixed and this Certificate to be signed by the president of the Corporation, and attested by its secretary this 18 ^th day of October, 1994.
[SEAL] Attest: /s/ WM. SHAPIRO William Dana Shapiro Secretary		/s/ Paul F. Naughton Paul F. Naughton President
District of Columbia) ss: BE IT REMEMBERED, that on this 18 ^th day of October, 1994, personally appeared before me Paul F. Naughton, known to me personally to be such, who executed the foregoing Certificate of Amendment of the Restated Certificate of Incorporation, and acknowledged that he is the President of Aircraft International Management Company, that he executed the foregoing document as President of said corporation, and that the statements contained therein are true. IN WITNESS WHEREOF, I have hereunto set my hand and seal of office and day and year aforesaid.
		/s/ KIM B. JONES Notary Public My Commission Expires: 5-14-95

SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 02:00 PM 10/27/1994 944205893 - 2115369
CERTIFICATE OF AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION AFTER PAYMENT OF CAPITAL OF AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY PURSUANT TO SECTION 242 OF THE GENERAL CORPORATION LAW
The undersigned, being the president and secretary of Aircraft International Management Company, hereby certify that: 1. The name of the Corporation is Aircraft International Management Company. 2. A Restated Certificate of Incorporation was filed in the Office of the Secretary of State of Delaware on January 10, 1994 and a certified copy thereof was recorded on January 10, 1994 in the office of the Recorder of Deeds of New Castle County, Delaware. 3. A Certificate of Amendment to the Restated Certificate of Incorporation was filed in the Office of the Secretary of State of Delaware on October 18, 1994 and a certified copy thereof was forwarded by the Secretary of State to the Recorder of Deeds of New Castle County, Delaware. 4. ARTICLE 4 of the Restated Certificate of Incorporation of the Corporation which deals with authorized shares is hereby amended to provide for two classes of stock, and two series within one such class, which the Corporation shall have authority to issue of one thousand (1,000) shares of Series A Common Stock of the par value of $1 per share, ten thousand (10,000) shares of Series B Common Stock of the par value of $1 per share, and one thousand (1,000) shares of Noncumulative Preferred Stock of the par value of $1 per share. To effect such amendment, ARTICLE 4 is hereby amended to read as follows:
	4. The Corporation is authorized to issue twelve thousand (12,000) shares of stock, divided into classes, or series within a class, as provided below:
	(a)	one thousand (1,000) shares of Series A Common Stock ("Series A") and the par value of each of such shares of Series A is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00); and
	(b)	ten thousand (10,000) shares of Series B Common Stock ("Series B") and the par value of each of such shares of Series B is One Dollar ($1.00) amounting in the aggregate to Ten Thousand Dollars ($10,000.00) and
	(c)	one thousand (1,000) shares of Noncumulative Preferred Stock ("Preferred Stock") and the par value of each of such shares of Preferred Stock is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00) and which (i) shall have a noncumulative dividend rate of One Thousand Nine Hundred Sixty Dollars ($1,960.00) per share per annum, to the extent such dividend is declared by the Board of Directors of the Corporation, (ii) be redeemable at the price of Twenty-Eight Thousand Dollars ($28,000.00) per share, plus an amount equal to accrued, but unpaid, dividends; (iii) have dividends payable annually, if declared, on the first day of June; (iv) shall not be entitled to the benefits of any sinking fund; and (v) shall not be entitled to any conversion or exchange privileges.
5. The capital of the Corporation will not be reduced under or by reason of the foregoing amendment. 6. The foregoing amendment to the certificate of incorporation has been duly adopted in accordance with the applicable provisions of Section 228 and Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Aircraft International Management Company has caused its corporate seal to be hereunto affixed and this Certificate to be signed by the president of the Corporation, and attested by its secretary this 27 ^th day of October, 1994.
[SEAL] Attest: /s/ WM. SHAPIRO William Dana Shapiro Secretary			/s/ Paul F. Naughton Paul F. Naughton President
District of Columbia) ss: BE IT REMEMBERED, that on this 27 ^th day of October, 1994, personally appeared before me Paul F. Naughton, known to me personally to be such, who executed the foregoing Certificate of Amendment of the Restated Certificate of Incorporation, and acknowledged that he is the President of Aircraft International Management Company, that he executed the foregoing document as President of said corporation, and that the statements contained therein are true. IN WITNESS WHEREOF, I have hereunto set my hand and seal of office and day and year aforesaid.
			/s/ KIM B. JONES Notary Public My Commission Expires: 5-14-95

CERTIFICATE OF AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION AFTER PAYMENT OF CAPITAL OF AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY PURSUANT TO SECTION 242 OF THE GENERAL CORPORATION LAW
The undersigned, being the President and Secretary of Aircraft International Management Company, a Delaware corporation (the "Corporation") hereby certify that: 1. The name of the Corporation is Aircraft International Management Company. 2. A Restated Certificate of Incorporation was filed in the Office of the Secretary of State of Delaware on January 10, 1994 and a certified copy thereof was recorded on January 10, 1994 in the office of the Recorder of Deeds of New Castle County, Delaware. 3. A Certificate of Amendment to the Restated Certificate of Incorporation was filed in the Office of the Secretary of State of Delaware on October 18, 1994 and a certified copy thereof was forwarded by the Secretary of State to the Recorder of Deeds of New Castle County, Delaware. 4. A Certificate of Amendment to the Restated Certificate of Incorporation was filed in the Office of the Secretary of State of Delaware on October 27, 1994 and a certified copy thereof was forwarded by the Secretary of State to the Recorder of Deeds of New Castle County, Delaware. 5. ARTICLE 4 of the Restated Certificate of Incorporation of the Corporation which deals with authorized shares is hereby amended to decrease the aggregate number of shares which are authorized and to provide for one class of stock. The Corporation shall have the authority to issue ten thousand (10,000) shares of common stock of the par value of $1 per share. To effect such amendment, ARTICLE 4 is hereby amended to read as follows:
	4. The total number of shares of stock which the Corporation shall have authority to issue is ten thousand (10,000) all of which shall be shares of common stock each with a par value of One Dollar ($1) per share amounting in the aggregate to ten thousand dollars ($10,000.00).
6. Each share of Series B Common Stock of the Corporation, $1.00 par value, issued and outstanding as of the effective time of the foregoing amendment shall be converted without further act of the Corporation or of its sole stockholder into one share of common stock of the Corporation, $1.00 par value, that shall remain issued and outstanding as of and from the effective time of the foregoing amendment. 7. The issued and outstanding capital of the Corporation will not be reduced under or by reason of the foregoing amendment. 8. The foregoing amendment to the Restated Certificate of Incorporation has been duly adopted in accordance with the applicable provisions of Section 228 and Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Aircraft International Management Company has caused its corporate seal to be hereunto affixed and this Certificate to be signed by the President of the Corporation, and attested by its Secretary this 21 ^st day of March, 1996.
[SEAL] Attest: /s/ WM. SHAPIRO William Dana Shapiro Secretary			/s/ Paul F. Naughton Paul F. Naughton President
District of Columbia) ss: BE IT REMEMBERED, that on this 21 ^st day of March, 1996, personally appeared before me Paul F. Naughton, known to me personally to be such, who executed the foregoing Certificate of Amendment of the Restated Certificate of Incorporation, and acknowledged that he is the President of Aircraft International Management Company, that he executed the foregoing document as President of said corporation, and that the statements contained therein are true. IN WITNESS WHEREOF, I have hereunto set my hand and seal of office and day and year aforesaid.
		/s/ CHERYL A. LONGENECKER Notary Public My Commission Expires: January 31, 2000

STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 06/20/1997 971207086 - 2115369
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE AND REGISTERED AGENT OF AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY
The Board of Directors of: AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY a Corporation of the State of Delaware, on this 9 ^th day of June, A.D. 1997, do hereby resolve and order that the location of the Registered Office of this Corporation within this State be, and the same hereby is: 1013 Centre Road, in the City of Wilmington, in the County of New Castle, Delaware, 19805. The name of the Registered Agent therein and in charge thereof upon whom process against the Corporation may be served, is: CORPORATION SERVICE COMPANY. AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY a Corporation of the State of Delaware, does hereby certify that the foregoing is a true copy of a resolution adopted by the Board of Directors at a meeting held as herein stated. IN WITNESS WHEREOF, said corporation has caused this Certificate to be signed by its Secretary this 4 ^th day of June A.D. 1997.
	/s/ LESLIE C. ZIMBERT Authorized Officer LESLIE C./ZIMBERG

CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY
AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY, a corporation organized and existing under and by virtue of the Delaware General Corporation Law (the "Corporation"), DOES HEREBY CERTIFY: FIRST : That the Board of Directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the Board, adopted a resolution proposing and declaring advisable the following amendments to the Restated Certificate of Incorporation of said corporation: RESOLVED, that the Restated Certificate of Incorporation be amended deleting Article 3 of the Restated Certificate of Incorporation in its entirety and substituting the following in lieu thereof: 3. (a) The purposes of the Corporation are to: (i) acquire the cash contributed to the Corporation by its stockholders and to issue shares of the capital stock of the Corporation in exchange therefor; (ii) make or acquire Permitted Investments; (iii) execute, deliver and perform the Shareholders' Agreement, dated as of April 22, 1998, by and among the Corporation, PCI Holdings, Inc. a Delaware corporation ("PCIH"), and BT Ever, Inc., a New York corporation ("BT Ever"), a Purchase and Sale Agreement, dated as of April 22, 1998, by and between the Corporation and PCIH, and a Recapitalization Agreement, dated as of April 22, 1998, by and between the Corporation and BT Ever; (iv) perform such other activities as are specifically provided in this Article 3 of the Restated Certificate of Incorporation; and (v) engage in any activity and exercise any powers permitted to corporations under the laws of the State of Delaware which are necessary or incidental to the foregoing; provided that (A) any asset acquired, investment made or activity engaged in by the Corporation shall be Bank Eligible, and (B) in no event shall the Corporation accept demand deposits, including, without limitation, demand deposits that the depositor may withdraw by check or similar means for payment to third parties. (b) For purposes of this Article 3, the following capitalized terms shall have the following meanings:
	"Affiliate" means, with respect to any Person (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any officer, director, manager, general partner, managing member or trustee of such Person, or (iii) any Person who is an officer, director, manager, general partner, managing member, or trustee of any Person described in clauses (i) or (ii) of this sentence. For purposes of this definition, the terms "controlling," "controlled by," or "under common control with" shall mean the possession, direct, or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. "Bank Eligible" means, in respect of any asset or activity, that such asset is eligible for acquisition by, or such activity may be engaged in, by BTCo at a location where BTCo is authorized to maintain such asset or engage in such activity under applicable law, including without limitation: (i) the banking laws of the State of New York, (ii) the Federal Reserve Act, as amended, 12 USC Section 221, et seq., (iii) the Bank Holding Company Act of 1956, as amended, 12 USC Section 1941 et seq., and (iv) the Federal Deposit Insurance Act, as amended, 12 USC Section 181 1, et seq. "BTCo" means Bankers Trust Company, a banking corporation organized under the banking laws of the State of New York. "Moody's" means Moody's Investors Services, Inc. "PCI" means Potomac Capital Investment Corporation, a Delaware corporation. "PCI Note" shall have the meaning provided in clause (i) of the definition of "Permitted Investments." "PCIH Note" means the promissory note, dated April 22, 1998, issued by PCIH to the Corporation. "Permitted Investments" means:
(i) A debt obligation ("PCI Note") of PCI or a direct or indirect wholly owned subsidiary of PCI fully and unconditionally guaranteed by PCI that (x) provides for interest-only payments or accrual of interest with compounding at an interest rate equal to PCI's then current borrowing rate for equivalent maturity securities, (y) is either a demand obligation or has a maturity no later than April 22, 2003, and (z) is substantially in the form of the PCIH Note, provided that PCI's senior unsecured debt is rated at least Baa3 by Moody's or BBB- by S&P on the date such obligation is acquired by the Corporation; (ii) A debt obligation of any issuer other than PCI or its Affiliates rated at least Baa3 by Moody's or BBB- by S&P with a maturity no later than April 22, 2003; (iii) The PCIH Note; (iv) Temporary Investments; (v) Intercompany receivables in existence on the date hereof; and (vi) Office equipment and supplies and such other personal property as may be reasonably required to maintain an office for, and conduct the operations of, the Corporation.
	"Person" means any individual, partnership (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity. "S&P" means Standard & Poor's Corporation. "Temporary Investments" means all cash or cash equivalents including, without limitation, cash on deposit in financial institutions, certificates of deposit, commercial paper, treasury bills and other high quality short-term debt obligations rated at least A-1 by S&P and P-l by Moody's and having a maximum maturity of one year or less together with money market mutual funds the assets of which consist solely of such instruments.
(c) On or about April 22, 2002, the Corporation shall declare and pay a dividend or other distribution to its common stockholders equal to the excess of the net fair market value of the Corporation over $207,000,000. RESOLVED, that the Restated Certificate of Incorporation be amended by adding a new Article 10 reading in its entirety as follows:
	10. Notwithstanding anything in the Delaware General Corporation Law or this Restated Certificate of Incorporation to the contrary, no amendment to Article 3 or Article 4 of the Restated Certificate of Incorporation and no merger, consolidation, dissolution or liquidation of the Corporation may be effected without the affirmative vote of the holders of all of the capital stock of the Corporation.
SECOND : That in lieu of a meeting and vote of stockholders, the stockholders have given unanimous written consent to said amendments in accordance with the provisions of Section 228 of the Delaware General Corporation Law. THIRD : That the aforesaid amendment was duly adopted in accordance with the provisions of Sections 242 and 228 of the Delaware General Corporation Law. IN WITNESS WHEREOF, said AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY has caused this certificate to be signed by Betty F. Davis, Vice President and Controller, this 22 ^nd day of April, 1998.
		/s/ BETTY F. DAVIS Betty F. Davis Vice President and Controller

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

By-Laws

of

Aircraft International Management Company

(a Delaware corporation)

As amended
through
December 6, 1993

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

AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Aircraft International Management Company (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETINGS OF SHAREHOLDERS

     Section 1.  The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the Board) and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

     Section 2.  A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

     Section 3.  Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation, or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

     Section 1.  The Board of Directors of the Corporation shall consist of two persons. The Directors need not be shareholders. Each Director shall hold office until his respective successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

     Section 2.  One member of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, or by these By-Laws, be the acts of the Board of Directors.

     Section 3.  (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

     (b)  Any director or the entire Board may be removed, with. or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof.

     (c)  Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

     Section 4.  (a) As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article.

     (b)  Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

     (c)  The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting.

     Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

     (d)  The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

     Section 5.  The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

     Section 6.  Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

     Section 7.  Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

     Section 8.  The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize.

     Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

     Section 9.  Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

The Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification of the director, officer, employee or agent is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include expenses (including attorneys' fees), judgments, fines and amounts paid in settlement. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding and the repayment of such advancements will be required only if it shall ultimately be determined that the director, officer, employee or agent who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person for any such expenses to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

Article V

OFFICERS

     Section 1.  The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President, shall elect one or more Vice Presidents, a Secretary and a Treasurer, and from time to time may elect such Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

     Section 2.  The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

     Section 3.  Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

     Section 1.  The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the date of its issue.

     Section 2.  The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

     Section 3.  No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

     All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

     All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

     Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

SECOND AMENDED AND RESTATED CERTIFICATE OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P.
THIS Second Amended and Restated Certificate of Limited Partnership of Aircraft Leasing Associates, L.P. (the "Partnership"), dated November 30, 1993, has been duly executed and is being filed by the undersigned, being the sole general partner, in accordance with the provisions of 6 Del. C. Section 17-210, to amend and restate the Amended and Restated Certificate of Limited Partnership, which was filed on November 23, 1993 with the Secretary of State of the State of Delaware (the "Amended and Restated Certificate"). The original Certificate of Limited Partnership of the Partnership was filed on November 19, 1993 with the Secretary of State of the State of Delaware, to form a limited partnership under the Delaware Revised Uniform Limited Partnership Act (6 Del. C. Section 17-101, et seq. ). The Amended and Restated Certificate is hereby amended and restated in its entirety to read as follows: 1. Name. The name of the limited partnership is Aircraft Leasing Associates, L.P. 2. Registered Office. The registered office of the Partnership in the State of Delaware is located at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. 3. Registered Agent. The name and address of the registered agent of the Partnership for service of process in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. 4. General Partner. The name and business address of the sole general partner of the Partnership are as follows:
	TIFD II INC. 3720 Howard Hughes Parkway Suite 170 Las Vegas, Nevada 89109
IN WITNESS WHEREOF, the undersigned has executed this Second Amended and Restated Certificate of Limited Partnership as of the date first-above written.
	TIFD II INC. BY: /s/ Eric M. Dull Name: Eric M. Dull Title: VP

AMENDED AND RESTATED CERTIFICATE OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P.
This amended and Restated Certificate of Limited Partnership of Aircraft Leasing Associates, L.P. (the "Partnership"), dated November 23, 1993, has been duly executed and is being filed by the undersigned, being the sole general partners, in accordance with the provisions of 6 Del, C, Section 17-310, to amend and restate the original certificate of Limited Partnership of the Partnership, which was filed on November 19, 1993 with the Secretary of State of the State of Delaware (the "Certificate"), to form a limited partnership under the Delaware Revised Uniform Limited Partnership Act (6 Del, C, Section 17-101, et seq. ). The Certificate is hereby amended and restated in its entirety to read as follows: 1. Name. The name of the limited partnership is Aircraft Leasing Associates, L.P. 2. Registered Office. The registered office of the Partnership in the State of Delaware is located at the Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. 3. Registered Agent. The name and address of the registered agent of the Partnership for service of process in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. 4. General Partner. The name and business address of the sole general partner of the Partnership are as follows:
	TITD II INC. 3720 Howard Hughes Parkway Suite 200 Las Vegas, Nevada 89109
IN WITNESS WHEREOF, the undersigned has executed this Amended and Registered Certificate of Limited Partnership as of the date first-above written.
		TIFD II INC. By: /s/ Eric M. Dull Name: Eric M. Dull Title: Vice President

EXECUTION COPY
AGREEMENT OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P. A DELAWARE LIMITED PARTNERSHIP
The undersigned General partner and Limited partner hereby form a limited partnership pursuant to and in accordance with the Delaware Revised Uniform Limited Partnership Act, 6 Del, C , 17-101, et, sec. (the "Act"), and hereby agree as follows: 1. Name. The name of the limited partnership formed hereby (the "Partnership") shall be Aircraft Leasing Associates, L.P. 2. Purpose. The purpose of the partnership is to engage in any and all lawful activities to which the General partner and the Limited Partner unanimously agree. 3. Registered office. The registered office of the Partnership in the State of Delaware is located at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19301. 4. Registered Agent. The name and address of the registered agent of the partnership for service of process in the State of Delaware is located at the Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801 5. Partners. The name and mailing address or the General Partner and the Limited Partner (collectively, the "Partners") are as follows: General Partner TIFD II INC, 1600 Summer Street Stamford, Connecticut 06927 Attn: Manager of Operations - Commercial Aviation Limited Partner TRANSPORATION & INDUSTRIAL FUNDING CORPORATION 1600 Summer Street Stamford Connecticut 06927 Attention: Manager of Operations - Commercial Aviation Transportation & Industrial Funding Corporation is admitted as a limited partner of the Partnership and TIFD II INC. is admitted as the general partner of the partnership upon the formation of the Partnership. 6. Powers. The powers of the General Partner include all powers, statutory and otherwise, possessed by general partners under the laws of the State of Delaware. 7. Term. The partnership shall dissolve, and its affairs shall be wound up, upon the earliest to occur or (a) the unanimous decision of the partners, (b) the sale by the partnership of all or substantially all of its property, (c) an event of dissolution of the partnership under the Act or (d) the removal, withdrawal or dissolution of the General Partner. 8. Capital Contributions. The Partners have contributed the following amounts, in cash, and no other property: General Partner: TIFD II INC. $100 Limited Partner: Transportation & Industrial Funding Corporation $100 9. Additional Contributions. No Partner is required to make any additional capital contribution to the partnership. 10. Allocation of Profits and Losses. The Partnership's profits and losses shall be allocated in proportion to the capital contributions of the partners. 11. Distributions. At the time determined by the General Partner, but at least once during each fiscal year, the General Partner shall cause the Partnership to distribute any cash held by it which is not reasonably necessary for the operation of the Partnership. Cash available for distribution shall be distributed to the partners in the same proportion as their capital account balances. 12. Assignments. A partner may assign all or any part of its partnership interest only with the consent of the other Partners. A transferee of a partnership interest only can become a substituted partner with the consent of the other partners. 13. Withdrawal. No right given to any Partner to withdraw from the Partnership. 14. Limited Liability. The limited Partner shall not have any liability for the obligations or liabilities of the Partnership accept to the extent provided in the Act. 15. Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware. IN WITNESS WHEREOF. The undersigned have duly executed this Agreement of Limited Partnership as of the ______ day of November, 1993.
[signatures follow on separate pages]
	GENERAL PARTNER: TIFD II INC. /s/ John M. Greely BY Name: JOHN M. GREELEY Title: V.P.
THIS IS A SIGNATURE PAGE TO THE AGREEMENT OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS GENERAL PARTNER.
	LIMITED PARTNER: TRANSPORATION AND INDUSTRIAL FUNDING CORPORATION /s/ John L. Sullivan BY: Name: John L. Sullivan Title: Senior Vice President
THIS IS A SIGNATURE PAGE TO THE AGREEMENT OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS LIMITED PARTNER.

EXECUTION COPY CERTIFICATE OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P.
This Certificate of Limited Partnership of Aircraft Leasing Associates, L.P. (the Partnership), dated as of the 19 ^th day of November, 1993, is being duly executed and filed by TIFD II INC., a Delaware Corporation, as the sole general partner, to form a limited partnership under the Delaware Revised Uniform Limited Partnership Act (6 Del . C. Section 17-101, et seq. ). 1. Name. The name of the limited partnership formed hereby shall be Aircraft Leasing associates, L.P. 2. Registered Office. The registered office of the Partnership in the State of Delaware is located at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. 3. Registered Agent. The name and address of the registered agent of the partnership for service of process in the State of Delaware is located at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. 4. General Partner. The name and mailing address of the sole general partner of the Partnership are as follows:
	TIFD II INC. 1600 Summer Street Stamford, Connecticut 06927 Attn: Mgr. of Operations - Commercial Aviation
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Limited Partnership as of the date first above written.
		TIFD II INC. /s/ John M. Greeley By: Name: John M. Greeley Title: V.P.

EXECUTION COPY
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P. among TIFD II INC. TRANSPORTATION & INDUSTRIAL FUNDING CORPORATION and POTOMAC AIRCRAFT LEASING CORPORATION DATED DECEMBER 2, 1993
SECTION 6.					ROLE OF LIMITED PARTNERS					45
		6.1	Rights or Powers							45
		6.2	Voting Rights							45
		6.3	Procedure for Consent							45
SECTION 7.					REPRESENTATIONS, WARRANTIES AND COVENANTS					46
		7.1	In General							46
		7.2	Representations, Warranties and Covenants							46
		7.3	Additional Representations, Warranties and Covenants By Investor							50
		7.4	Additional Representations, warranties and Convenants By TIFC and Assetco							50
		7.5	Indemnification and Cooperation regarding claims							51
		7.6	Damage Payments							52
SECTION 8.					ACCOUNTING, BOOKS AND RECORDS					52
		8.1	Accounting, Books and Records							52
		8.2	Reports							53
		8.3	Tax Matters Partner; Tax Information							54
SECTION 9.					AMENDMENTS					55
		9.1	Amendments							55
		9.2	Voting and Consent							55
SECTION 10.					TRANSFERS					55
		10.1	Restriction on Transfers							55
		10.2	Permitted Transfers							56
		10.3	Conditions to Permitted Transfers							56
		10.4	Prohibited Transfers							58
		10.5	Rights of Unadmitted Assignees							58
		10.6	Admission of Substituted Partner's							59
		10.7	Distributions and Allocations in Respect of Transferred Interests							59
		10.8	Retirement of Investor's Interest							60
SECTION 11.					GENERAL PARTNER					62
		11.1	Covenant Not to Withdraw, Transfer, or Dissolve							62
		11.2	Termination of Status as General Partner							63
		11.3	Election of Additional General Partners							64
SECTION 12.					DISSOLUTION AND WINDING UP					64
		12.1	Dissolution Events							64
		12.2	Winding Up							66
		12.3	Compliance With Certain Requirements of Regulations Deficit Capital Accounts							68
		12.4	Deemed Distribution and Recontribution							69
		12.5	Rights of Partners							70
		12.6	Notice of Dissolution							70
		12.7	Allocations and Payments During Period of Liquidation							70
SECTION 13.					POWER OF ATTORNEY					71
		13.1		General Partner as Attorney-In-Fact						71
		13.2		Nature as Special Power						72
SECTION 14.					MISCELLANEOUS					72
		14.1		Notices						72
		14.2		Binding Effect						73
		14.3		Construction						73
		14.4		Time						73
		14.5		Headings						74
		14.6		Severability						74
		14.7		Incorporation by reference						74
		14.8		Further Action.						74
		14.9		Variation of Pronouns						74
		14.10		GOVERNING LAW						74
		14.11		Waiver of Action for Partition; No Bill For Partnership Accounting						75
		14.12		Counterpart Execution						75
		14.13		Sole and Absolute Discretion						75
		14.14		Specific Performance						75
		14.15		No Material Impairment						75
		14.16		Duties and Liabilities of Partners						76
		14.17		WAIVER OF JURY TRIAL						76
EXECUTION COPY
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P.
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is entered into and shall be effective as of the 2nd day of December, 1993, by and among TIFD II INC. ("Assetco" or the "General Partner"), a Delaware corporation, as the General Partner, and TRANSPORTATION & INDUSTRIAL FUNDING CORPORATION ("TIFC"), a Delaware corporation and POTOMAC AIRCRAFT LEASING CORPORATION ("Investor"), a Nevada corporation, as the Limited Partners, pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act, on the following terms and conditions:
SECTION 1. THE PARTNERSHIP
1.1 Formation. The Partnership was formed on November 19, 1993 as a limited partnership between TIFC and Assetco pursuant to the provisions of the Act and upon the terms and conditions set forth in the Agreement of Limited Partnership of Aircraft Leasing Associates, L.P. (the "Original Partnership Agreement"). The Partners hereby agree to continue the Partnership as a limited partnership pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. The Partners hereby amend and restate the Original Partnership Agreement in its entirety as set forth herein. Simultaneously with the execution and delivery of, and pursuant to, this Agreement, Investor shall be admitted as a Limited Partner. 1.2 Name. The name of the Partnership shall continue to be Aircraft Leasing Associates, L.P., and all business of the Partnership shall continue to be conducted in such name or, with the unanimous consent of the Partners, under any other name. 1.3 Purposes. The primary purposes of the Partnership are to acquire, manage, protect, and conserve the Schedule A Assets and to perform its obligations under the Transaction Documents. Other purposes of the Partnership are to acquire, manage, protect and conserve the other assets described in Section 5.3(m) hereof as may be acquired by the Partnership, to invest funds in Permitted Investments, to make such additional investments and engage in such additional business endeavors as may be authorized pursuant to this Agreement, and to engage in any and all activities related or incidental thereto. 1.4. Principal Place of Business. The principal place of business of the Partnership shall be at 3720 Howard Hughes Parkway, Suite 170, Las Vegas, Nevada 89109, Attn: Bryan Glaus. The General Partner may change the principal place of business of the Partnership to any other place with the unanimous consent of the Partners. 1.5 Term. The term of the Partnership commenced on the date the certificate of limited partnership of the Partnership described in section 17-201 of the Act (the "Certificate") was filed in the office of the Secretary of State of Delaware and shall continue until the earlier to occur of December 31, 2020, or the winding up and liquidation of the Partnership and the completion of its business following a Dissolution Event, as provided in Section 12 hereof. 1.6 Filings; Agent for Service of Process. (a) The General Partner caused the Certificate to be filed in the office of the Secretary of State of Delaware in accordance with the provisions of the Act. The General Partner shall take any and all other actions necessary to perfect and maintain the status of the Partnership as a limited partnership under the laws of Delaware. The General Partner shall cause amendments to the Certificate to be filed whenever required by the Act. Such amendments may be executed on behalf of the Partnership by the General Partner and by each other general partner designated in the amendment as a new general partner. (b) The General Partner shall execute and cause to be filed original or amended certificates and shall take any and all other actions as may be necessary to perfect and maintain the status of the Partnership as a limited partnership or similar type of entity under the laws of any jurisdiction in which the Partnership engages in business. (c) The registered agent for service of process on the Partnership shall continue to be The Corporation Trust Company or any successor as appointed by the General Partner in accordance with the Act. The.registered office of the Partnership in the State of Delaware is located at Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. (d) Upon the dissolution and completion of the winding up and liquidation of the Partnership, the General Partner (or, in the event there is no General Partner, any Person appointed pursuant to Section 12.2 hereof) shall promptly execute and cause to be filed appropriate certificates of cancellation or dissolution in accordance with the Act and the laws of any jurisdiction in which the Partnership has filed certificates. 1.7 Title to Property. All real and personal property owned by the Partnership shall be owned by the Partnership as an entity and no Partner shall have any ownership interest in such property in its individual name or right. Each Partner's Interest shall be personal property for all purposes. 1.8 Payments of Individual Obligations. The Partnership's credit and assets shall be used solely for the benefit of the Partnership. No asset of the Partnership shall be transferred or encumbered for or in payment of any individual obligation of any Partner. 1.9 1ndependent Activities; Transactions with Affiliates. (a) Affiliates of the General Partner and, so long as the General Partner is in satisfaction of its obligations pursuant to Section 5.1 hereof, the General Partner shall be free to serve any other Person or enterprise in any capacity that it may deem appropriate in its discretion. (b) Except as provided in Section 1.9(a), insofar as permitted by applicable law, each Partner(acting on its own behalf) and each of its Affiliates may engage, notwithstanding this Agreement, in whatever activities they choose, whether the same are competitive with the Partnership or otherwise, without having or incurring any obligation to offer any interest in such activities to the Partnership or any Partner. Neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Partner or its Affiliates from engaging in such activities, or require any Partner to permit the Partnership or, any Partner or its Affiliates to participate in any such activities. As a material part of the consideration for the execution of this Agreement by each Partner, each Partner hereby waives, relinquishes, and renounces any such right or claim of participation. (c) To the extent permitted by applicable law, in furtherance of the purposes of the Partnership set forth in Section 1.3 hereof, and except as otherwise provided in this Agreement, the General Partner, when acting on behalf of the Partnership, is hereby authorized to purchase property from, sell property to, or otherwise deal with any Partner, acting on its own behalf, or any Affiliate of any Partner, provided that any such purchase, sale or other transaction shall be made on terms and conditions which are no less favorable to the Partnership than if the sale, purchase or other transaction had been entered into with an independent third party; provided, however, that any transaction described in this Section 1.9(c) in excess of $250,000 that is not otherwise expressly permitted or contemplated by the Transaction Documents (such permitted transactions to include, without limitation, the acquisition by the Partnership from any Person of assets pursuant to a Master Lease, including without limitation Section 7, 8 or 13 of a Master Lease) shall require the approval of all Partners. Notwithstanding the foregoing, unless the Partners otherwise unanimously agree and subject to Section 5.3 (l) hereof, any sale of Schedule A Assets by the Partnership to an Affiliate must be consummated at a cash price of not less than the Appraised Value of such assets. The Partners agree that this Agreement, the Master Leases, any GECC Loan, the Contribution Agreements, the Fee Agreement, the Trust Agreements, the Assignment and Assumption Agreements, the GECC Demand Note, DRO Pledge Agreement, the Letter Agreement, and the GECC Indemnification Agreement satisfy this third-party standard. (d) Each Limited Partner and any Affiliate thereof may also lend money to, borrow money from, act as a surety,guarantor or endorser for, guarantee or assume one or morespecific obligations of, provide collateral for, and transactother business with the Partnership and, subject to other applicable law, has the same rights and obligations with respect thereto as a Person who is not a Partner. The existence of these relationships and acting in such capacities will not result in the Limited Partners being deemed to be participating in the control of the business of the Partnership or otherwise affect the limitedliability of the Limited Partners. If a Limited Partner or any Affiliate thereof is a lender, in exercising its rights as a lender, including making its decision on whether to foreclose on property of the Partnership, such lender will have no duty to consider (i) its status as a Partner or an Affiliate of a Partner, (ii) the interests of the Partnership, or (iii) any duty it may have to a Partner or the Partnership. 1.10 Definitions. Capitalized words and phrases used in this Agreement have the following meanings: " Act " means the Delaware Revised Uniform Limited Partnership Act, as set forth in the Del. Code Ann. Tit. 6, S 17-101 to 17-1109, as amended from time to time (or any corresponding provisions of succeeding law). "Additional Capital Contributions" means, with respect to each Partner, any Capital Contributions made by such Partner under this Agreement other than pursuant to Section 2.1 or 2.2 hereof, reduced by the amount of any liabilities of such Partner assumed by the Partnership in connection with such Capital Contribution or which are secured by any property contributed by such Partner as a part of such Capital Contribution. In the event all or a portion of an Interest is transferred in accordance with the terms of this Agreement, the transferee shall be treated as if it made the Additional Capital Contributions of the transferor to the extent they relate to the transferred Interest. " Adjusted Capital Account Deficit" means, with respect to any Limited Partner, the deficit balance, if any, in such Partner's Capital Account as of the end of the relevant Allocation Year, after giving effect to the following adjustments: (i) Credit to such Capital Account any amounts which such Partner is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Sections 1.704-2 (g) (1) and 1.704-2 (i) (5) of the Regulations; and (ii) Debit to such Capital Account the items described in Sections l.704-1(b) (2) (ii) (d) (4), 1.704-1(b) (2) (ii) (d)(5) and 1.704-1 (b) (2) (ii) (d)(6) of the Regulations. The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b) (2)(ii)(d) of the Regulations and shall be interpreted consistently therewith. "Affiliate" means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any officer, director, general partner or trustee of, or a Person serving in a similar capacity with respect to, such Person, or (iii) any Person who is an officer, director, general partner, or trustee of any Person described in clause (i) or (ii) of this sentence. For purposes of this definition, the term "controlling," "controlled by" or "under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise. "Agreement" or "Partnership Agreement" means this Amended and Restated Agreement of Limited Partnership, as amended from time to time. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder," refer to this Agreement as a whole, unless the context otherwise requires. " Aircraft" has the meaning set forth in Section 1 of each of the Master Leases. "Allocation Year" means (i) the period commencing on the Effective Date and ending on December 31, 1993, (ii) the period commencing on January 1, 2000 and ending on October 31, 2000, (iii) the period commencing-on November 1, 2000 and ending on December 31, 2000, (iv) any twelve (12) month period commencing on January 1 and ending on December 31 beginning after the period set forth in clause (i) and not described in clauses (ii) or (iii) or (v) any portion of the periods described in clauses (i) through (iv) for which the Partnership is required to allocate Profits, Losses and other items of Partnership income, gain, loss or deduction pursuant to Section 3 hereof. "Applicable Rate" means seven and one-half percent (7.50%) per annum. "Appraisal Date" means: (i) In the event that the Partnership is liquidated pursuant to Section 12.2 hereof, the Appraisal Date shall be the Dissolution Event Date; (ii) In the event that Investor is retired pursuant to Section 10.8 hereof, the Appraisal Date shall be the Retirement Allocation Date; and (iii) In the event that a Schedule A Asset is required to be-appraised under a Master Lease, the Appraisal Date shall be the Expiration Date (without giving effect to any right of renewal under such Master Lease) under such Master Lease with respect to such Schedule A Asset. "Appraisal Process" means the procedure, described in this definition, for determining the Appraised Value of any Property (other than cash, temporary investments made pursuant to Section 5.7 hereof or Permitted Investments) as of any applicable Appraisal Date. The Appraised Value finally determined pursuant to the Appraisal Process shall be binding for all purposes of this Agreement and for all purposes of the Master Lease with respect to such Property where such Master Lease requires the appraised fair market value or Fair Rental Value of a Schedule A Asset to be determined by an appraiser selected by the Partnership. (i) First Appraiser. Investor shall choose an appraiser (x) from the list of appraisers set forth on Schedule B with respect to the appraisal of a Schedule A Asset, or (y) who is nationally recognized as qualified to appraise the asset being appraised, with respect to the appraisal of any asset other than a Schedule A Asset. The appraiser so chosen by Investor shall be instructed by Investor to determine the Appraised Value of such Schedule A Asset as of the applicable Appraisal Date and to deliver such appraisal to the Partnership and Investor no later than twenty (20) Business Days after the Appraisal Date. The value of such Schedule A Asset determined by the first appraiser shall be the finally determined Appraised Value of such Schedule A Asset unless the General Partner elects to choose a second appraiser pursuant to clause (ii) of this definition. (ii) Second Appraiser. The General Partner may choose a second appraiser (x) from the list of appraisers set forth on Schedule B with respect to the appraisal of a Schedule A Asset, or (y) who is nationally recognized as qualified to appraise the asset being appraised, with respect to the appraisal of any asset other than a Schedule A Asset. The General Partner shall promptly notify the Investor as to whether the General Partner accepts the first appraisal. If the General Partner elects to choose a second appraiser, the General Partner shall instruct such appraiser to determine the Appraised Value of such Schedule A Asset as of the applicable Appraisal Date and to deliver such appraisal to the Partnership and Investor within forty (40) Business Days after the Appraisal Date. If the difference between the first appraisal and the second appraisal is less than or equal to fifteen percent (15%) of the first appraisal, the finally determined Appraised Value of such Schedule A Asset shall be the arithmetic average appraised value of the two appraisals. If this difference is greater than fifteen percent (15%) of the first appraisal, the value of such Schedule A Asset determined by the second appraiser shall be the finally determined Appraised Value of such Schedule A Asset unless the Investor elects to choose a third appraiser pursuant to clause (iii) of this definition. (iii) Third Appraiser. If the difference between the first appraisal and the second appraisal is more than fifteen percent (15%) of the first appraisal, Investor may choose a third appraiser (not chosen as the first or second appraiser) (x) from the list of appraisers set forth on Schedule B with respect to the appraisal of a Schedule A Asset, or (y) who is nationally recognized as qualified to appraise the asset being appraised, with respect to the appraisal of any asset other than a Schedule,A Asset. Investor promptly shall notify the Partnership as to whether it accepts the second appraisal. If Investor elects to choose a third appraiser, Investor shall instruct such third appraiser to determine the Appraised Value of such Schedule A Asset as of the applicable Appraisal Date and to deliver such third appraisal to the Partnership and Investor within sixty (60) Business Days after the Appraisal Date. The finally determined Appraised Value of such Schedule A Asset shall be the arithmetic average appraised value of the three appraised values determined pursuant to the Appraisal Process. (iv) Appraisal Costs. The Person choosing the appraiser shall bear the cost of the appraisal. If an appraiser on Schedule B ceases to be in the relevant appraisal business, the Partner that designated such appraiser shall select a substitute appraiser (in the relevant appraisal business) to be included on Schedule B in lieu of the appraiser that ceased to be in the relevant appraisal business, subject to the consent of the other Partners listed on Schedule B as choosing appraisers, which consent shall not be unreasonably withheld or delayed. "Appraised Value" means, with respect to any asset being appraised, the price at which such asset would be sold by a willing and informed buyer to a willing and informed seller, neither being under any compulsion to buy or sell, taking into account all factors considered by the appraiser to affect the fair market value of the asset being appraised, as may be finally determined pursuant to the Appraisal Process, provided that with respect to any appraisal obtained in connection with the exercise of GECC's renewal or purchase options under the Master Leases, Appraised Value shall mean Fair Market Value and Fair Rental Value (as each such term is defined in the Master Leases). "Assetco" means TIFD II INC., a Delaware corporation, or any successor in interest. Assignment and Assumption Agreements" means, collectively, those certain Parent Assignment and Assumption Agreements, each dated as of November 29, 1993, in each case ' by and between GECC as Assignor and Ass6tco as Assignee, relating to the contribution of those Schedule A Assets listed in Schedule A as 1981 Boeing 727-227 (N304AS) and 1981 Boeing 727-227 (N305AS) and those certain Partnership Assignment and Assumption Agreements, each dated as of the Effective Date, in each case by and between Assetco as Assignor and the Partnership as Assignee, relating to the contribution of the Schedule A Assets to the Partnership. "Bankruptcy" means, with respect to any Person, a "Voluntary Bankruptcy" or an "Involuntary Bankruptcy. " A "Voluntary Bankruptcy" means, with respect to any Person, the inability of such Person generally to pay its debts as such debts become due, or an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors; or the filing of any petition or answer by such Person seeking to adjudicate it a bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property; or corporate action taken by such Person to authorize any of the actions set forth above. An "Involuntary Bankruptcy" means, with respect to any Person, without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation, or the filing of any such petition against such Person which petition shall not be dismissed within ninety (90) days, or, without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person which order shall not be dismissed within ninety (90) days. "Business Day" means a day of the year on which banks are not required or authorized to close in New York City. "Capital Account" means, with respect to any Partner, the Capital Account maintained for such Partner in accordance with the following provisions: (i) To each Partner's Capital Account there shall be credited such Partner's Capital Contributions, such Partner's distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Section 3.3 or 3.4 hereof, and the amount of any Partnership liabilities assumed by such Partner or which are secured by any Property distributed to such Partner; (ii) To each Partner's Capital Account there shall be debited the amount of cash and the Gross Asset Value of any Property distributed to such Partner pursuant to any provision of this Agreement, such Partner's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 3.3 or 3.4 hereof, and the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the Partnership; (iii) In the event all or a portion of an Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest;' (iv) In determining the amount of any liability for purposes of the definition of "Additional Capital Contribution," subparagraphs (i) and (ii) of this definition, and the definitions of "Original Capital Contribution" and of "Unreturned Capital," there shall be taken into account Code Section 752 (c) and any other applicable provisions of the Code and Regulations; and (v) In no event shall the Investor Guaranteed Payment or any other payments described in Code Section 707 (c) or 736 (a) (2) reduce the Capital Account of the recipient of such payment (except to the extent any deduction or allowance resulting from such payment is allocated to any Partner pursuant to Section 3 hereof). The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall' be interpreted and applied in a manner consistent with such Regulations. In the event the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Partnership or any Partner), are computed in order to comply with such Regulations, the General Partner may make, with the consent of the Investor (which consent shall not be withheld unreasonably) such modification, provided, however, that no adjustments shall be made to Capital Accounts that could adversely affect the amounts to be received by any Partner pursuant to Sections 10 or 12 hereof without the prior written consent of such Partner. The General Partner also shall make, with the consent of the Investor (which consent shall not be withheld unreasonably), (i) any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of Partnership capital reflected on the Partnership's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b) (2) (iv) (a), provided, however, that no adjustments shall be made to Capital Accounts that could adversely affect the amounts to be received by any Partner pursuant to Sections 10 or 12 hereof without the prior written consent of such Partner, and (ii) appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b). "Capital Contribution" means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership with respect to the Interest held by such Partner, including Additional Capital Contributions. The principal amount of a promissory note which is not readily traded on an established securities market and which is contributed to the Partnership by the maker of the note (or a Partner related to the maker of the note within the meaning of Regulations Section 1.704-1(b) (2) (ii) (c) shall not be included in the Capital Account of any Partner until the Partnership makes a taxable disposition of the note or until (and to the extent) principal payments are made on the note, all in accordance with Regulations Section 1.704-1(b )(2) (iv)(d)(2). In the event all or a portion of an Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Contributions of the transferor to the extent they relate to the transferred Interest. "Certificate" has the meaning set forth in Section 1.5 hereof. "Code" means the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law). "Contribution Agreements" means, collectively, that certain Parent Contribution Agreement dated November 29, 1993 between GECC and Assetco and those certain Partnership Contribution Agreements dated as of the Effective Date between Assetco and the Partnership. "Debt" means (i) any indebtedness for borrowed money or deferred purchase price of property evidenced by a note, bonds, or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by the Partnership whether or not the Partnership has assumed or become liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement (the principal amount of such obligation shall be deemed to be the notional principal amount on which such swap is based), and (v) obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii) and (iv) above; provided, however, that Debt shall not include (x) trade credit and any other form of voluntary liability incurred in the ordinary course of the Partnership's business and payable in accordance with customary practices (or that are being-contested in good faith by appropriate proceedings), (y) any form or type of obligation or indebtedness (A) contained in, required by or created pursuant to the Lease Documentation relating to the Schedule A Assets, or (B) created by or otherwise contemplated by the Transaction Documents, or (z) liabilities described in Section 5.3(n) or 5.6(b) hereof. "Depreciation" means, for each Allocation Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Allocation Year for U.S. federal income tax purposes, except that if the Gross Asset Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner with the unanimous consent of the Limited Partners. The Partners agree that-the Aircraft included in the Schedule A Assets are recovery property under Section 168 of the Code and that the recovery period of such Aircraft for which the adjusted basis for United States federal income tax purposes is zero on the Effective Date will be determined by reference to asset class 45.0 set forth in Revenue Procedure 87-56, 1987-2 C.B. 674 using the straight line method with daily proration in the initial month. "Dissolution Event" has the meaning set forth in Section 12.1 hereof. "Dissolution Event Date" has the meaning set forth in Section 12.7 hereof. "Distribution Date" has the meaning set forth in Section 4.1 hereof. "DRO Pledge Agreement" means that certain Pledge Agreement [$49,100,000 Note] made by Investor for the benefit of the Partnership dated as of the Effective Date. "Effective Date" means December 2, 1993. "Expenses" means any and all liabilities, obligations, losses, damages, penalties, claims (including, but not limited to negligence, strict or absolute liability, liability in tort and liabilities arising out of violation of laws or regulatory requirements of any kind), actions, suits, costs, expenses and disbursements (including reasonable legal fees and expenses). "Fair Market Value" means (i) the Appraised Value of any Schedule A Asset, or (ii) with respect to any other asset, the value which would be obtained in an arm's-length transfer of such asset between an informed and willing buyer under no compulsion to buy and an informed and willing seller under no compulsion to sell. "Federal Aviation Act" means the Federal Aviation Act of 1958, as amended. "Fee Agreement" means that certain Fee Agreement among the Partnership, Assetco, TIFC, PCI and Investor, dated as of the Effective Date. "Fiscal Quarter" means (i) the period commencing on the Effective Date and ending on December 31, 1993, and (ii) any subsequent three-month period commencing on each of January 1, April 1, July 1, and October 1 and ending on the earlier to occur of (A) the last date before the next such date, or (B) the date on which all Partnership Property is distributed pursuant to Section 12.2 hereof and the Certificate has been cancelled pursuant to the Act. "Fiscal Year" means (i) the period commencing on the Effective Date and ending on December 31, 1993, (ii) any subsequent period commencing on January 1 and ending on the earlier to occur of (A) the next December 31 or (B) the date on which all Partnership Property is distributed pursuant to Section 12.2 hereof and the Certificate has been cancelled in accordance with the Act. "GAAP" means United States generally accepted accounting principles as in effect from time to time as applied to the Partnership. "GECC" means General Electric Capital Corporation, a New York corporation, or any successor in interest. "GECC Demand Note" means that certain $15,340,500 Demand Promissory Note dated as of the Effective Date from GECC to Assetco. "GECC Indemnification Agreement" means that certain Guaranty and Indemnification Agreement [ECC] dated as of the Effective Date made by GECC in favor of Investor and PCI. "GECC Loans" has the meaning set forth in the definition of Permitted Investments in this Section 1.10. "General Partner" means any Person who (i) is referred to as such in the first paragraph of this Agreement or has become a General Partner pursuant to the terms of this Agreement, and (ii) has not, at any given time, ceased to be a General Partner pursuant to the terms of this Agreement. "General Partners" means all such Persons. "Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by the General Partner with the unanimous consent of the Partners, provided that the initial Gross Asset Values of the assets contributed to the Partnership pursuant to Sections 2.1 and 2.2 hereof shall be as set forth in such Sections; (ii) The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross Fair Market Values as of the following times: (A) the date on which an additional Interest in the Partnership is acquired by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Partnership to a Partner of more than a de minimis amount of Property in liquidation of its Interest within the meaning of Regulations Section 1.704-1(b) (2) (ii) (q); (C) the liquidation of the Partnership within the meaning of Regulations Section 1.7041(b) (2)(ii)( q); and (D) at such other times as the General Partner shall reasonably determine necessary in order to comply with Regulations Sections 1.704-1(b) and 1.704-2; (iii) The Gross Asset Value of any Partnership asset distributed to any Partner shall be adjusted to equal the gross Fair Market Value-of such asset on the date of distribution as determined by the distributee and the General Partner; provided that, if the distributee is the General Partner, the determination of the Fair Market Value of any distributed asset other than a Schedule A Asset or cash shall require the unanimous consent of the Partners, which consent shall not be unreasonably withheld; and (iv) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulation Section 1.704-1(b) (2)(iv) ( m ) and subparagraph (vi) of the definition of "Profits" and "Losses" and Section 3.3 (g) hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the Partners unanimously agree that an adjustment pursuant to subparagraph (ii) hereof is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (i), (ii), or (iv) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits, Losses, Schedule A Asset Gain and other items of gain, income, loss and deduction allocated pursuant to Section 3 hereof. "Individual Leasing Record" has the meaning set forth in Section 1 of the Master Leases. "Ineligible Person" means Investor, PCI, PEPCO or any Affiliate or any of them (other than GECC, TIFC, Assetco or a wholly owned Affiliate thereof), provided that for purposes of the foregoing sentence, in determining whether any person is an Affiliate, as defined by 1.10 hereof, the terms "control," "controlling," "controlled by" or "under common control with such person" shall include any Person which, indirectly or directly owns, controls or holds with power to vote, 5 percent or more of the outstanding voting securities of the persons specified by name above or of any Person.5 percent or more of whose outstanding voting securities are owned, controlled or held with power to vote, directly or indirectly, by the persons specified by name above. "Interest" means an ownership interest in the Partnership representing some or all of the Capital Contributions made by a Partner pursuant to this Agreement, including any and all benefits to which the holder of such an Interest may be entitled as provided in this Agreement (including, without limitation, any rights to payments and distributions pursuant to Sections 4, 10 and 12 hereof), together with all obligations of such Partner to comply with the terms and provisions of this Agreement. "Investor" means Potomac Aircraft Leasing Corporation, a Nevada corporation, or any successor in interest. "Investor Guaranteed Payment" means an amount equal to (i) the Applicable Rate, multiplied by (ii) the average daily balance of Investor's Unreturned Capital from time to time during the period to which the Investor Guaranteed Payment relates, commencing on the Effective Date and ending on October 31, 2000, determined on the basis of a 360-day year/30-day month for the period for which such Investor Guaranteed Payment is being determined, cumulative and compounded quarterly on each Distribution Date to the extent not paid in any given quarter on the Distribution Date pursuant to Section 4.3 hereof. No Investor Guaranteed Payment shall accrue after October 31, 2000, except for compounding relating to unpaid accrued Investor Guaranteed Payments. "Issuance Items" has the meaning set forth in. Section 3.3 (h) hereof. "Lease Documentation" means the Master Leases, any underlying subleases, and any other documentation associated with any Schedule A Asset. "Lessor's Lien" has the meaning set forth in Section 1 of the Master Lease. "Letter Agreement" means that certain letter agreement dated as of the Effective Date from GECC to the Partnership and Investor. "Lien" means any mortgage, lien, pledge, claim, charge, security interest, title defect or encumbrance of any kind, including any conditional sale or other title retention agreement, any lease in the nature thereof, or the filing of as debtor or agreement to give as debtor any financing statement. "Limited Partner" means any Person (i) who is referred to as such in the first paragraph of this Agreement or who has become a Limited Partner pursuant to the terms of this Agreement, and (ii) who has not ceased to be a Limited Partner. "Limited Partners" means all such Persons. "Losses" has the meaning set forth in the definition of "Profits and Losses." "Master Leases" means, collectively, that certain Amended and Restated Master Leasing Agreement dated as of the Effective Date among Wilmington Trust Company as Lessor and Owner Trustee, GECC as Lessee, and the Partnership as Owner Participant, and that certain Amended and Restated Master Leasing Agreement dated as of the Effective Date among Shawmut Bank Connecticut, National Association (formerly known as The Connecticut National Bank) as Lessee and Owner Trustee, GECC as Sublessee and the Partnership as Owner Participant, and all individual Leasing Records attached thereto. "Net.Cash Flow" means the gross cash proceeds of the Partnership (including Capital Contributions of money) less the portion thereof used to pay, or to establish in the reasonable determination of the General Partner (considering projected cash receipts), a reasonable reserve for (a) Partnership expenses (including without limitation Investor Guaranteed Payments and expenses described in Section 5.3 (n) hereof), (b) debt payments, (c) capital expenditures with respect to the Schedule A Assets or assets described in clause (vi) of Section 5.3(m) hereof, and (d) with unanimous consent of the Partners (which consent shall not be unreasonably withheld), contingencies, all as determined by the General Partner. "Net Cash Flow" shall not be reduced by depreciation, amortization, cost recovery deductions, or similar allowances, but shall be, without duplication, (i) decreased by distributions previously made pursuant to Section 4.1 hereof, (ii) decreased by the amount of any funds invested in Permitted Investments, up to a maximum amount equal to the aggregate cash Capital Contributions made by the Partners pursuant to Sections 2.1 and 2.2 hereof, (iii) decreased by damages or other indemnification payments to the Partnership that are required to be paid over by the Partnership to a Partner or an Affiliate thereof pursuant to Section 7.6 or 10.4 hereof, and (iv) increased by any reductions of reserves previously established pursuant to the first sentence of this definition. "Nonrecourse Deductions" has the meaning set forth in Section 1.704-2 (b) (1) of the Regulations. "Nonrecourse Liability" has the meaning set forth in Section 1.704-2 (b) (3) of the Regulations. "Optional Retirement Notice" has the meaning set forth in Section 10-8 (a) (i) or 10.8 (a) (ii) hereof, as the case may be. "Original Capital Contribution" means, with respect to each Partner, the Capital Contribution made by such Partner pursuant to Section 2.1 or Section 2.2 hereof or pursuant to the Original Partnership Agreement, as the case may be, reduced by the amount of any liabilities of such Partner assumed by the Partnership in connection with such Capital Contribution or which are secured by any property contributed by such Partner to the Partnership as a part of such Capital Contribution. In the event all or a portion of an Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Original Capital Contribution of the transferor to the extent it relates to the transferred Interest. "Original Partnership Agreement" has the meaning set forth in Section 1.1 hereof. "Owner Trustee" means Wilmington Trust Company or Shawmut Bank Connecticut National Association, as the case may be. "Parent" means (i) in the case of TIFC, GECC, (ii) in the case of Assetco, GECC, and (iii) in the case of Investor, PCI. " Partner Nonrecourse Debt" has the meaning set forth in Section 1.704-2(b)(4) of the Regulations. "Partner Nonrecourse Debt Minimum Gain" means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2 (i) (3) of the Regulations. "Partner Nonrecourse Deductions" has the meaning set forth in Sections 1.704-2 (i) (1) and 1.704-2 (i) (2) of the Regulations. "Partners" means the General Partner and all Limited Partners, where no distinction is required by the context in which the term is used herein. "Partner" means any one of the Partners. "Partnership" means the limited partnership continued pursuant to this Agreement and the limited partnership continuing the business of this Partnership in the event of dissolution as herein provided. "Partnership Minimum Gain" has the meaning set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations. "Payment Date" has the meaning set forth in Section 4.3 hereof. "PCI" means Potomac Capital Investment Corporation, a Delaware corporation, or any successor in interest. "PCI Demand Note" means that certain $49,100,000 Demand Promissory Note dated as of the Effective Date from PCI to Investor. "PCI Indemnification Agreement" means that certain Guaranty and Indemnification Agreement [PCI] dated as of the Effective Date made by PCI in favor of Assetco and TIFC. "PEPCO" means Potomac Electric Power Company, a District of Columbia and Virginia Corporation. "Percentage Interest" means, with respect to any Partner as of any date, the percentage set forth opposite such Partner's name in Section 2.1 or Section 2.2 hereof. In the event all or any portion of an Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to a corresponding portion of the Percentage Interest of the transferor. "Permitted Investments" means: (a) First, until Investor's unreturned Capital has been reduced to zero by Net Cash Flow distributions pursuant to Section 4-1 (a) hereof, one or more investments by the Partnership, in an aggregate amount not to exceed the aggregate cash Capital Contributions by the Partners pursuant to Sections 2.1 and 2.2 hereof, less amounts actually paid by the Partnership with respect to expenses described in Section 5.3(n) hereof, in one or more of the following: (i) U.S. government or U.S. government agency securities, or other corporate debt instruments that, in either case, are rated at least A- by Standard & Poor's Corporation and A3 by Moody's Investor Services Corporation and have a maturity of not later than October 31, 2000 (or for investments made after October 31, 2000, a maturity of not more than five years), or (ii) GECC Loans; (b) Second, after Investor's Unreturned Capital has been reduced to zero by Net Cash Flow distributions pursuant to Section 4.1(a) hereof, one or more investments by the Partnership, in an aggregate amount not to exceed (disregarding Permitted Investments made pursuant to subparagraph (a) of this definition) the sum of (A) $5.12 million and (B) any unpaid portion of the fee payable under the Fee Agreement, in one or more of the following: (i) U.S. government or U.S. government agency securities or other corporate debt instruments that, in either case, are rated at least A- by Standard & Poor's Corporation and A3 by Moody's Investor Services Corporation and have a maturity of not later than October 31, 2000 (or for investments made after October 31, 2000, a maturity of not more than five years), or (ii) GECC Loans; and (c) Finally, after the Partnership has made $5.12 million of Permitted Investments pursuant to subparagraph (b) of this definition, investments by the Partnership in one or more of the following: (i) U.S. government or U.S. government agency securities, or other corporate debt instruments that, in either case, are rated at least A- by Standard & Poor's Corporation and A3 by Moody's Investor Services Corporation and have a maturity of not later than October 31, 2000 (or for investments made after October 31, 2000, a maturity of not more than five years), (ii) GECC Loans, and (iii) with the consent of Investor, which consent shall not be unreasonably withheld (taking into account, among other things, the risk of loss attributable to the investment), in any other assets; provided, however, that the proceeds of any Permitted Investment acquired pursuant to clause (b) above shall be reinvested in a Permitted Investment described in clause (b) above. (d) Any loan to GECC, to an Affiliate of GECC that is fully guaranteed by GECC, or to General Electric Capital Services Corp. Inc. (each a "GECC Loan") (i) shall have a maturity of not later than October 31, 2000 (or for loans made after October 31, 2000, a maturity of not more than five years), (ii) except as unanimously agreed by the Partners, shall require interest-only payments at a rate equal to GECC1s borrowing rate for equivalent maturity securities at the time the loan is made, with principal being repaid at maturity, provided, however, that upon the election by Investor to withdraw from the Partnership pursuant to Section 10.8 (a) (ii) hereof or upon the winding up and liquidation of the Partnership upon the occurrence of a Dissolution Event pursuant to Section 12.2 hereof, all outstanding unpaid principal and accrued interest shall become immediately due and payable, (iii) shall include terms which do not vary in any material respects from the terms set forth in Schedule C of this Agreement, (iv) shall not allow an option for a borrower prepayment prior to maturity and (v) shall be made on such other terms and conditions as are reasonably acceptable to Investor. The Partners hereby agree that any loan to GECC made within ten days after the Effective Date and maturing on October 31, 2000 shall accrue interest over the term of the loan at 5.35% per annum (which the Partners acknowledge is GECC's borrowing rate for seven-year loans as of the Effective Date), shall not require interim interest payments, and shall require the payment of both accrued interest and principal on October 31, 2000. "Permitted Liens" means (i) the respective rights and interests of the Partners, the Partnership or the Owner Trustees as provided in the Transaction Documents, (ii) Liens for taxes or other fees, assessments, levies, withholdings or charges, including interest, penalties and additions to such claims imposed by any ' foreign, federal, state or local taxing authority ("Taxes") either not yet due or being contested in good faith by appropriate proceedings, so long as such proceedings do not involve any material danger of sale, forfeiture or loss of any part of the Property, the value thereof, title thereto or any interests therein and do not materially interfere with the use or disposition of any part of the Property and as to which adequate reserves shall have been provided for the payment of such Taxes, and (iii) materialman's, mechanic's, vendor's, workman's, repairman's or other like Liens arising out of and discharged in the ordinary course of business. "Permitted Transfer" has the meaning set forth in Section 10.2 hereof. "Person" means any individual, partnership, limited liability company, corporation, trust, or other entity. "Priority Return" means an amount equal to (i) a per annum percentage equal to the Applicable Rate, multiplied by (ii) the average daily balance of the Unreturned Capital of TIFC and Assetco from time to time during the period to which the Priority Return relates, commencing on the Effective Date and ending on October 31 , 2000, determined on the basis of a 360-day year/30-day month, for the period for which such Priority Return is being determined, cumulative and compounded quarterly to the extent not distributed in any given quarter. No Priority-Return shall accrue after October 31, 2000, except for compounding relating to unpaid accrued Priority Return. "Profits" and "Losses" means, for each Allocation Year, an amount equal to the Partnership's taxable income or loss for such Allocation Year, determined in accordance with Code Section 703 (a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703 (a) (1) shall be included in taxable income or loss), with the following adjustments: (i) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss; (ii) Any expenditures of the Partnership described in Code Section 705 (a) (2) (B) or treated as Code Section 705 (a) (2) (B) expenditures pursuant to Regulations Section 1.704-1(b) (2) (iv) (i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted from such taxable income or loss; (iii) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of "Gross Asset Value," the amount-of such adjustment, if positive, shall be taken into account as gain or, if negative, shall be taken into account as loss from the disposition of such asset for purposes of computing Profits, Losses or Schedule A Asset Gain; (iv) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Year, computed in accordance with the definition of Depreciation; (vi) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734 (b) or Code Section 743 (b) is required pursuant to Regulations Section 1-704-1(b) (2) (iv ) (m) (4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner's Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses; and (vii) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof shall not be taken into account in computing Profits or Losses. The amounts of the items of Partnership income, gain, loss or deduction available to be specially allocated pursuant to Sections 3.3 and 3.4 hereof shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above. "Property" means the Schedule A Assets and all other property acquired by the Partnership and any improvements thereto, and shall include both tangible and intangible property (including, without limitation, Permitted Investments). "Reconstitution Period" has the meaning set forth in Section 12.1 hereof. "Regulations" means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "Regulatory Allocations" has the meaning set forth in, Section 3.4 hereof. "Responsible Officer" has the meaning set forth in Section 5.4 (c) hereof. "Retirement Allocation Date has the meaning set forth in Section 10.8 (b) hereof. "Retirement Date" has the meaning set forth in. Sections 10.8 (a) (i) or 10.8 (a) (ii) hereof, as the case may be. "Schedule A Assets" means the assets held through the owner participant interests contributed to the Partnership by Assetco pursuant to Section 2.1 hereof and the Contribution Agreements and set forth on Schedule A attached hereto and incorporated by reference herein or the Aircraft comprising part of the trust estates, the beneficial interests in which were contributed to the Partnership by Assetco pursuant to such Contribution Agreements, as the context may require. "Schedule A Asset Cain" has the meaning set forth in Section 3.3 (j) hereof. "Tax Matters Partner" has the meaning set forth in Section 8.3 (a) hereof. " TIFC" means Transportation & Industrial Funding Corporation, a Delaware corporation, or any successor in interest. "Transaction Documents" means this Agreement, the Contribution Agreements, the Master Leases, the Lease Documentation, the Trust Agreements, the Letter Agreement, the Assignment and Assumption Agreements, the Fee Agreement, the DRO Pledge Agreement, the GECC Indemnification Agreement, the PCI Demand Note, and the PCI Indemnification Agreement. "Transfer" means, as a noun, any voluntary or involuntary transfer, sale, or other disposition and, as a verb, voluntarily or involuntarily to transfer, sell, or otherwise dispose of. "Trust Agreements" has the meaning set forth in Section 1 of the Master Leases. "Uncured Default" has the meaning set forth in Section 10.8 (a) (ii) hereof. "Unreturned Capital" means, for any Partner as of any date, the excess, if any, of (i) the sum of (A) such Partner's original Capital Contribution, (B) any Additional Capital Contributions made by such Partner pursuant to Section 2.3 hereof, and (C) the amount of any liabilities of the Partnership which, in connection with distributions pursuant to Sections 10.8 (b) and 12.2 hereof, are assumed by such Partner or are secured by any Property distributed to such Partner, over (ii) the sum of (A) the cumulative amount of money and the Gross Asset Value of any Property (other than money) distributed to such Partner pursuant to Sections 4.1, 10.8 and 12.2 hereof as of such date and (B) any amounts actually received by such Partner as damages or indemnification under Section 10.4 hereof with respect to a Capital Contribution made pursuant to Section 12.4 hereof; provided that, any distribution to TIFC or Assetco pursuant to Section 4.1(b) hereof shall not reduce the Unreturned Capital of such Partner except to the extent that the sum of such distributions and all prior distributions to such Partner pursuant to Section 4.1(b) hereof exceeds such Partner's cumulative Priority Return. "Voluntary Bankruptcy" has the meaning set forth in the definition of "Bankruptcy. "Wholly Owned Affiliate" of any Person means an Affiliate of such Person (i) 100% of the voting stock (other than directors, qualifying shares) or beneficial ownership of which is owned directly by such Person, or by any Person who, directly or indirectly, owns 100% of the voting stock (other than directors' qualifying shares) or beneficial ownership of such Person, (ii) an Affiliate of such Person who, directly or indirectly, owns 100% of the voting stock (other than directors, qualifying shares) or beneficial ownership of such Person, and (iii) any Wholly Owned Affiliate of any Affiliate described in clauses (i) or (ii) of this definition. 1.11 Powers. The Partnership shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or in furtherance of the purposes of the Partnership set forth in Section 1.3 hereof and for the protection and benefit of the Partnership and shall have, without limitation, any and all powers that may be exercised on behalf of the Partnership by the General Partner pursuant to Section 5 hereof. 1.12 Responsibilities of Partnership. Any provisions of this Agreement that provide that the Partnership shall perform or undertake an obligation is an agreement among the Partners to cause the Partnership to perform or undertake such obligation, and to the extent that any such obligation comes within the General Partner's responsibility to manage and control the business of the Partnership (but subject to any restrictions on the General Partner's authority hereunder), the General Partner shall cause the Partnership to perform or undertake such obligation.
SECTION 2. PARTNER'S CAPITAL CONTRIBUTIONS
2.1 General Partner. The name, address, Original Capital Contribution and Percentage Interest of the General Partner on the Effective Date is as follows:
Name and Address							Capital Contribution		Percentage Interest
TIFD II INC. 3720 Howard Hughes Parkway Suite 170 Las Vegas, Nevada 89109 Attn: Bryan Glaus							The assets described in the Contribution Agreements with an agreed initial Gross Asset Value of $136,870,902 allocated among such assets as set forth in Schedule A and cash in the amount of $100		89.22%
2.2 Limited Partners. The name, address, Original Capital Contribution, and Percentage Interest of each of the Limited Partners on the Effective Date are as follows:
Name and Address							Capital Contribution		Percentage Interest
Transportation & Industrial Funding Corporation 1600 Summer Street Stamford, Connecticut 06927 Attn: Mgr. of Operations - Commercial Aviation							$1,534,050 in the form of a demand note payable on or before the close of business on December 1, 1993 and cash in the am ount of $100		1.00%
Potomac Aircraft Leasing Corporation 241 Ridge Street Fourth Floor Reno, Nevada 89501							$15,000,000 in the form of a demand note payable on or before the close of business on December 1, 1993		9.78%
2.3 Additional Capital Contributions. (a) In General. Except as otherwise required or permitted in Sections 2.3, 4.4, 10.8 (b) (ii) (1), 12.3 (a) (ii), 12.3 (a) (iii) or 12.4 hereof, no Partners may make an Additional Capita.1 Contribution except with the written consent of all other Partners. (b) TIFC. TIFC shall, from time to time, make additional Capital Contributions in cash if, and to the extent, necessary to maintain for itself a proportionate share of capital equal to not less than. one percent (1%). (c) Investor. Investor may elect to make Additional Capital Contributions in cash in order to decrease its Adjusted Capital Account Deficit, if and to the extent that Investor otherwise would be precluded from receiving a distribution of Net Cash Flow pursuant to Section 4.1(a) hereof as a result of such Adjusted Capital Account Deficit. 2.4 Other Matters. (a) Except as otherwise provided in Section 4.1, 10.8 or 12.2 hereof or pursuant to the Fee Agreement, no Partner shall demand or receive a return of its Capital Contributions or withdraw from the Partnership without the consent of all Partners. Under circumstances requiring a return of any Capital Contributions, no Partner shall have the right to receive property other than cash except as may be specifically provided herein. (b) No Partner shall receive any interest or draw with respect to its Capital Contributions or its Capital Account or, for services rendered on behalf of the Partnership or otherwise in its capacity as a Partner, except as otherwise provided in this Agreement. (c) The Limited Partners shall not be liable for the debts, liabilities, contracts or any other obligations of the Partnership. Except as otherwise provided by this Agreement, or by mandatory provisions of applicable state law and except with respect to the obligation of a Limited Partner to return to the Partnership a distribution made to such Limited Partner in violation of the Act at a time that such Limited Partner knew the distribution would violate the Act, such Limited Partner shall be liable only to make its Capital Contributions and shall not be required to lend any funds to the Partnership or, after its Capital Contributions have been made, to make any additional contributions to the Partnership. (d) No General Partner shall have any personal liability for the repayment of any Capital Contributions of any Limited Partner. (e) Notwithstanding anything to the contrary herein, amounts paid or received by a Partner or an Affiliate of a Partner as damages or indemnification with respect to any breach or other violation of any representation, warranty, covenant or other agreement made pursuant to Section 7.6 or 10.4 hereof (such amounts being referred to in this Section 2.4 (e) as a "Damages Payment") shall be treated for United States federal income tax purposes as a contribution by such Partner to or a distribution to such Partner from the Partnership, as the case may be; provided, however, that a Damages Payment (i) shall not be treated as a Capital Contribution, (ii) shall not cause an adjustment to or otherwise affect Capital Accounts or Unreturned Capital of any Partner, (iii) shall not be taken into account in computing Profits, Losses, or Schedule A Asset Gain and (iv) in the case of a Damages Payment to a Partner or an Affiliate of a Partner, shall not be treated as a distribution of Net Cash Flow; provided further, however, that ( w ) a Damages Payment received by a Partner pursuant to Section 10.4 hereof, to the extent such Damages Payment offsets a Capital Contribution required to be made by such Partner pursuant to Section 12.4 hereof, shall be treated as a distribution and shall reduce the Capital Account and Unreturned Capital of such Partner, (x) to the extent a Damages Payment required to be paid by a Partner or an Affiliate of a Partner is with respect to a payment by the Partnership of an item that is deductible for United States federal income tax purposes or results in an increase in the basis of any Property that is depreciable, amortizable, or subject to cost recovery, any such deduction or cost recovery allowance shall not be taken into account in computing Profits, Losses, Schedule A Asset Gain, or other items of loss or deduction allocable pursuant to Section 3 hereof, but shall be specially allocated to such Partner for United States federal income tax purposes, (y) to the extent any Damages Payment required to be paid to a Partner or an Affiliate of a Partner is with respect to the receipt by the Partnership of an item that constitutes income for United States federal income tax purposes, such income shall not be taken into account in computing Profits, Losses, Schedule A Asset Gain, or other items of income or gain allo6able pursuant to Section 3 of this Agreement, but shall be specially allocated to such Partner for income tax purposes, and (z) any special allocations pursuant to clauses (x) or (y) of this Section 2.4 (e) shall not affect the Capital Account or Unreturned Capital of any Partner.
SECTION 3. ALLOCATIONS
3.1.Profits. After giving effect to the special allocations set forth in Sections 3.3 and 3.4 hereof, Profits for any Allocation Year shall be allocated in the following order and priority: (a) First, for each Allocation Year ending on or before October 31, 2000, 98% to Investor, 1% to Assetco, and 1% to TIFC, in an amount equal to the excess, if any, of (i) the cumulative Losses allocated pursuant to Section 3.2 (a) (iv) hereof for all prior Allocation Years, over (ii) the sum of (A) the cumulative Schedule A Asset Gain allocated pursuant to Section 3.3 (j) (i) hereof for the current and all prior Allocation Years, and (B) the cumulative Profits allocated pursuant to this Section 3.1 (a) for all prior Allocation Years; (b) Second, to the General Partner in an amount equal to the excess, if any, of (i) the cumulative Losses allocated pursuant to Section 3.2 (a) (vi) hereof for all prior Allocation Years, over (ii) the sum of (A) the cumulative Schedule A Asset Gain allocated pursuant to Section 3.3 (j) (ii) hereof for the current and all prior Allocation Years, and (B) the cumulative Profits allocated pursuant to this Section 3.1(b) for all prior Allocation Years; (c) Third, 1% to TIFC and 99% to Assetco to the extent of the excess, if any, of (i) the cumulative Losses allocated to such Persons pursuant to Section 3.2 (a) (v) hereof for all prior Allocation Years, over (ii) the sum of (A) the cumulative Schedule A Asset Gain allocated to such Persons pursuant to Section 3.3 (j) (iii) hereof for the current and all prior Allocation Years, and (B) the cumulative Profits allocated to such Persons pursuant to this Section 3.1(c) for all prior Allocation Years; (d) Fourth, to TIFC and Assetco in proportion to and to the extent of the excess, if any, of (i) their respective cumulative Priority Returns from the date hereof to the last day of such Allocation Year, over (ii) the respective cumulative Profits allocated to such Person pursuant to this Section 3.1(d) for all prior Allocation Years; and (e) The balance, if any, 1% to TIFC, 1% to Investor and 98% to Assetco. 3.2. Losses. After giving effect to the special allocations set forth in Sections 3.3 and 3.4 hereof, Losses for any Allocation Year shall be allocated as set forth in Section 3.2(a) hereof, subject to the limitation in Section 3.2(b) hereof. (a) Losses for any Allocation Year shall be allocated in the following order and priority: (1) First, 1% to TIFC, 1% to Investor and 98% to Assetco, to the extent of the excess, if any, of (A) the sum of (1) the cumulative Profits allocated to each such Person pursuant to Section 3.1(e) hereof for all prior Allocation Years and (2) the cumulative Schedule A Asset Gain allocated to each such Person pursuant to Section 3.3 (j) (v) for the current and all prior Allocation Years, over (B) the cumulative Losses allocated to each such Person pursuant to this Section 3.2(a)(i) for all prior Allocation Years; (ii) Second, to TIFC and Assetco, in proportion to and to the extent of the excess, if any, of (A) the cumulative Profits allocated to each such Person pursuant to Section 3.1 (d) hereof for all prior Allocation Years over (B) the cumulative Losses allocated to each such Person pursuant to this Section 3.2 (a) (ii) for all prior Allocation years; (iii) Third, 1% to TIFC, 80% to Investor and 19% to Assetco, to the extent of the excess, if any, of (A) the cumulative Schedule A Asset Gain allocated to each such Person pursuant to Section 3.3 (j) (iv) hereof for the current and all prior Allocation Years, over (B) the cumulative Losses allocated to each such Person pursuant to this Section 3.2 (a) (iii) for all prior Allocation Years; (iv) Fourth, for each Allocation Year ending on or prior to October 31, 2000, 98% to Investor, 1% to Assetco and 1% to TIFC until the Capital Account of Investor is reduced to a deficit balance of $49,100,000 (after taking into account any Schedule A Asset Gain allocated to Investor for such Allocation Year pursuant to Section 3.3 (j) hereof); (v) Fifth, 1% to TIFC and 99% to Assetco until the Capital Account of TIFC has been reduced to zero (after taking into account any Schedule A Asset Gain allocated to such Persons for such Allocation Year pursuant to Section 3.3 (j) hereof); and (vi) The balance, if any, to the General Partner. (b) Losses allocated pursuant to Section 3.2 (a) hereof shall not exceed the maximum amount of Losses that can be so allocated without causing any Limited Partner to have an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the Limited Partners would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 3.2 (a) hereof, the limitation set forth in this Section 3.2 (b) shall be applied on a Limited Partner by Limited Partner basis and the Losses not allocable to any Limited Partner as a result of such limitation shall be allocated to the other Limited Partners in accordance with the positive balances in such Limited Partners' respective Capital Accounts so as to allocate the maximum permissible Losses to each Limited Partner under Section 1.704.1(b) (2) (ii) ( d ) of the Regulations. All Losses in excess of the Losses allocable to the Limited Partners in accordance with the limitations set forth in this Section 3.2 (b) shall be allocated to the General Partner. 3.3 Special Allocations. The following special allocations shall be made in the following order: (a) Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2 (f) of the Regulations, notwithstanding any other provision of this Section 3, if there is a net decrease in Partnership Minimum Gain during any Allocation Year, each Partner shall be specially allocated items of Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain, determined in accordance with Regulations Section 1.704-2 (g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2 (f) (6) and 1.704-2(j) (2) of the Regulations. This Section 3.3 (a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2 (f) of the Regulations and shall be interpreted consistently therewith. (b) Partner Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2 (i) (4) of the Regulations, notwithstanding any other provision of this Section 3, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Allocation Year, each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Section 1.704-2 (i) (5) of the Regulations, shall be specially allocated items of Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2 (i) (4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2 (i) (4) and 1.704-2 (j) (2) of the Regulations. This Section 3.3 (b) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2 (i) (4) of the Regulations and shall be interpreted consistently therewith. (c) Qualified Income Offset. In the event any Limited Partner unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1(b) (2) (ii)(d) (4), 1.704-1(b) (2) (ii) (d)(5) or 1.704-1(b) (2) (ii) (d) (6) of the Regulations, items of Partnership income and gain shall be specially allocated to each such Limited Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Limited Partner as quickly as possible, provided that an allocation pursuant to this Section 3.3 (c) shall be made only if and to the extent that such Limited Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 3 have been tentatively made as if this S6ction 3.3 (c) were not in the Agreement. (d) Gross Income Allocation. In the event any Limited Partner has a deficit Capital Account at the end of.any Allocation Year which is in excess of the sum of (i) the amount such Limited Partner is obligated to restore pursuant to any provision of this Agreement, and (ii) the amount such Limited Partner is deemed to be obligated to restore pursuant to the penultimate sentences of Sections 1.704-2 (g) (1) and 1.704-2 (i) (5) of the Regulations, each such Limited Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 3.3 (d) shall be made only if and to the extent that such Limited Partner would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Section 3 have been made as if Section 3.3 (c) hereof and this Section 3.3 (d) were not in the Agreement. (e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Year shall be specially allocated in accordance with the Partners' Interests pursuant to Regulations section 1.704-2 (b) (1). (f) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for any Allocation Year shall be specially allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Section 1.704-2 (i) (1) of the Regulations. (g) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1 (b) (2) (iv)(m) ( 4 ) or 1.704-1(b) (2) (iv)(m) (4) to be taken into account in determining Capital Accounts as the result of a distribution to a Partner in complete liquidation of its Interest, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Partners in accordance with their interests in the Partnership in the event Regulations Section 1.704-1 (b) (2) (iv) ( m ) ( 2 ) applies, or to the Partner to whom such distribution was made in the event Regulations Section 1.704-1(b) (2) (iv) (m) ( 4 ) applies. (h) Allocations Relating to Taxable Issuance of Partnership Interests. Any income, gain, loss or deduction realized as a direct or indirect result of the issuance of an Interest by the Partnership to a Partner (the "Issuance Items") shall be allocated among the Partners so that, to the extent possible, the net amount of such Issuance Items, together with all other allocations under this Agreement to each Partner, shall be equal to the net amount that would have been allocated to each such Partner if the Issuance Items had not been realized. (i) [Intentionally omitted) (j) Schedule A Asset Gain Allocation. In the event that, in any Allocation Year, the Partnership realizes, or is deemed to realize, gain (determined by reference to Gross Asset Value immediately prior to the event triggering such gain) from, the sale or disposition, or adjustment to the Gross Asset value, of any Schedule A Asset ("Schedule A Asset Gain"), such gain shall be specially allocated as follows: (i) First, 98% to Investor, 1% to Assetco and 1% to TIFC, in an amount equal to the excess, if any, of (i) the cumulative Losses allocated pursuant to Section 3.2 (a) (iv) hereof for all prior Allocation Years, over (ii) the sum of (A) the cumulative Profits allocated pursuant to Section 3.1 (a) hereof for all prior Allocation Years, plus (B) the cumulative Schedule A Asset Gain allocated pursuant to t his Section 3.3 (j) (i) for all prior Allocation Years; (ii) Second, to the General Partner in an amount equal to the excess, if any, of (i) the cumulative Losses allocated pursuant to Section 3.2 (a) (vi) hereof for all prior Allocation Years, over (ii) the sum of (A) the cumulative Schedule A Asset Gain allocated pursuant to this Section 3. 3(j) (ii) for all prior Allocation Years, and (B) the cumulative Profits allocated pursuant to Section 3.1(b) hereof for all prior Allocation Years; (iii) Third, 1% to TIFC and 99% to Assetco to the extent of the excess, if any, of (i) the cumulative Losses allocated to such Persons, pursuant to Section 3.2(a) (v) hereof for all prior Allocation Years, over (ii) the sum of (A) the cumulative Schedule A Asset Gain allocated to such Persons pursuant to this Section 3.3 (j) (iii) for all prior Allocation Years, and (B) the cumulative Profits allocated t6- such Persons pursuant to Section 3.1(c) for all prior Allocation Years; (iv) Fourth, 1% to TIFC, 80% to Investor and 19% to Assetco until the cumulative Schedule A Asset Gain allocated pursuant to this Section 3.3 (j) (iv) for the current and all prior Allocation Years equals $6,400,000; and (v) The balance, if any, 1% to TIFC, 1% to Investor and 98% to Assetco. (k) If a Partner pays or is required to pay a cost or expense of the Partnership for which it is not entitled to reimbursement or otherwise compensated hereunder, and if such cost or expense nevertheless is required to be treated as an item of Partnership cost or expense, such item of cost or expense shall be specially allocated to such Partner. 3.4 Curative Allocations. (a) The allocations set forth in Sections 3.2 (b), 3.3 (a), 3.3 (b), 3.3 (c), 3.3 (d), 3.3 (e), 3.3 (f), and 3.3 (g) hereof (the "Regulatory Allocations") are intended to comply with certain requirements of the Regulations. It is the intent of the Partners that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Partnership income, gain, loss or deduction pursuant to this Section 3.4 (a). Therefore, notwithstanding any other provision of this Section 3 (other than the Regulatory Allocations and the following sentence), the General Partner shall make such offsetting special allocations of Partnership income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Partner's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Partner would have had if the Regulatory Allocations were not part of the Agreement and - all Partnership items were allocated pursuant to Sections 3.1, 3.2 (a), 3.3 (h), 3.3 (j) and 3.5 hereof. Notwithstanding the previous sentence, the General Partner shall not make special allocations of income or gain under this Section 3.4 (a) to offset Regulatory Allocations previously made under Sections 3.3 (e) and 3.3 (f) hereof. (b) In the event that the Partnership's income, gain, loss, deductions or capital are adjusted by any taking authority by reason of any common ownership or control of, or any agreement, contract, arrangement or transaction between, two or more Partners (or related Persons) or one or more Partners (or related Persons) and the Partnership (or related Persons), including but not limited to adjustments pursuant to Code section 482 or any similar provision under state, local or foreign law, and such adjustment results in a change in the Partnership's items of income, gain, loss or deduction, such items of income, gain, loss or deduction shall be allocated in a manner such that the economic effect of the adjustment to the Partnership as reflected in the Capital Accounts of the Partners shall be the same as if the adjustment had not been made. In general, in the event of any such adjustment, allocations of income, gain, loss or deduction and the treatment of payments between the Partnership and Partners within the control group shall be made in an appropriate manner by the General Partner, with the consent of Investor (which consent shall not be withheld unreasonably), so as to avoid any consequences from such adjustment to Partners who are not members of the control group. 3.5 Other Allocation Rules. (a) Profits, Losses and any other items of income, gain, loss or deduction shall be allocated to the Partners pursuant to this Section 3 as of the last day of each Allocation Year, provided that Profits, Losses and such other items shall also be allocated at such times as are required by Sections 10.8 or 12 hereof and at such other times as the Gross Asset Values of Partnership Property are adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.10 hereof. (b) For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the General Partner (except to the extent otherwise provided in Section 10.7 hereof) using any permissible method under Code Section 706 and the Regulations thereunder. (c) The Partners are aware of the income tax consequences of the allocations made by this Section 3 and hereby agree to be bound by the provisions of this Section 3 in reporting their shares of Partnership income and loss for income tax purposes, except as otherwise required by law. (d) "Excess nonrecourse liabilities" of the Partnership within the meaning of section 1.752-3 (a) (3) of the Regulations shall be allocated among the Partners in accordance with the manner in which it is reasonably expected that the deductions attributable to those nonrecourse liabilities will be allocated. (e) To the extent permitted by Section 1.704-2 (h) (3) of the Regulations, the General Partner shall endeavor to treat distributions of Net Cash Flow as having been made from the proceeds of a Nonrecourse Liability or a Partner Nonrecourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Limited Partner. 3.6. Tax Allocations: Code Section 704 (c). (a) In accordance with Code Section 704 (c) and the Regulations thereunder in effect on the date of the contribution of any assets to which Code Section 704 (c) relates, income, gain, loss, and deduction with respect to any property contributed to the capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of "Gross Asset Value" in Section 1.10 hereof). (b) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.10 hereof, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704 (c) and the Regulations thereunder in effect on the date of such adjustment. (c) Any elections or other decisions relating to such allocations shall be made by the General Partner in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 3.6 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement. (d) Except as otherwise provided in this Agreement, all items of Partnership income, gain, loss, deduction and any other allocations not otherwise provided for shall be divided among the Partners in the same proportions as they share Profit and Losses, as the case may be, for the Allocation Year.
SECTION 4. DISTRIBUTIONS AND GUARANTEED PAYMENTS
4.1 Distributions of Net Cash Flow. Except as otherwise provided in Sections 10.8 and 12.2 hereof, Net Cash Flow, if any, existing on last day of each Fiscal Year, and cash contributed pursuant to Section 12.4 hereof, if any, existing on the date such cash is so contributed, shall be distributed in the following order and priority and at the following times: (a) First, with respect to Net Cash Flow, not later than the fifth Business Day after the first day of such Fiscal Year (a "Distribution Date") and, with respect to any cash contributed pursuant to Section 12.4 hereof, not later than the fifth Business Day after the date any cash is so contributed, 100% to Investor in an amount equal to Investor's Unreturned Capital; provided, however, that no distribution shall be made pursuant to this Section 4.1 (a) which would cause Investor's Capital Account to have an Adjusted Capital Account Deficit; (b) Second, to TIFC and Assetco, at such times and in such amounts as may be determined by the General Partner, until the cumulative distributions to such Persons under this Section 4.1(b) equal such Person's respective Unreturned Capital and the Priority Return accrued thereon; provided, however, that distributions in excess of $13,550,000 made on or prior to October 31, 2000 pursuant to this Section 4.1 (b) shall require the consent of the Investor; and (c) The balance, if any, to Assetco, Investor and TIFC in proportion to their respective Unrecovered Capital, at such times as determined by the General Partner in its sole discretion; provided, however, that distributions made on or prior to October 31, 2000 pursuant to this Section 4.1 (c) shall require the consent of the Investor; provided, however, that in no event shall distributions be made to the General Partner if and to the extent that the General Partner's Capital Account balance immediately following the distribution is less than the lesser of (x) $500,000 or (y) one percent of the aggregate positive Capital Account balances of all Partners who have a positive Capital Account balance immediately following such distribution. 4.2 Amounts Withheld. All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any payment, distribution or allocation to the Partnership or the Partners shall be treated as amounts distributed to the Partners pursuant to this Section 4 for all purposes under this Agreement. The General Partner is authorized to withhold from payments and distributions, or with respect to allocations, to the Partners and to pay over to any federal, state, local or foreign government any amounts required to be so withheld pursuant to the Code or any provisions of any other federal, state, local or foreign law, and shall allocate any such amounts to the Partners with respect to which such amount was withheld. 4.3 Investor Guaranteed Payments. As compensation for the use by the Partnership of Investor's Capital Contributions, the Partnership shall pay to Investor on each Distribution Date, the Retirement Date, and the date any payments are made pursuant to Section 12.2 hereof (any of such dates being a "Payment Date") cash in an amount equal to the excess, if any, of (i) the cumulative Investor Guaranteed Payment from the date hereof to such Payment Date, over (ii) any amounts previously paid to Investor pursuant to this Section 4.3 in respect of the Investor Guaranteed Payment. Amounts payable under this Section 4.3 as Investor Guaranteed Payments shall be treated as guaranteed payments within the meaning of Code Section 707 (c), shall be considered an expense of the Partnership for income tax and financial reporting purposes and for purposes of computing Profits and Losses and Net Cash Flow of the Partnership and shall not be considered a distribution to Investor for any purpose of this Agreement, including, without limitation, in maintaining Investor's Capital Account or determining Net Cash Flow. 4.4 Distributions and Payments to Limited Partners. It is the intent of the parties hereto that no distribution or payment to any Limited Partner (including distributions under Sections 4.1, 10.8 and 12.2 hereof and payments pursuant to Section 4.3 hereof) shall be deemed a return of money or other property in violation of the Act. The payment or distribution of any such money or property to a Limited Partner shall be deemed to be a compromise within the meaning of Section 17-502 (b) of the Act, and the Limited Partner receiving any such money or property shall not be required to return any such money or property to the Partnership, any creditor of, the Partnership or any other Person. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Limited Partner is obligated to return such money or property, such obligation shall be the obligation of such Limited Partner and not of the General Partner. Any amounts required to be paid under such obligation shall be treated as an Additional Capital Contribution pursuant to Section 2.3 hereof. Nothing in this Section 4.4 shall be interpreted as increasing or decreasing the obligation of Investor to restore the deficit balance in its Capital Account under Section 10.8 (b) (ii) (1), 12.3 (a) (iii) or 12.4 hereof.
SECTION 5. MANAGEMENT
5.1 Authority of the General Partner. The General Partner shall take all actions which may be necessary or appropriate (i) for the continuation of the Partnership's valid existence as a limited partnership under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Limited Partners or to enable the Partnership to conduct the business in which it is engaged and (ii) for the accomplishment of the Partnership's purposes, including the acquisition, development, maintenance, preservation, and operation of Property in accordance with the provisions of,this Agreement and applicable laws and regulations. Subject to the limitations and restrictions set forth in this Agreement (including, without limitation, those set forth in this Section 5)-, the General Partner shall manage and control the business of the Partnership by conducting, in the name of, and on behalf of, the Partnership, the day-to-day business and affairs of the Partnership, and in so doing may exercise in the name of, and on behalf of, the Partnership the following specific rights and powers without any further consent of the Partners being required: (a) Acquire by purchase, lease, or otherwise any personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Partnership; (b) Operate, maintain, improve, own, grant options with respect to, sell, convey, assign and lease any personal -property necessary, appropriate, convenient or incidental to the accomplishment of the purposes of the Partnership; (c) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the formation, management, maintenance, and operation of Property, or in connection with managing the affairs of the Partnership; (d) [Intentionally omitted]; (e) Execute, in furtherance of any or all of the purposes of the Partnership, any deed, lease, bill of sale, contrtact, or other instrument purporting to convey or encumber (with respect to a lease) any or all of the Property; (f) Execute amendments to this Agreement and the Certificate in accordance with the terms of this Agreement, both as the General Partner and, if required, as attorney-in-fact for the Partners pursuant to the power of attorney granted by the Partners to the General Partner pursuant to Section 13 hereof. (g) Care for and distribute funds to the Partners by way of cash, income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Partnership or this Agreement; (h) Arrange for or contract on behalf of the Partnership for the employment and services of employees or independent contractors (including, but not limited to, lawyers, accountants and appraisers), and delegate (subject to the control and supervision of the General Partner) to such Persons the duty to manage or supervise any of the assets or operations of the Partnership which may be necessary, convenient or incidental to the accomplishment of the purposes of the Partnership; (i) Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Property and General Partner liability) necessary, appropriate for, incidental to, or in connection with, the accomplishment of the purposes of the Partnership, as may be lawfully carried on or performed by a partnership under the laws of each jurisdiction in which the Partnership was formed or is then qualified; (j) Invest Partnership funds in Permitted Investments; (k) Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Partnership or the Partners in connection with activities arising out of, connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith; (l) Acquire, own, use and invest the Schedule A Assets, Permitted Investments, cash, temporary investments described in Section 5.7 hereof, and assets described in and acquired pursuant to a Master Lease (including without limitations Section 7, 8 or 13 of a Master Lease); (m) Execute and deliver on behalf of the Partnership, and cause the Partnership to perform its duties and obligations and enforce its rights under, those Transaction Documents to which the Partnership is a party; (n) Take, or refrain from taking, all actions not expressly prescribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Partnership; and (o) Sell or lease (or cause any Owner Trustee to sell or lease) any Schedule A Asset pursuant to the terms of the applicable Master Lease. 5.2 Right to Rely on the General Partner. (a) Any Person dealing with the Partnership may rely (without duty of further inquiry) upon a certificate signed by the General Partner as to: (i) The identity of any General Partner or any Limited Partner; (ii) The existence or nonexistence of any fact or facts which constitute a condition precedent to acts by the General Partner or which are in any other manner germane to the affairs of the Partnership; (iii) The Persons who are authorized to execute and deliver any instrument or document of the Partnership; or (iv) Any act or failure to act by the Partnership or any other matter whatsoever involving the Partnership or any Partner. (b) The signature of the General Partner shall be necessary and sufficient to convey title to any property owned by the Partnership or to execute any promissory notes, trust deeds, mortgages, or other instruments of hypothecation, and all of the Partners agree that a copy of this Agreement may be shown to the appropriate parties in order to confirm the same, and further agree that the signature of the General Partner shall be sufficient to execute any "statement of partnership" or other documents necessary to effectuate this or any other provision of this Agreement. All of the Partners do hereby appoint the General Partner as their attorney-in-fact for the execution of any or all of the documents described in this Section 5.2 (b). 5.3 Restrictions on Authority of the General Partner. The General Partner shall not have the authority to, and covenants and agrees that it shall not, do any of the following acts without the unanimous consent of the Partners: (a) Cause or permit the Partnership to engage in any activity that is not consistent with the purposes of the Partnership as set forth in Section 1.3 hereof; (b) Knowingly do any act in contravention of this Agreement; (c) Knowingly do any act which would make it impossible to carry on the ordinary business of the Partnership, except as otherwise provided in this Agreement; (d) Confess a judgment against the Partnership in an amount in excess of $100,000 or settle, compromise or otherwise dismiss lawsuits or other judicial or administrative proceedings against the Partnership that will result in a liability to the Partnership or to the Investor in excess of $100,000; (e) Possess Property, or assign rights in specific Property, for other than a Partnership purpose; (f) Knowingly perform any act that would subject any Limited Partner to liability as a general partner in any jurisdiction; (g)Cause the Partnership to take voluntarily any action that would cause a Bankruptcy of the Partnership; (h) Cause a significant change in the nature of the Partnership's business or amend, modify or waive any material rights of the Partnership with respect to any Permitted investment if such amendment, modification or waiver would result in a material adverse effect on the Partnership's interest in such Permitted Investment; (i) Cause the Partnership to admit any additional Partners or issue any additional Partnership Interests other than pursuant to Section 10.6 hereof or to effect any redemption or retirement of any part of an Interest (other than a retirement pursuant to Section 10.8 (b) or 12.2 hereof); (j) Cause the Partnership to incur, assume, or obligate itself by contract for any Debt, except that the Partnership may incur, assume or obligate itself by contract for (i) liabilities arising by operation of law, (ii) liabilities described in Section 5.6 (b) hereof, (iii) current trade liabilities incurred in the ordinary course of the Partnership's trade or business and payable in accordance with customary practices, (iv) liabilities described in Section 5.3 (n) hereof, and (v) liabilities assumed by the Partnership pursuant to the Transaction Documents; (k) [Intentionally omitted]; (1) (i) Except as provided in Section 12.2 hereof, cause the Partnership to sell any Schedule A Asset for an amount less than the then applicable projected value of such Schedule A Asset calculated pursuant to Schedule A-1, provided that, if the Appraised Value of such Schedule A Asset is determined under the Appraisal Process, the General Partner may cause the Partnership to sell such Schedule A Asset for an amount at least equal to such Appraised Value or (ii) cause the Partnership to sell any Property, other than a Schedule A-Asset; (m) Cause the Partnership to acquire any assets other than the following: (i) Schedule A Assets, Capital Contributions, Additional Capital Contributions, and any assets described in a Master Lease (including without limitations Section 7, 8 or 13 of a Master Lease), (ii) Permitted Investments, (iii) temporary investments permitted by Section 5.7 hereof, (iv) cash proceeds and ancillary rights arising from the transactions contemplated hereby, (v) assets permitted by Section 5.1 (a) hereof, and (vi) any of the following items of personal property which, at the time acquired by the Partnership, are subject to leases that are substantially similar to any of the leases on the assets described on Schedule A; (x) Rail cars, airplanes, airplane engines, and similar transportation equipment; and (y) Vehicles, including automobiles, forklift trucks, cranes and similar heavy equipment; (n) Cause the Partnership to contract and pay for investment banking, legal and other services and expenses in conjunction with the formation of the Partnership and the execution of this Agreement and related documents other than (i) the fee paid to BT Securities Corporation up to a maximum of $1,575,000, (ii) fees up to $1,000,000 in the aggregate paid for legal services, and (iii) fees payable pursuant to the Fee Agreement; (o) Cause or give any amendment, modification or waiver of consent of the Partnership's rights or obligations under any of the Transaction Documents (other than any sublease to which any Aircraft is subject and any other portions of the Lease Documentation associated with such sublease); (p) Cause the Partnership to change its Fiscal Year; (q) Cause the admission of any Person to the Partnership as a Partner other than pursuant to Section 10 hereof or to effect any redemption or retirement of any part of any Interest (other than a redemption or. retirement pursuant to Section 10.8 or 12.2 hereof or the Fee Agreement); (r) Cause the Partnership to merge or consolidate with or into or engage in any other business combination with any corporation, business trust or association, real estate investment trust, common law trust, limited liability company or unincorporated business (including a partnership whether general or limited) or any other Person; (s) Cause the Partnership to create or contribute to any multi-employer or single-employer plan as defined in Section 4001 of the Employee Retirement Income Security Act of 1974 and the laws, rules and regulations promulgated thereunder as each of the same may be amended from time to time; (t) Cause the Partnership to invest Net Cash Flow other than as expressly required or expressly permitted by this Agreement, including without limitation Sections 5.1(j), 5.4 (d), 5.4 (e) and 5.7 hereof. 5.4 F iduciary Duties of the General Partner. (a) The General Partner, in its capacity as General Partner, shall be under a fiduciary duty to conduct the affairs of the Partnership in the best interests of the Partnership and of the Partners, including the safekeeping and use of all of the Property and the use thereof for the exclusive benefit of the Partnership. (b) The General Partner shall cause the Partnership to conduct its business and operations separate and apart from that of the General Partner or any of its Affiliates, including, without limitation, (i) segregating Partnership assets and not allowing funds or other assets of the Partnership to be commingled with-the funds or other assets of, held by, or registered in the name of, the General Partner or any of its Affiliates provided that this clause (i) shall not apply with respect to any Affiliate that holds such Partnership funds and other assets in a custodial cash management account in the ordinary course of its trade or business, (ii) maintaining books and financial records of the Partnership seperate from the books and financial records of the General Partner and its Affiliates, and observing all Partnership procedures and formalities, including, without limitation, maintaining minutes of Partnership meetings and acting on behalf of the Partnership only pursuant to due authorization of the Partners, (iii) causing the Partnership to pay its liabilities from assets of the Partnership, and (iv) causing the Partnership to conduct its dealings with third parties in its own name and as a separate and independent entity. Any provision to the contrary notwithstanding, the liability of the General Partner for its duties and obligations to the Partnership and the Partners hereunder and under applicable law, and the standard of care with respect to the performance of such duties and obligations, shall in no way be reduced or affected by the delegation to or the performance by any Person of such duties or obligations. (c) Upon the execution of this Agreement, the General Partner shall provide to the Partnership a resolution of its board of directors or a certificate of an officer or authorized representative authorized by the board of directors naming those officers or authorized representatives (each a "Responsible Officer") of the General Partner that will be responsible for the management and operations of the Partnership in accordance with this Section 5 until such time as the General Partner has provided to the Partnership another resolution or officer's certificate naming others of its officers or authorized representatives to be Responsible officers, and the General Partner hereby covenants and agrees that such Responsible Officers are subject to its supervision and control and shall maintain the separateness of the Partnership's operations and otherwise comply with all of the terms of this Agreement. (d) Except as otherwise provided in this Agreement including Section 7.6 hereof, the General Partner shall cause the Partnership to distribute Net Cash Flow in accordance with Section 4.1 hereof. Any Net Cash Flow of the Partnership on or prior to October 31, 2000 that is not distributable pursuant to Section 4.1 hereof shall be invested by the General Partner as provided in, or permitted by Sections 5.1 (j), 5.4 (d), 5.4 (e) and 5.7 hereof; (e) As soon as commercially practicable after December 31, 1995, the General Partner shall use its best efforts to acquire on behalf of the Partnership any one or more of the assets described in clause (vi) of Section 5.3 (m) hereof; (f) The General Partner shall notify the Partners of the occurrence of an Uncured Default described in Section 10.8 (a) hereof or any Dissolution Event described in Section 12.1 hereof or any event which with notice or the passage of time would constitute an Uncured Default or Dissolution Event, and the action which the General Partner has taken or proposes to take with respect thereto, promptly, but no later than ten (10) Business Days, after any Responsible Officer has actual knowledge of such occurrence. (g) The General Partner shall take all actions which may be necessary or appropriate (i) for the continuation of the Partnership's valid existence as a limited partnership under the laws of the State of Delaware, and (ii) for the accomplishment of the Partnership's purposes, including the acquisition, management, maintenance, preservation, and operation of its assets in accordance with the provisions of this Agreement and applicable laws and regulations. (h) The General Partner shall devote to the Partnership such time as in its reasonable judgment may be necessary for the proper performance of its duties hereunder. (i) Except as otherwise provided in Section 1.9 hereof, the General Partner shall be under a fiduciary duty to conduct the affairs of the Partnership in the best interests of the Partnership and the Partners, including, without limitation, (i) the safekeeping and use of the Property, (ii) the use thereof for the exclusive benefit of the Partnership (subject to existing rights of others in the Property), (iii) the preservation of the Schedule A Assets free and clear of any Lien, except for Permitted Liens, and (iv) the maintenance of the Schedule A Assets and any substitutions therefor no longer subject to the Master Leases in accordance with the standards set-forth in the Master Leases. The General Partner shall not conduct the affairs of the Partnership so as to benefit any other business now owned or hereafter acquired by any Partner if such conduct also produces a detriment to the Partnership. (j) The General Partner shall, at all times, maintain in full force and effect the Capital Contribution Agreement. (k) The General Partner shall maintain all licenses, permits, registrations, authorizations, use agreements, consents, orders, or approvals of governmental or quasi-governmental agencies and authorities (whether United States federal, state, local, municipal, or foreign) necessary to the continued conduct of its business. (1) The General Partner shall cause the Partnership to perform all of its obligations and enforce all of its rights under the Transaction Documents and shall perform all of its duties required under this Agreement. 5.5 Indemnification of the Partners. (a) To the maximum extent permitted by applicable law, the Partnership, its receiver or its trustee (in the case of its receiver or trustee, to the extent of Partnership Property) shall indemnify, save harmless, and pay all Expenses of a Partner or any officer, director, shareholder, partner, employee, representative or agent of a Partner relating to any liability or damage incurred by reason of any act performed or omitted to be performed by such Partner, officer, director, shareholder, partner, employee, representative or agent in connection with the business of the Partnership, including reasonable attorneys' fees and expenses incurred by such Partner, officer, director, shareholder, partner, employee, representative or agent in connection with the defense of any action based on any such act or omission, which attorneys, fees and expenses may be paid as incurred, including all such liabilities under federal and state securities laws (including the Securities Act of 1933, as amended) as permitted by law. (b) In the event of any action by a Partner against the General Partner or any officer, director, shareholder, partner, employee, representative or agent of the General Partner, including a Partnership derivative suit, the Partnership shall indemnify, save harmless, and pay all Expenses (including attorneys' fees) of the General Partner, officer, director, shareholder, partner, employee, representative or agent incurred in the defense of such action, if the General Partner, officer, director, shareholder, partner, employee, representative or agent is successful in such action. (c) The Partnership shall indemnify, save harmless, and pay all Expenses of the General Partner if, for the benefit of the Partnership, the General Partner makes any deposit, acquires any option, or makes any other similar payment or assumes any obligation in connection with any property proposed to be acquired by the Partnership and suffers any financial loss as the result of such action. (d) Notwithstanding anything to the contrary in any of Sections 5.5 (a), 5.5 (b) and 5.5 (c) hereof, such Sections shall be enforced only to the maximum extent permitted by law, and no Partner shall be indemnified from any liability for the fraud, bad faith, willful misconduct, negligence or failure to perform in accordance with this Agreement of or by itself or any of its Affiliates. (e) Notwithstanding anything to the contrary in any of Sections 5.5 (a), 5.5 (b) and 5.5 (c) hereof, in the event that any provision in any of such Sections is determined to be invalid in whole or in part, such Section shall be enforced to the maximum extent permitted by law. (f) Without limitation of the obligations under Section 10.8 (b) (ii) (1), 12.3 (a) (iii) or 12.4 hereof, notwithstanding anything to the contrary in this Agreement, in no event will any indemnification set forth in this Section 5.5 subject any Limited Partner to personal liability. (g) All indemnities provided for in this Agreement shall survive the transfer of a Partner's Interest. 5.6 Compensation; Expenses and Loans. (a) Compensation and Reimbursement. Except as otherwise provided in this Section 5.6 and Section 5.5 (c) hereof, no Partner shall receive any salary, fee, or draw for services rendered to or on behalf of the Partnership or otherwise in its capacity as a Partner, nor shall any Partner be reimbursed for any expenses incurred by such Partner on behalf of the Partnership or otherwise in its capacity as a Partner. (b) Expenses. The General Partner shall pay all ordinary and customary expenses of the Partnership incurred in the ordinary course of the Partnership's day-to-day business in exchange for an annual management fee paid to the General Partner in the amount of $82,500 for calendar year 1993 and $165,000 for each subsequent calendar year (or portion thereof) provided, however, that if the Partnership is liquidated pursuant to Section 12 hereof and a liquidator other than the General Partner is appointed in accordance with Section 12 hereof, the management fee for the calendar year in which the liquidation occurs shall be paid to the liquidator in lieu of the General Partner. In addition, the Partnership shall either pay directly or reimburse the General Partner for other reasonable expenses (such as lease administration or litigation costs) incurred in connection with the Partnership's business that would not be considered to be normal ongoing expenses of the Partnership. 5.7 Temporary Investments. All Property in the form of cash not otherwise invested shall be deposited as soon as commercially reasonable for the benefit of the Partnership in one or more accounts of the Partnership maintained in such financial institutions as the General Partner shall determine or shall be invested in short-term liquid securities or other cash-equivalent obligations of such financial institutions or of the United States (or institutions whose obligations are guaranteed as to payment by the United States), and withdrawals shall be made only in the regular course of Partnership business on such signature or signatures as the General Partner may determine from time to time. Such financial institutions must have outstanding unsecured indebtedness that is rated A" or better by Standard & Poor's Corporation or A3 or better by Moody's Investor's Service, Inc. (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating unsecured bank indebtedness).
SECTION 6. ROLE OF LIMITED PARTNERS
6.1. Rights or Powers. The Limited Partners shall not have any right or power to take part in the management or control of the Partnership or its business and affairs or to act for or bind the Partnership in any way. Notwithstanding the foregoing, the Limited Partners shall have all the rights and powers specifically set forth in this Agreement. A Limited Partner, any Affiliate thereof or an employee, stockholder, agent, director or officer of a Limited Partner or any Affiliate thereof, may also be an employee or agent of the Partnership or an employee, agent, stockholder, director or officer of a General Partner. The existence of these relationships and acting in such capacities will hot result in the Limited Partner being deemed to be participating in the control of the business of the Partnership or otherwise affect the limited liability of the Limited Partner. 6.2 Voting Rights. The Limited Partners shall have the right to vote only on the matters (a) specifically reserved for their vote or approval which are set forth in this Agreement, or (b) required by the Act. 6.3 .Procedure for Consent. In any circumstances requiring the agreement, approval or consent of the Limited Partners specified in this Agreement, such agreement, approval or consent may, except where a standard for such agreement, approval or consent is provided for expressly in this Agreement, be given or withheld in the sole and absolute discretion of the Limited Partners. If the General Partner receives the necessary agreement, approval or consent of the Limited Partners to such action, the General Partner shall be authorized and empowered to implement such action without further authorization by such Limited Partners. Such agreement, approval or consent must be obtained in writing or by telephone or facsimile, if such telephone conversation or facsimile is followed by a hard copy of the telephone conversation or facsimile communication sent by registered or certified mail, postage and charges prepaid, addressed as described in Section 14.1 hereof, or to such other address as such Person may from time to time specify by notice to the other Partners; provided, however, that such agreement, approval or consent shall be deemed to have been given by a Limited Partner if such Limited Partner does not otherwise notify the General Partner in writing (a) within sixty (60) days after such Limited Partner is initially notified and (b) within ten (10) days after such Limited Partner is subsequently notified, in each case in writing by the General Partner that such Limited Partner's agreement, approval or consent is requested.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 In General. As of the date hereof, each Partner hereby makes each of the representations, warranties and covenants applicable to such Partner as set forth in Sections 7.2, 7.3 and 7.4 hereof, and such warranties, representations and covenants shall survive the execution of this Agreement. 7.2 Representations, Warranties and Covenants. Each Partner hereby represents, warrants and covenants to the Partnership and to each of the other Partners that: (a) Due Incorporation or Formation; Authorization of Agreement. Such Partner is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Partner is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Partner has the corporate or partnership power and authority to execute and deliver this Agreement and to perform its obligations hereunder and the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate or partnership action. This Agreement has been duly executed and delivered by such Partner and constitutes the legal, valid and binding obligation of such Partner. (b) No Conflict with Restrictions; No Default. Neither the execution, delivery and performance of this Agreement nor the consummation by such Partner of the transactions contemplated hereby to occur on or about the Effective Date (i) will conflict with, violate or result in a breach, whether with notice or lapse of time or both, of any of the terms, conditions or provisions of any law, regulation, order, writ, injunction, decree, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator, applicable to such Partner, (ii) will conflict with, violate, result in a breach of or constitute a default under, whether with notice or lapse of time or both, any of the terms, conditions or provisions of the articles of incorporation or bylaws of such Partner, (iii) will conflict with, violate, result in a breach of or constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights or require any consent, authorization or approval under any indenture, note, bond, mortgage, lease agreement or other instrument or agreement to which such Partner is a party or by which such Partner is or may be bound, or (iv) will result in the creation or imposition of any lien, claim, charge or encumbrance upon any of the material properties or assets of such Partner. (c) Governmental Authorizations. Any registration, declaration or filing with, or consent, approval, license, permit or other authorization or order by, any governmental or regulatory authority, domestic or foreign, that is required in connection with the valid execution, delivery, acceptance and performance by such Partner of its obligations under this Agreement, or the consummation by such Partner of any transaction contemplated hereby to occur on or about the Effective Date, has been completed, made or obtained on or before the date hereof. (d) Litigation. There are no actions, suits, proceedings or investigations pending or, to the knowledge of such Partner, threatened against or affecting such Partner or any of its properties, assets or businesses in any court or before or by any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit or proceeding, which could, if adversely determined) reasonably be expected to materially impair such Partner's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Partner; and such Partner has not received any currently effective notice of any default, and such Partner is not in default (whether with notice or lapse of time or both), under any applicable order, writ, injunction, decree, permit, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Partner's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Partner. (e) Subsidiary. All of the outstanding capital stock or ownership interests in the capital and profits of such Partner is owned, directly or indirectly, by its Parent. (f) Investigation/Intent Such Partner is acquiring its Interest based upon its own investigation, and the exercise by such Partner of its rights and the performance of its obligations under this Agreement will be based upon its own investigation, analysis and expertise; except for any transfer of Investor's Interest as contemplated or permitted by this Agreement, such Partner's acquisition of its interest is being made for its own account as principal, for investment and not with a view to the sale, distribution or fractionalization thereof, in whole or in part; and such Partner is a sophisticated investor possessing an expertise in analyzing the benefits and risks associated with acquiring investments that are similar to the acquisition of its Interest. Such Partner intends to participate as a partner in a Delaware limited partnership formed by this Agreement for the purpose of making an economic profit from transactions entered into by the Partnership. (g) Confidentiality. Except as contemplated hereby or required by a court of competent authority or regulatory agency or otherwise in connection with an examination of such Partner's records by appropriate authorities, each Partner shall keep confidential and shall not disclose to others (except its agents and advisors) and shall use its reasonable efforts to prevent its Affiliates and any of its, or its Affiliates', present or former employees, agents, and representatives from disclosing to others without the prior written consent of all Partners any information which pertains to this Agreement, any negotiations pertaining thereto, any of the transactions contemplated hereby or the business of the Partnership. Notwithstanding the foregoing, (i) neither the Partners nor any of their Affiliates shall be precluded from participating in similarly structured transactions or making generic reference to this transaction or methods of addressing issues arising in this transaction, provided, however, that any such disclosure under this sentence shall be subject to confidentiality agreements similar to the provisions of this Section 7.2 (g) and (ii) each Partner shall be free of its confidentiality obligations to the extent that any information that would otherwise be deemed confidential, hereunder (a) is now in the public domain or comes into the public domain through no fault of such Partner, (b) is now or subsequently becomes known to such Partner from a party not bound by a confidentiality agreement, or (c) was otherwise known by such Party. (h) Citizenship. Such Partner is, and except as may be consented to by the other Partners (which consent shall not be unreasonably withheld), shall remain throughout the term of the Partnership, a "citizen of the United States" within the meaning of Section 101 (16) of the Federal Aviation Act and shall notify the General Partner immediately upon becoming aware of any fact or circumstance that would lead reasonably to the conclusion that such Partner is at risk of losing such citizenship. (i) Liens . Such Partner shall not cause or permit to exist a Lessor's Lien attributable to or caused by it and will promptly, at its own expense, take such action as may be necessary to discharge any Lessor's Lien attributable to it or caused by it. (j) ERISA . Such Partner is not acquiring its Interest in the Partnership with the assets of any "employee benefit plan" as defined in Section 3 (3) of the Employee Retirement Income Security Act of 1974, as amended, or any "plan" within the meaning of Section 4975 (e) (1) of the Code. (k) Investment Company Act and Public Utility Holding Company Act of 1935 . No such Partner is an "investment company" as defined in or subject to regulation under the Investment Company Act of 1940, as amended. No such Partner nor any Affiliate of such Partner, including the Partnership, is a "holding company," an "affiliate of a holding company," or a "subsidiary of a holding company" as defined in, or is subject to any form of regulation, limitation or control under the Public Utility Holding Company Act of 1935, as amended. (l) No Other Brokers Or Financial Advisory Fees. Except for the financial advisory fee to be paid by the Partnership to BT Securities Corporation and the fee paid to PCI pursuant to the Fee Agreement, no such Partner nor any Affiliate thereof has engaged any broker, financial advisor or other Person that would give rise to a claim against the Partnership or any other Partner or Affiliate thereof for any brokers, financial advisory, investment banking, finders or similar fee in connection with the transactions occurring on the Effective Date and arising by, through or under such Partner or its Affiliates. (m) Solvency. On the Effective Date, after giving effect to the transactions occurring on the Effective Date, such Partner is solvent within the meaning of any applicable federal or state statute relating to Bankruptcy. 7.3 Additional Representations, Warranties and Covenants By Investor. In addition to the representations, warranties and Covenants set forth in Section 7.2 hereof, Investor hereby represents and warrants to each of TIFC and Assetco that: (a) Investor was formed for the purpose of acquiring an Interest in the Partnership; (b) Investor is a direct wholly owned subsidiary of Parent; (c) on the Effective Date, no more than 10 percent of the value of the total assets of Parent (determined (i) by taking into account assets directly held by Parent and assets indirectly held through one or more wholly owned subsidiaries of Parent, and (ii) after giving effect to Investor's Capital Contribution as provided in Section 2.2 of this Agreement) consists of securities of issuers which are or would, but for the exception set forth in Section 3 (c) (1) (A) of the U.S. Investment Company Act of 1940, as amended, be excluded from the definition of "investment company" solely by Section 3 (c) (1) of such Act. 7.4 Additional Representations,Warranties and Covenants By TIFC and Assetco. In addition to the representations, warranties and covenants set forth in Section 7.2 hereof, each of TIFC and Assetco hereby represents and warrants to Investor that: (a) Good Title. The Partnership has good and marketable title to all of the rights, interest and assets included within the "Assets" as defined in the Contribution Agreements, free and clear of all obligations, liens, pledges, claims, rights of first refusal, options, charges, security interests, mortgages, or other encumbrances of any nature whatsoever, other than those arising solely in favor of the Partnership from the transactions contemplated by the Contribution Agreements. (b) No Existing Partnership Debt. Prior to the Effective Date, the Partnership has not borrowed or incurred any liability or other Debt, other than Debt described in Section 5.3 (j) (i)-(v) hereof. (c) No Conflict with Restrictions; No Default by GECC. Neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby (i) will conflict with, violate or result in a breach, whether with notice or lapse of time or both, of any of the terms, conditions or provision ' s of any law, regulation, order, writ, injunction, decree, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator, applicable to GECC or any Affiliate thereof, (ii) will conflict with, violate, result in a breach of or constitute a default under, whether with notice or lapse of time or both, any of the terms, conditions or provisions of the articles of incorporation or bylaws of GECC or any Affiliate thereof, (iii) will conflict with, violate, result in a breach of or constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights or require any consent, authorization or approval under any indenture, note, bond, mortgage, lease agreement or other instrument or agreement to which GECC or any Affiliate thereof is a party or by which GECC or any Affiliate thereof is or may be bound or to which any of its material properties or assets is subject, or (iv) will result in the creation or imposition of any lien, claim, charge or encumbrance upon any of the material properties or assets of GECC or any Affiliate thereof. (d) Partnership Status. The Partnership has been duly formed as a limited partnership under the Act. The Partnership has been a partnership for United States federal income tax purposes since the date of its formation. 7.5 Indemnification and Cooperation Regarding Claims. (a) Indemnification. Each Partner (the "Indemnitor") hereby agrees to indemnify, defend and hold harmless the Partnership and each other Partner hereto and GECC and their respective successors, officers, directors, partners, employees, agents and permitted assigns (collectively the "Indemnified Parties") harmless, on an after-tax basis, from and against any and all liabilities, obligations, losses, damages (excluding consequential damages), penalties, fines, assessments (whether criminal or civil), claims, actions, inquiries, suits, judgments, costs, expenses (including reasonable legal fees and expenses and costs of investigation), disbursements or demands ("Damages") arising out of, resulting from or relating to a breach or violation of any representation, warranty, covenant or agreement made by the Indemnitor pursuant to this Agreement or in 'any document delivered by the Indemnitor pursuant hereto or the transactions contemplated hereby. Notwithstanding the foregoing, the Indemnitor shall have no obligation to reimburse, indemnify, defend or hold any Indemnified Party harmless from any Damages to the extent such Damages are caused by the gross negligence or willful misconduct of such Indemnified Party. (b) Cooperation Regarding Claims. (i) If any Indemnified Party shall receive notice or have knowledge of any claim, demand, action, suit or proceeding that said Indemnified Party may have reason to believe may result in a claim for indemnification pursuant to this Section 7.5, such Indemnified, Party shall, as promptly as possible, give the Indemnitor notice thereof. Such notice shall include, to the extent known to such Indemnified Party: (A) reasonably detailed description of the facts and circumstances relating to such claim, demand, action, suit or proceeding, (B) a complete copy of all related notices, pleading and other papers and (C) a description in reasonable detail of the basis for the potential claim for indemnification; provided, however, that failure promptly to give notice or to provide such information and documents shall not relieve the Indemnitor of any obligation of indemnification it may have under this Section 7.5. (ii) The parties shall consult with each other regarding, and cooperate in respect of the response to, and the defense of, any claim, demand, action, suit or proceeding. The Indemnitor shall be entitled to assume the defense or to represent the interests of the Indemnified Party seeking indemnification in respect of such claim, demand, action, suit or proceeding which shall include the right to select legal counsel and other consultants satisfactory to the Indemnified Party, appear in proceedings on behalf of such Indemnified Party and to propose accept or reject offers of settlement, all at its sole cost; provided, however, that if the defendants in any such action include both the Indemnified Party and the Indemnitor and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it and/or other Indemnified Parties which are different from or additional to those available to the Indemnitor, the Indemnified Party shall have the right to select its own counsel to defend such action on behalf of such Indemnified Party or Parties at the expense of the Indemnitor. 7.6 Damage Payments. Any damages, indemnification or other payments made to the Partnership with respect to any breach or other violation of any representation, warranty, covenant or other agreement made pursuant to Section 7 hereof, to the extent paid with respect to costs, liabilities or damages incurred by a Partner or an Affiliate thereof, shall immediately be paid by the Partnership to such Partner or Affiliate.
SECTION 8. ACCOUNTING, BOOKS AND RECORDS
8.1 Accounting, Books and Records. The Partnership shall maintain at its principal place of business separate books of account for the Partnership which shall show a true and accurate record in United States dollars of all business transactions arising out of and in connection with the conduct of the Partnership and the operation of its business and in sufficient detail to allow preparation of tax returns required to be prepared pursuant to Section 8.3 hereof and the maintenance of "Capital Accounts" in accordance with the definition of "Capital Account." The Partnership shall use the accrual method of accounting in preparation of its annual reports and for tax purposes and shall keep its books and records accordingly. Subject to Section 8.4 hereof, any Partner or its designated representative shall have the right at its own cost and expense, at any reasonable time, to have access to and inspect and copy the contents of such books or records. The General Partner shall be reimbursed by such Partner for reasonable costs incurred as a result of such inspection. The rights granted to a Partner pursuant to this Section 8.1 are expressly subject to compliance by such Partner with the reasonable safety and security guidelines of the Partnership, as such procedures and guidelines may be established from time to time. The General Partner shall not keep confidential from any Limited Partner any information concerning the Partnership based on Section 17-305 (b) of the Act. 8.2 Reports. (a) In General. The General Partner shall be responsible for the preparation of financial reports of the Partnership and the coordination of financial matters of the Partnership with the Partnership's accountants. (b) Annual Reports. Within sixty (60) days (with respect to unaudited statements) and one hundred twenty (120) days (with respect to audited statements) after the end of each Fiscal Year, and at such time as distributions are made to the Partners pursuant to Section 12.2 hereof, the General Partner shall cause to be prepared and each Partner to be furnished with financial statements (accompanied in the case of audited statements by a report thereon of the Partnership's accountants stating that such statements are prepared and fairly stated in all material respects on a federal income tax basis, and, to the extent inconsistent therewith, in accordance with this Agreement), including the following: (i) A copy of the balance sheet of the Partnership as of the last day of such Fiscal Year; (ii) A statement of income or loss for the Partnership for such Fiscal Year; (iii) A statement of the Partners' Capital Accounts and changes therein for such Fiscal Year; and (iv) A statement of Partnership cash flow and Net Cash Flow for such Fiscal Year. (c) Retirement Date Reports. The General Partner shall cause to be prepared and each Partner furnished with (x) on the date on which any distribution is made pursuant to Section 10.8 (b) hereof in retirement of Investor's entire Interest, each of the following statements together with a certificate of the General Partner executed by a financial officer thereof familiar with the financial affairs of the Partnership that such statements have been prepared in accordance with this Agreement, subject to adjustment by the audited statements to be provided pursuant to clause (y), and (y) not later than one hundred twenty (120) days after the date described in clause (x), certification by an office of an internationally recognized accounting firm selected by the General Partner that such statements have been prepared in accordance with this Agreement: (i) A balance sheet as of the Retirement Allocation Date; and (ii) A statement of the Partners' Capital Accounts as adjusted pursuant to Section 10.8 (b) hereof. Investor may elect to have a second internationally recognized accounting firm prepare the balance sheet and Capital Account statements described in this Section 8.2(c), which statements shall be certified by such accounting firm as having been prepared in accordance with this Agreement. If the Investor's Capital Account balance as certified by the second accounting firm differs by less than fifteen percent from the Investor's Capital Account balance as certified by the first accounting firm, then the Capital Account balance determined under this Section 8.2 (c) shall be the average of the two Capital Account balances. If the Investor's Capital Account balance as certified by the second accounting firm differs by more than fifteen percent from the investor's Capital Account balance as certified by the first accounting firm, then a third internationally recognized accounting firm selected by mutual agreement of the Partners shall prepare the balance sheet and Capital Account statements described in this Section 8.2 (c), which statements shall be certified by such accounting firm as having been prepared in accordance with this Agreement. The Capital Account balance determined under this Section 8.2 (c) shall be the average of three Capital Account balances determined by the three accounting firms. The fees and expenses of the first-accounting firm shall be paid by the Partnership. The fees and expenses of the second and third accounting firms shall be paid by the Investor. 8.3 Tax Matters Partner; Tax Information. (a) The General Partner is specifically authorized to act as the "Tax Matters Partner" under the Code and in any similar capacity under state, local or foreign law. The Tax Matters Partner shall have the authority to make any and all elections for federal, state, and local tax purposes including, without limitation, any election, if permitted by applicable law: (i) with the unanimous consent of the Partners, to adjust the basis of Property pursuant to Code Sections 754, 734 (b) and 743 (b), or comparable provisions of state or local law, in connection with transfers of Interests and Partnership distributions; (ii) to extend the statute of limitations for assessment of tax deficiencies against the Partners with respect to adjustments to the Partnership's federal, state, local or foreign tax returns; and (iii), subject to Section 5.3 (d) hereof, to the extent provided in Code Sections 6221 through 6231, to represent the Partnership and the Partners before taxing authorities or courts of competent jurisdiction in tax matters affecting the Partnership and the Partners in their capacities as Partners, and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that affect the rights of the Partnership and the Partners. The General Partner shall provide the other Partners with notice of the commencement of any proceedings described in clause (iii) hereof and shall provide such Partners with periodic reports (written or oral) throughout such proceedings of the issues and responses raised in such proceedings. (b) All necessary tax information shall be delivered by the General Partner to each Partner as soon as practicable but not later than five (5) months after the end of each Fiscal Year. The General Partner will provide a reasonable estimate of such tax information to each Partner within sixty (60) days after the end of each Fiscal Year.
SECTION 9. AMENDMENTS; VOTING AND CONSENT
9.1 Amendments. Amendments to this Agreement may be proposed by any Partner. Following such proposal, the General Partner shall submit to the Partners a verbatim statement of any proposed amendment and the General Partner shall include in any such submission a recommendation as to the proposed amendment. The General Partner shall seek the written vote of the Partners on the proposed amendment. A proposed amendment shall be adopted and be effective as an amendment hereto if it receives the affirmative vote of all of the Partners; provided that such amendment shall be in writing and executed by all of the Partners. Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing signed by the party against which such termination, amendment, supplement or waiver is sought. 9.2 Voting and Consent. A Partner's voting rights or consent rights for purposes of votes and consents required or permitted pursuant to this Agreement shall equal such Partner's Percentage Interest.
SECTION 10. TRANSFERS
10.1 Restriction on Transfers. Except as otherwise permitted by this Agreement or the Fee Agreement, no Partner shall Transfer all or any portion of its Interest. In the event that any Partner pledges or otherwise encumbers all or any part of its Interest as security for the payment of a Debt, any such pledge or hypothecation shall be made pursuant to a pledge or hypothecation agreement that requires the pledgee or secured party to be bound by all of the terms and conditions of this Section 10. A Transfer of all or a portion of an Interest includes (a) a Transfer of a beneficial interest in a grantor trust that holds an Interest, (b) any event that causes a grantor trust that holds an interest not to be treated as a grantor trust for federal income tax purposes, and (c) a Transfer by PCI of all or any portion of the capital stock or beneficial ownership interest of Investor or any Transferee of Investors Interest in the Partnership. 10.2 Permitted Transfers. Subject to the conditions and restrictions set forth in Section 10.3 hereof, a Partner may at any time Transfer all or any portion of its Interest, and PCI may transfer all or any portion of the capital stock or beneficial ownership of Investor or any Transferee of Investor's Interest in the Partnership, to (a) any other Partner or Wholly owned Affiliate of another Partner, (b) any Wholly Owned Affiliate of the transferor, (c) the transferor's, administrator or trustee to whom such interest is transferred involuntarily by operation of law, or (d) any Person approved by all the other Partners; provided, however, that in the case of a transfer described in clause (a) or clause (b) of this sentence, such transfer shall be permitted only if (x) performance or payment by the transferor Partner is guaranteed by an Affiliate of such transferor Partner, and such Affiliate agrees to be liable as guarantor of the performance or payment by the transferee, and (y) such Affiliate becomes a party to all Transaction Documents to which the transferor Partner is a party and executes such documents and instruments as the General Partner may reasonably request as may be necessary or appropriate to confirm such Affiliate's agreement to be bound by the terms and conditions of such Transaction Documents (any such Transfer being referred to in this Agreement as a "Permitted Transfer"). 10.3 Conditions to Permitted Transfers. A Transfer shall not be treated as a Permitted Transfer under Section 10.2 hereof unless and until the following conditions are satisfied, provided, however, that with respect to a Permitted Transfer that is a Transfer described in Section 10.1(c), only the condition set forth in Section 10.3 (e) shall be required to be satisfied: (a) Except in the case of a Transfer involuntarily by operation of law, the transferor and transferee shall execute and deliver to the Partnership (i) such documents and instruments of conveyance as may be necessary or appropriate in the opinion of counsel to the Partnership to effect such Transfer and to confirm the agreement of the transferee to be bound by the provisions of this Section 10, and (ii) such information as will comply with the requirements of Code section 60501. In the case of a Transfer of Interests involuntarily by operation of law, the Transfer shall be confirmed by presentation to the Partnership of legal evidence of such Transfer, in form and substance satisfactory to counsel to the Partnership. In addition, unless the requirements of this sentence have been waived by the General Partner, the Partnership shall be reimbursed by the transferor and/or transferee for all costs and expenses that it reasonably incurs in connection with such Transfer. (b) The Transfer will not cause the Partnership to terminate for federal income tax purposes and, except in the case of a Transfer involuntarily by operation of law, the transferor shall furnish to the Partnership an opinion of counsel to such effect, unless the Partners unanimously agree to waive the requirement that such opinion be provided. Such counsel and opinion shall be reasonably satisfactory to all the Partners. (c) The transferor and transferee shall furnish the Partnership with the transferee's taxpayer identification number, sufficient information to determine the transferee's initial tax basis in the Interest transferred, and any other information reasonably necessary to permit the Partnership to file all required tax returns and other legally required information statements or returns. Without limiting the generality of the foregoing, the Partnership shall not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred Interest until it has received such information. (d) Either (a) such Interest is registered under the Securities Act of 1933, as amended, and any applicable state securities laws, or (b) such Transfer is exempt from all applicable registration requirements and will not violate any applicable laws regulating the Transfer of securities and, except in the case of a Transfer of an Interest involuntarily by operation of law, the transferor shall provide an opinion of counsel to such effect, unless the Partners unanimously agree to waive the requirement that such opinion be provided. Such opinion and counsel shall be reasonably satisfactory to all the Partners. (e) The Transfer will not cause the Partnership to be deemed to be an "investment company" under the Investment Company Act of 1940, as amended, cause any Partner to be subject to any federal or state banking law, or cause any Partner or any Affiliate of such Partner, including the Partnership, to be a "holding company," an "affiliate of a holding company" or a "subsidiary of a holding company" as defined in, or subject to any form of regulation, limitation or control under the Public Utility Holding Company Act of 1935, as amended, and, in each case, except in the case of a Transfer of an Interest involuntarily by operation of law, the transferor shall provide an opinion of counsel to such effect, unless the Partners unanimously agree to waive the requirement that such opinion be provided. Such opinion and counsel shall be reasonably satisfactory to all the Partners. (f) Except in the case of a Transfer of an Interest involuntarily by operation of law, if the transferor is a General Partner, the transferor and transferee shall provide the Partnership with an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to all the Partners, to the effect that such Transfer will not cause the Partnership to become taxable as a corporation for federal income tax purposes. 10.4 Prohibited Transfers. Any purported Transfer of an Interest in the Partnership that is not a Permitted Transfer shall be null and void and of no force or effect whatever; provided that, if the Partnership is required to recognize a Transfer that is not a Permitted Transfer (or if the Partnership, in its sole discretion, elects to recognize a Transfer that is not a Permitted Transfer), the Interest Transferred shall be strictly limited to the transferor's rights to allocations and distributions as provided by this Agreement with respect to the transferred Interest, which allocations and distributions may be applied (without limiting any other legal or equitable rights of the Partnership) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Interest may have to the Partnership. In the case of a Transfer or attempted Transfer of an Interest that is not a Permitted Transfer, the parties engaging or attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Partnership and the other Partners from all cost, liability, and damage (including any damages incurred by a Partner pursuant to its obligation to restore its negative Capital Account balance pursuant to Section 12.4 hereof) that any of such indemnified Partners may incur (including, without limitation, incremental tax liabilities, lawyers fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby. Any indemnification payments made to the Partnership under this Section 10.4, to the extent paid with respect to costs, liabilities or other damages incurred by a Partner, shall immediately be paid by the Partnership to such Partner. 10.5 Rights of Unadmitted Assignees. (a) In General. A Person who acquires an Interest but who is not admitted as a substituted Partner pursuant to Section 10.6 hereof shall be entitled only to allocations and distributions with respect to such Interest in accordance with this Agreement, and shall have no right to any information or accounting of the affairs of the Partnership, shall not be entitled to inspect the books or records of the Partnership, and shall not have any of the rights of a General Partner or a Limited Partner under the Act or this Agreement. (b) General Partner . A transferee who acquires an Interest from a General Partner hereunder by means of a Transfer that is permitted under this Section 10, but who is not admitted as a substituted General Partner, shall have no authority to act for or bind the Partnership, to inspect the Partnership's books, or otherwise to be treated as a General Partner. Following such a Transfer, the transferor shall not cease to be a general partner of the Partnership and shall continue to be a General Partner until such time (if ever) as the transferee is admitted as a General Partner. 10.6 Admission of Substituted Partners. Subject to the other provisions of this Section 10, a transferee of an Interest may be admitted to the Partnership as a substituted Partner only upon satisfaction of the conditions set forth in this Section 10.6: (a) The Partners unanimously consent to such admission, which consent may be given or withheld in the sole and absolute discretion of each Partner; (b) The Interest with respect to which the transferee is being admitted was acquired by means of a Permitted Transfer; (c) The transferee becomes a party to this Agreement as a Partner and executes such documents and instruments as the General Partner may reasonably request (including, without limitation, a counterpart or amendment to this Agreement and an amendment to the Certificate) as may be necessary or appropriate to confirm such transferee as a Partner in the Partnership and such transferee's agreement to be bound by the terms and conditions hereof; (d) Unless the requirements of this Section 10.6(d) have been waived by the General Partner, the transferee pays or reimburses the Partnership for all reasonable legal, filing, and publication costs that the Partnership incurs in connection with the admission of the transferee as a Partner with respect to the Transferred Interest; (e) If the transferee is a partnership or corporation, the transferee provides the Partnership with evidence satisfactory to counsel for the Partnership that such transferee has made each of the representations and undertaken each of the warranties described in Section 7 hereof; and (f) In the event that the transferee of an Interest from a General Partner is admitted as a substituted General Partner hereunder, such transferee shall be deemed admitted to the Partnership as a General Partner immediately prior to the Transfer, and such transferee shall continue the business of the Partnership without dissolution. 10.7 Distributions and Allocations in Respect of Transferred Interests. If any Interest is Transferred during any Allocation Year in compliance with the provisions of this Section 10, Profits, Losses, each item thereof, and all other items attributable to the Transferred Interest for such Allocation Year shall be divided and allocated between the transferor and the transferee by taking into account their varying Percentage Interests during the Allocation Year in accordance with Code Section 706(d), using any conventions permitted by law and agreed to by the transferor and the transferee. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter shall be made to the transferee. Solely for purposes of making such allocations and distributions, the Partnership shall recognize such Transfer not later than the end of the calendar month during which it is given notice of such Transfer, provided that, if the Partnership is given notice of a Transfer at least ten (10) Business Days prior to the Transfer, the Partnership shall recognize such Transfer as of the date of such Transfer, and provided further that if the Partnership does not receive a notice stating the date such Interest was transferred and such other information as the General Partner may reasonably require within thirty (30) days after the end of the Allocation Year during which the Transfer occurs, then all such items shall be allocated, and all distributions shall be made, to the Person who, according to the books and records of the Partnership, was the owner of the Interest on the last day of such Allocation Year. Neither the Partnership nor the General Partner shall incur any liability for making allocations and distributions in accordance with the provisions of this Section 10.7, whether or not the General Partner or the Partnership has knowledge of any Transfer of ownership of any Interest. 10.8 Retirement of Investor's Interest. (a) In General . (i) General Partner Retirement Election. The General Partner may, at any time after October 31, 2000, elect to cause Investor's Interest to be retired in accordance with this Section 10.8(a) (i) by giving written notice (an Optional Retirement Notice ") of its election to the Partnership and to all other Partners. Any Optional Retirement Notice given under this Section 10.8(a) (i) shall state the date on which the distribution required by Section 10.8(b) hereof shall be made to Investor (the "Retirement Date"), which date shall not be later than 60 Business Days after the date of such written notice. (ii) Investor Retirement Election. Investor may elect to retire from the Partnership at any time after October 31, 2000 by giving written notice (an " Optional Retirement Notice ") of its election to the Partnership and to all other Partners. Investor also may elect to retire from the Partnership by giving written notice thereof (an " Optional Retirement Notice ") to the Partnership at any time during which there exists an " Uncured Default " with respect to any Master Lease of any Schedule A Asset. For purposes hereof, an "Uncured Default" exists during any period commencing 60 Business Days after GECC under any Master Lease of a Schedule A Asset has failed to timely pay all amounts due under the applicable lease, if such failure is not cured before the end of such 60 day period, and ending on the day such failure is cured. A failure to pay amounts due under a Master Lease of a Schedule A Asset shall be deemed cured if all amounts due under the Master Lease are paid in full by or on behalf of the lessee, or the Owner Trustee has leased such Schedule A Asset subject to the defaulted Master Lease to any Person (including without limitation a Partner or an Affiliate of a Partner) that Investor consents to (which consent shall not be unreasonably withheld), pursuant to a lease agreement (a " Replacement Master Lease ") the terms of which do not vary in any material respect from the defaulted Master Lease, unless otherwise unanimously agreed by the Partners, requiring the lessee under such Replacement Master Lease to pay rent and other amounts equal to the amount required to be paid under the defaulted Master Lease (through October 31, 2000, and at the times required to be paid pursuant to the defaulted Master Lease) and such lessee pays to the Owner Trustee, as initial rent, an amount equal to the entire amount that GECC would be required to pay to cure its default under the defaulted Master Lease. Any Optional Retirement Notice given under this Section 10.8(a)(ii) shall state the date on which the distribution required by Section 10.8(b) hereof shall be made to Investor (the " Retirement Date "), which date shall not be earlier than 60 Business Days following the date of such notice. (b) Distributions, Allocations and Payments Upon Retirement of Investor's Interest. (i) Allocations. In the event that Investor's Interest is retired pursuant to Section 10.8(a) hereof, (w) the Fair Market Value of all Property shall be determined (which value shall be determined pursuant to the Appraisal Process for all Property other than Permitted Investments) and the Gross Asset Values of such Property shall be adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.10 hereof as of the day on which the General Partner or Investor delivers the Optional Retirement Notice (the " Retirement Allocation Date "); (x) Profits, Losses, Schedule A Asset Gain, and other items of Partnership income, gain, loss or deduction for the period beginning on the first day of the Allocation Year during which the Retirement Allocation Date occurs and ending on the Retirement Allocation Date (including Profits, Losses and Schedule A Asset Gain resulting from adjustment of the Gross Asset Value of Property to reflect the Fair Market Value of such Property on the Retirement Allocation Date) shall be allocated pursuant to Section 3 hereof; (y) no Profits, Losses or Schedule A Asset Gain for the period beginning on the first day after the Retirement Allocation Date shall be allocated to Investor (however, other required allocations, including those required by Regulation Section 1.704-l(b)(2)(iv)(f), Section 704(c) of the Code or Section 3.3 hereof (other than Section 3.3(j) hereof) shall continue to be made to Investor after the Retirement Allocation Date), and (z) the Partnership shall make distributions and payments in accordance with Section 10.8(b)(ii) hereof on the Retirement Date. (ii) Distributions and Payments. On the applicable Retirement Date, (1) If Investor's Capital Account on the Retirement Date after giving effect to the adjustments and allocations required by Section 10.8(b)(i) hereof and as reflected on the statement of Capital Accounts provided to the Partners pursuant to Section 8.2(c)(ii) hereof contains a deficit balance, Investor shall contribute cash to the Partnership equal to the amount that Investor would be required to contribute pursuant to Section 12.3(a)(iii) hereof, relating to the obligation of the Investor to contribute the deficit balance of its Capital Account upon liquidation of the Partnership. (2) If Investor's Capital Account on the Retirement Date, after giving effect to the adjustments and allocations required by Section 10.8(b)(i) hereof and as reflected on the statement of Capital Accounts provided to the Partners pursuant to Section 8.2(c)(ii) hereof contains a positive balance, the Partnership shall distribute to Investor an amount of cash and/or property (as determined pursuant to the following sentence) in an amount equal to the balance in Investor's Capital Account on the Retirement Date. Unless otherwise unanimously agreed by the Partners, the distribution to Investor under this Section 10.8(b)(ii)(2) shall consist of an undivided interest in each item of Property other than cash and a proportionate share of the Partnership's cash (including cash resulting from the sale of Property or the repayment of Permitted Investments), such undivided interest and proportionate share in each case being equal to the ratio of the balance in Investor's Capital Account to the aggregate balances of the Capital Accounts of all the Partners immediately after giving effect to the adjustments and allocations required by Section 10.8(b)(i) hereof and as reflected on the statement of Capital Accounts provided to the Partners pursuant to Section 8.2(c)(ii) hereof. (3) The Partnership shall pay to Investor any accrued but unpaid Guaranteed Payment Amount. (iii) In conjunction with the retirement of Investor pursuant to this Section 10.8, Assetco shall have a right of first refusal to purchase the Schedule A Assets from the Partnership for their Fair Market Value. If Assetco does not purchase the Schedule A Assets, any other Partner may purchase such assets for their Fair Market Value.
SECTION 11. GENERAL PARTNER
11.1 Covenant Not to Withdraw, Transfer, or Dissolve. Notwithstanding anything to the contrary in this Agreement, the General Partner hereby covenants and agrees not to (a) take any action to file a certificate of dissolution or its equivalent with respect to itself, (b) take any action that would cause a Voluntary Bankruptcy of such General Partner, (c) withdraw or attempt to withdraw from the Partnership other than following or in conjunction with a Transfer of its Interest to an Affiliate if such Affiliate assumes all duties and obligations of the General Partner under the Transaction Documents, (d) exercise any power under the Act to dissolve the Partnership, (e) Transfer all or any portion of its Interest as a General Partner other than to an Affiliate, or (f) petition for judicial dissolution of the Partnership. Further, the General Partner hereby covenants and agrees to continue to carry out the duties of a General Partner hereunder until the Partnership is dissolved and liquidated pursuant to Section 12 hereof. 11.2 Termination of Status as General Partner. (a) A General Partner shall cease to be a General Partner upon the first to occur of (i) the Bankruptcy of such Partner; (ii) in accordance with Section 10.5(b), the Transfer of such Partner's entire Interest as a General Partner unless the transferee does not become a substituted General Partner; (iii) the involuntary Transfer by operation of law of such General Partner's entire Interest in the Partnership, (iv) the unanimous vote of the Limited Partners to approve a request by such General Partner to retire, or (v) the election by Investor to remove such General Partner after such General Partner has attempted to make a Transfer of its Interest that is not permitted by Section 10.2 hereof, committed a material breach of this Agreement or its representations and warranties hereunder, or committed any other act or suffered any other condition that would justify a decree of dissolution of the Partnership under the laws of the State of Delaware. In the event a Person ceases to be a General Partner without having Transferred its entire Interest as a General Partner, such Person shall be treated as an unadmitted transferee of an Interest as a result of a Permitted Transfer of an Interest pursuant to Section 10.5 hereof. If a Person ceases to be a General Partner for any reason hereunder, such Person shall continue to be liable as a General Partner for all debts and obligations of the Partnership existing at the time such Person ceases to be a General Partner, regardless of whether, at such time, such debts or liabilities were known or unknown, actual or contingent. A Person shall not be liable as a General Partner for Partnership debts and obligations arising after such Person ceases to be a General Partner. Any debts, obligations, or liabilities in damages to the Partnership or another Partner of any Person who ceases to be a General Partner shall be collectible by any legal means and the Partnership is authorized, in addition to any other remedies at law or in equity, to apply any amounts otherwise distributable or payable by the Partnership to such Person to satisfy such debts, obligations, or liabilities. (b) It is the intention of the Partners that the Partnership not dissolve as a result of the cessation of any Person's status as a General Partner; provided, however, that if it is determined by a court of competent jurisdiction that the Partnership has dissolved, the provisions of Section 12.1 hereof shall govern. (c) If at the time a Person ceases to be a General Partner such Person is also a Limited Partner with respect to an Interest other than its Interest as a General Partner, such cessation shall not affect such Person's rights and obligations with respect to such Interest. 11.3 Election of Additional General Partners. Provided the Partnership has one General Partner, any Partner may nominate one or more Persons (other than an Ineligible Person for election as additional General Partners. The election of an additional General Partner, other than an Affiliate of Assetco, shall require an affirmative vote of all of the Partners and shall require an amendment to this Agreement in accordance with Section 9.1 hereof. The Partners hereby consent in advance to the election of any additional General Partner who is an Affiliate of Assetco and to any amendment of this Agreement necessary to reflect such election.
SECTION 12. DISSOLUTION AND WINDING UP
12.1 Dissolution Events. The Partnership shall dissolve and commence winding up and liquidating upon the first to occur of any of the following (each a " Dissolution Event "): (a) The occurrence of December 31, 2020; (b) The unanimous vote of the Partners to dissolve, wind up, and liquidate the Partnership; (c) The Bankruptcy of the General Partner, provided that such Bankruptcy shall not constitute a Dissolution Event if the Partnership is continued pursuant to this Section 12.1; (d) A final determination that an event has occurred that makes it unlawful to carry on the business of the Partnership; (e) The withdrawal or removal of a General Partner, the assignment by a General Partner of its entire Interest or any other event that causes a General Partner to cease to be a general partner under the Act, provided that any such event shall not constitute a Dissolution Event if the Partnership is not dissolved or is continued pursuant to this Section 12.1; or (f) The failure of the Partnership to make distributions to Investor required to be made pursuant to Section 10.8(b)(ii)(2) hereof. The Partners hereby agree that, notwithstanding any provision of the Act or the Delaware Uniform Partnership Law, the Partnership shall not dissolve prior to the occurrence of a Dissolution Event. Upon the occurrence of any event set forth in Section 12.1(c) or 12.1(e) (other than an event described in Section 12.1(e) hereof that did not violate Section 11.1 hereof) hereof, the Partnership shall not be dissolved or required to be wound up if (x) at the time of such event there is at least one remaining General Partner and that General Partner carries on the business of the Partnership (any such remaining General Partner being hereby authorized to carry on the business of the Partnership), or (y) within ninety (90) days after such event all remaining Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such event, of one or more additional General Partners (other than an Ineligible Person). If it is determined, by a court of competent jurisdiction, that the Partnership has dissolved prior to the occurrence of a Dissolution Event, or if upon the occurrence of an event described in Section 12.1(c) or 12.1(e) hereof (other than an event described in Section 12.1(e) hereof that did not violate Section 11.1 hereof), the Partners fail to appoint a substitute General Partner effective as of such event and to agree to continue the business of the Partnership as provided in this Section 12.1, then within an additional one hundred and eighty (180) days after such determination or the last day of such ninety (90) day period, as the case may be (the " Reconstitution Period "), Investor may elect to reconstitute the Partnership and continue its business on the same terms and conditions set forth in this Agreement by forming a-new limited partnership on terms identical to those set forth in this Agreement and having as a general partner a Person elected by Investor (other than an Ineligible Person). Upon any such election by Investor, all Partners shall be bound thereby and shall be deemed to have consented thereto. Unless such an election is made within the Reconstitution Period, the Partnership shall wind up its affairs in accordance with Section 12.2 hereof. If such an election is made within the Reconstitution Period, then: (i) The reconstituted limited partnership shall continue until the occurrence of a Dissolution Event as provided in this Section 12.1; (ii) If the successor general partner is not a former General Partner, then the Interest of any former General Partner shall be treated thenceforth as the Interest of a Limited Partner; and (iii) All necessary steps shall be taken to cancel this Agreement and the Certificate and to enter into a new partnership agreement and certificate of limited partnership, and the successor general partner may for this purpose exercise the powers of attorney granted the General Partner pursuant to Section 13 hereof; provided that the right of Investor to select a successor general partner and to reconstitute and continue the business of the Partnership shall not exist and may not be exercised unless the Partnership has received an opinion of counsel that the exercise of the right would not result in the loss of limited liability of any Limited Partner and neither the Partnership nor the reconstituted partnership would cease to be treated as a partnership for federal income tax purposes upon the exercise of such right to continue. 12.2 Winding Up. Upon the occurrence of a Dissolution Event (unless the Partnership is not to be wound up pursuant to Section 12.1 hereof), the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners and no Partner shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership's business and affairs. To the extent not inconsistent with the foregoing, all covenants' and obligations in Agreement shall continue in full force and effect until such time as the Property has been distributed pursuant to this Section 12.2 and the Certificate has been cancelled in accordance with the Act. The General Partner (or any Person (other than an Ineligible Person) that may be appointed by Investor, in the event (i) there is no remaining General Partner, or (b) the Partnership is dissolved as the result of a dissolution event described in Section 12.1(c), 12.1(e) (other than an event described in Section 12.1(e) hereof that did not violate Section 11.1 hereof) or 12.1(f) hereof and the General Partner has not made the distributions required by this Section 12.2 within seventy-five (75) Business Days after the Dissolution Event Date with respect to such event) shall be responsible for overseeing the winding up and dissolution of the Partnership, shall take full account of the Partnership's liabilities and Property, shall cause the Property to be liquidated, subject to Section 5.3(l)(ii) hereof, as promptly as is consistent with obtaining the fair value thereof unless it elects to make distributions of all or any part of the Property in kind and except as otherwise provided in this Section 12.2, and shall cause the Property or the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed in the following order: (a) First, to creditors other than the General Partner but including Limited Partners who are creditors, to the extent otherwise permitted by law, in satisfaction of all of the Partnership's debts and liabilities (including without limitation any accrued but unpaid fee under the Fee Agreement) (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for which reasonable provision or payment has been made and liabilities for distributions to Partners under sections 17-601 or 17-604 of the Act; (b) Second, to Investor in an amount equal to its accrued, unpaid Investor Guaranteed Payment; (c) Third, to the General Partner, in its capacity as a creditor of the Partnership, in satisfaction of all of the Partnership's debts and liabilities (whether by payment or the making of reasonable provision for payment thereof) (such liabilities in no event shall include amounts distributable pursuant to Section 4.1(b) hereof); and (d) The balance, if any, to the Partners in accordance with their Capital Accounts, after giving effect to all contributions, distributions, and allocations for all periods. No General Partner shall receive any additional compensation for any services performed pursuant to this Section 12, other than compensation pursuant to Section 5.6(b) hereof. Each General Partner understands and agrees that by accepting the provisions of this Section 12.2 setting forth the priority of the distribution of the assets of the Partnership to be made upon its liquidation, such General Partner expressly waives any right which it, as a creditor of the Partnership, might otherwise have under the Act to receive distributions of assets pari passu with the other creditors of the Partnership in connection with a distribution of assets of the Partnership in satisfaction of any liability of the Partnership, and hereby subordinates to said creditors any such right. In connection with the winding up of the Partnership and the liquidation of its assets, the Schedule A Assets may be sold for their fair market value, whether or not such fair market value equals the projected value thereof on Schedule A. Unless the Partners otherwise unanimously agree, undivided interests in each item of Property and proportionate share of cash (including cash from the disposition of Property) shall be distributed to the Partners in proportion to the respective balances in the Partners' Capital Accounts as determined pursuant to Section 12.2(d) hereof. 12.3 Compliance With Certain Requirements of Regulations Deficit Capital Accounts. (a) In the event the Partnership is "liquidated" within the meaning of Regulations Section 1.704-1(b) (2) (ii) (q), (i) Distributions shall be made pursuant to this Section 12 to the Partners who have positive Capital Accounts in compliance with Regulations Section 1.704-l (b) (2) (ii) ( b ) ( 2 ); (ii) If any General Partner's Capital Account has a deficit balance (after giving effect to all contributions, distributions, and allocations for all taxable years, including the year during which such liquidation occurs), such General Partner shall contribute to the capital of the Partnership the amount necessary to restore such deficit balance to zero in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3); (iii) If the Capital Account of Investor or any Person who is a successor to all or a portion of the Interest of Investor has a deficit balance (after giving effect to all contributions, distributions, and allocations for all taxable years, including the year during which such liquidation occurs), such Person shall contribute to the capital of the Partnership the amount necessary to restore such deficit balance to zero in compliance with Regulations Section 1.704-l(b)(2)(ii)(b)(3); provided that, except as provided in the following sentence, the aggregate amount required to be so contributed by such Persons shall not exceed $49,100,000 and the amount required to be contributed by any such Person shall not exceed the product of $49,100,000 multiplied by a fraction that corresponds to the portion of such Interest then held by such Person. Notwithstanding the foregoing, (x) Investor can elect to increase above $49,100,000 the amount it is required to contribute to the Partnership to restore a deficit balance in its Capital Account, provided in all cases, however, that Investor only may elect to increase its deficit Capital Account restoration obligation above $49,100,000 to the extent it provides evidence reasonably satisfactory to the General Partner of its financial capacity to perform such additional obligation, and (y) to the extent it has so elected to increase its deficit Capital Account restoration obligation above $49,100,000, Investor also can elect to decrease such obligation to (1) an amount at least equal to its actual deficit Capital Account balance existing at the time of such election, if such actual deficit balance is more than $49,100,000 or (ii) an amount at least equal to $49,100,000, if such actual deficit balance is $49,100,000 or less. (iv) If any Limited Partner (other than Investor or any successor to the Interest of Investor) has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all Fiscal Years, including the Fiscal Year during which such liquidation occurs), such Limited Partner shall have no obligation to make any contribution to the capital of the Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever. (b) In the discretion of the General Partner, a pro rata portion of the distributions that would otherwise be made to the Partners pursuant to Section 12.2 hereof may be: (i) distributed to a trust established for the benefit of the Partners for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent liabilities or obligations of the Partnership or of the General Partner arising out of or in connection with the Partnership. The assets of any such trust shall be distributed to the Partners from time to time, in the reasonable discretion of the General Partner in the same proportions as the amount distributed to such trust by the Partnership would otherwise have been distributed to the Partners pursuant to Section 12.2 hereof; or (ii) withheld to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership, provided that such withheld amounts shall be distributed to the Partners as soon as practicable. The portion of the distributions that would otherwise have been made to the General Partner and the Limited Partners that is instead distributed to a trust pursuant to Section 12.3(b)(i) hereof or withheld to provide a reserve pursuant to Section 12.3(b)(ii) hereof shall be determined in the same manner as the expense or deduction would have been allocated if the Partnership had realized an expense equal to such amounts immediately prior to distributions being made pursuant to Section 12.2 hereof. 12.4 Deemed Distribution and Recontribution. Notwithstanding any other provision of this Section 12, in the event the Partnership is liquidated within the meaning of Section 1.704-1 (b) (2) (ii) (q) of the Regulations but no Dissolution Event has occurred, the Property shall not be liquidated, the Partnership's liabilities shall not be paid or discharged, and the Partnership's affairs shall not be wound up. Instead, solely for federal income tax purposes, the Partnership shall be deemed to have distributed the Property in kind to the Partners, who shall be deemed to have assumed and taken subject to all Partnership liabilities, all in accordance with their respective Capital Accounts and, if the Capital Account of any Partner described in Sections 12.3 (a) (ii) and 12.3 (a) (iii) hereof has a deficit balance (after giving effect to all contributions, distributions, and allocations for all Fiscal Years, including the Fiscal Year during which such liquidation occurs), such Partner shall (subject to the limitation set forth in Section 12.3(a)(iii) hereof with respect to Investor and its successors) contribute to the capital of the Partnership the amount necessary to restore such deficit balance to zero in compliance with Regulations Section 1.704-l (b) (2) (ii) (b) (3). Immediately thereafter, the Partners shall be deemed to have recontributed the Property in kind to the Partnership, which shall be deemed to have assumed and taken subject to all such liabilities. 12.5 Rights of Partners. Except as otherwise provided in this Agreement or the Fee Agreement, (a) each Partner shall look solely to the assets of the Partnership for the return of its Capital Contribution and shall have no right or power to demand or receive property other than cash from the Partnership, and (b) no Partner shall have priority over any other Partner as to the return of its Capital Contributions, distributions, or allocations. 12.6 Notice of Dissolution. In the event a Dissolution Event occurs or an event occurs that would, but for provisions of Section 12.1 hereof, result in a dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter, provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business (as determined in the discretion of the General Partner) and shall publish notice thereof in a newspaper of general circulation in each place in which the Partnership regularly conducts business (as determined in the discretion of the General Partner). 12.7 Allocations and Payments During Period of Liquidation. Upon the liquidation of the Partnership pursuant to Section 12.2, (w) the Fair Market Value of all Property shall be determined and the Gross Asset Values of such Property shall be adjusted pursuant to clause (ii) of the definition of "Gross. Asset Value" in Section 1.10 hereof as of the Dissolution Event Date, (x) Profits, Losses, Schedule A Asset Gain and other items of Partnership income, gain, loss or deduction for the period beginning on the first day of the Allocation Year during which the Dissolution Event Date occurs and ending on the Dissolution Event Date (including Profits, Losses and Schedule A Asset Gain resulting from the adjustment to Gross Asset Value of such Property to reflect the Fair Market Value of such Property on the Dissolution Event Date) shall be allocated pursuant to Section 3 hereof; (y) no Profits, Losses or Schedule A Asset Gain for the period beginning on the first day after the Dissolution Event Date shall be allocated to Investor (however, other required allocations, including those required by Regulation Section 1.704-l (b) (2) (iv) (f), Section 704(c) of the Code or Section 3.3 hereof (other than Section 3.3(j) hereof) shall continue to be made to Investor after the Dissolution Event Date); and (z) allocation of Profits, Losses, Schedule A Asset Gain and other items of Partnership income, gain, loss or deduction for the period beginning on the first day after the Dissolution Event Date shall continue to be made to Assetco and TIFC. The " Dissolution Event Date " means, in the case of a liquidation as a result of an event described in (a) Section 12.1(a) hereof, December 31, 2020, (b) Section 12.1(b) hereof, the date on which the vote referred to in Section 12.1(b) hereof occurs, (c) Section 12.1(c) hereof, the date on which General Partner enters Bankruptcy, (d) Section 12.1(d) hereof, the date on which the final determination is issued, (e) Section 12.1(e) hereof, the date on which the event described in Section 12.1(e) hereof occurs, or (f) Section 12.1(f) hereof, the Retirement Allocation Date.
SECTION 13. POWER OF ATTORNEY
13.1 General Partner as Attorney-In-Fact. (a) Grant of Power. Each Partner hereby makes, constitutes, and appoints the General Partner and each successor General Partner, with full power of substitution and resubstitution, its true and lawful attorney-in-fact for it and in its name, place, and stead and for its use and benefit, to sign, execute, certify, acknowledge, swear to, file, and record (a) all certificates of limited partnership, amended name or similar certificates, and other certificates and instruments (including counterparts of this Agreement) which the General Partner may deem necessary or appropriate to be filed by the Partnership under the laws of the State of Delaware or any other state or jurisdiction in which the Partnership is doing or intends to do business; (b) any and all amendments or changes to this Agreement and the instruments described in (a), as now or hereafter amended, which the General Partner may deem necessary or appropriate to effect a change or modification of the Partnership in accordance with the terms. of this Agreement, including, without limitation, amendments or changes to reflect (i) the exercise by the General Partner of any power granted to it under this Agreement; (ii) any amendments adopted by the Partners in accordance with the terms of this Agreement; (iii) the admission of any substituted Partner; and (iv) the disposition by any Partner of its Interest; and (c) all certificates of cancellation and other instruments which the General Partner may deem necessary or appropriate to effect the dissolution and termination of the Partnership pursuant to the terms of this Agreement; and (d) any other instrument which is now or may hereafter be required by law to be filed on behalf of the Partnership or is deemed necessary or appropriate by the General Partner to carry out fully the provisions of this Agreement in accordance with its terms. Each Partner authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary or advisable in connection with any of the foregoing, hereby giving each such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in connection with the foregoing as fully as such Partner communication sent by overnight courier, charges prepaid and addressed as follows, or to such other address as such Person may from time to time specify by notice to the Partners: (a) If to the Partnership, to the Partnership at the address set forth in Section 1.4 hereof with a copy sent to King & Spalding, 191 Peachtree Street, Atlanta, Georgia 30303-1763, Attention William F. Nelson. (b) If to the General Partner, to the address set forth in Section 2.1 hereof with a copy sent to King & Spalding, 191 Peachtree Street, Atlanta, Georgia 30303-1763, Attention William F. Nelson. (c) If to Assetco, to the address set forth in Section 2.2 hereof with a copy sent to 1600 Summer Street, Stamford, Connecticut 06927 Attn: Manager of Operations-Commercial Aviation. (d) If to Investor, to the address set forth in Section 2.2 hereof with a copy sent to Potomac Capital Investment Corporation, 900 19th Street, N.W., Suite 600, Washington, D.C. 20006, Attention: Contracts Administrator. Any such notice delivered, mailed or dispatched shall become effective when received. A return receipt will be conclusive evidence of receipt. Any Person may from time to time specify a different address by notice to the Partnership and the Partners. 14.2 Binding Effect. Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Partners and their respective successors, transferees, and assigns. 14.3 Construction. Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Partner. The terms of this Agreement are intended to embody the economic relationship among the Partners and shall not be subject to modification by, or be conformed with, any actions by the Internal-Revenue Service except as this Agreement may be explicitly so amended and except as may relate specifically to the filing of tax returns. 14.4 Time. Time is of the essence with respect to this Agreement. might or could do personally, and hereby ratifying and confirming all that any such attorney-in-fact shall lawfully do or cause to be done by virtue thereof or hereof. (b) Form of Signature. To the extent the laws of any jurisdiction in which the Partnership engages in business requires that a limited partner sign, execute, certify, acknowledge, swear to, file, or record a certificate or other document, such certificate or other document shall be executed in the form set forth below:
						TIFD II INC., General Partner By: TIFD II INC., attorney-in-fact under Power of Attorney, dated December 2, 1993 By: Title:
13.2 Nature as Special Power. The power of attorney granted pursuant to this Section 13: (a) Is a special power of attorney coupled with an interest and is irrevocable; (b) May be exercised by any such attorney-in-fact by listing the Partners executing any agreement, certificate, instrument, or other document with the single signature of any such attorney-in-fact acting as attorney-in-fact for such Partners; and (c) Shall survive the Bankruptcy, insolvency, dissolution, or cessation of existence of a Partner and shall survive the delivery of an assignment by a Partner of the whole or a portion of its Interest, except that where the assignment is of such Partner's entire Interest and the assignee, with the consent of the General Partner, is admitted as a substituted Partner, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling any such attorney-in-fact to effect such substitution.
SECTION 14. MISCELLANEOUS
14.1 Notices. Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and sent by overnight courier, or by telephone or facsimile, if such telephone conversation or facsimile is followed by a hard copy of the telephone conversation or facsimile. 14.5 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof. 14.6 Severability. Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The preceding sentence of this Section 14.6 shall be of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Partner to lose the benefit of its economic bargain. 14.7 Incorporation by Reference. Every exhibit, schedule, and other appendix attached to this Agreement and referred to herein is not incorporated in this Agreement by reference unless this Agreement expressly otherwise provides. 14.8 Further Action. Each Partner, upon the request of the General Partner, agrees to perform all further acts and execute, acknowledge, and deliver any documents which may be reasonably necessary, appropriate, or desirable to carry out the provisions of this Agreement. 14.9 Variation of Pronouns. All pronouns and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require. 14.10 GOVERNING LAW. THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION OF ITS TERMS, AND THE INTERPRETATION OF THE RIGHTS AND DUTIES OF THE PARTNERS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each Partner hereby irrevocably submits itself to the nonexclusive jurisdiction of any Delaware State court and to the jurisdiction of the United States District Court for the District of Delaware, for the purposes of any suit, action or other proceeding arising out of this Agreement or the subject matter thereof brought by any Partner or the Partnership, respectively, and, to the fullest extent permitted by applicable law, hereby waives, and agrees not to assert, in any suit, action or proceeding, any defense in the nature of a claim of forum non conveniens. Each Partner hereby agrees that service of process in any such proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid to its address specified in Section 2 hereof. 14.11 Waiver of Action for Partition: No Bill For Partnership Accounting. Each Partner irrevocably waives any right that it may have to maintain any action for partition with respect to any of the Partnership Property. To the fullest extent permitted by law, each Partner covenants that it will not (except with the consent of the General Partner) file a bill for Partnership accounting. 14.12 Counterpart Execution. This Agreement may be executed in any number of counterparts with the same effect as if all the Partners had signed the same document. All counterparts shall be construed together and shall constitute one agreement. 14.13 Sole and Absolute Discretion. Except as otherwise provided in this Agreement (including Section 5 hereof), all actions which the General Partner may take and all determinations which the General Partner may make pursuant to this Agreement may be taken and made at the sole and absolute discretion of the General Partner, as the case may be. 14.14 Specific Performance. Each Partner agrees with the other Partners that the other Partners would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and those monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the nonbreaching Partners may be entitled, at law or in equity, the nonbreaching Partners shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof. 14.15 No Material Impairment. No Partner shall take any action that could impair materially such Partner's ability to perform its duties and obligations under this Agreement. 14.16 Duties and Liabilities of Partners. The duties and liabilities of the Partners to each other and to the Partnership are governed by the terms of this Agreement. 14.17 WAIVER OF JURY TRIAL. EACH PARTNER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR SUCH PARTNER'S ENTERING INTO THIS AGREEMENT. IN WITNESS WHEREOF, the parties have entered into this Amended and Restated Agreement of Limited Partnership as of the day first above set forth. [signatures follow on separate pages]
								GENERAL PARTNER: TIFD II INC. By: Eric M. Dull Title: Vice President
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS GENERAL PARTNER.
								LIMITED PARTNERS: TRANSPORTATION & INDUSTRIAL FUNDING CORPORATION By: John M. Breeley Title: Executive Vice President
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS LIMITED PARTNER.
								LIMITED PARTNERS (continued): POTOMAC AIRCRAFT LEASING CORPORATION By: Title:
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AIRCRAFT LEASING ASSOCIATES, L.P. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS LIMITED PARTNER.
SCHEDULE A
AGREED VALUE OF PROPERTY CONTRIBUTED BY TIFD II INC.
1981 Boeing 727-227 (N304AS)								$5,308,663
1981 Boeing 727-227 (N305AS)								$5,308,663
1984 MD82 (N69803)								$18,000,000
1984 MD82 (N16804)								$18,000,000
1988 Boeing 737-300 (N785MA)								$22,563,394
1988 Boeing 737-300 (N784MA)								$22,563,394
1988 Boeing 737-300 (N779MA)								$22,563,394
1988 Boeing 737-300 (N778MA)								$22,563,394
TOTAL								$136,870,902
SCHEDULE A-1
Schedule A Asset Projected Value The projected value for any Schedule A Asset which is the subject of a proposed sale (the "Sale Asset"), shall be calculated at the time of such proposed sale in'accordance with the following formula: PV = ((GPB/.98) + ($5,120,000/.8)+ ABV) * (AGV/RGV) Where: PV = the projected value of the Sale Asset at the time of the proposed sale of such asset; ABV = a value equal to the aggregate current book value (as defined under section 1.704-l(b)(2)(b) of the Regulations) of all Schedule A Assets remaining prior to the proposed sale of the Sale Asset; GPB = a value equal to (i) Investor's remaining invested capital (including accruals of unpaid Investor Guaranteed Payments) at the time of the proposed sale less (ii) the current capital account balance of Investor as of the date of the proposed sale; AGV = the initial Gross Asset Value of the Sale Asset; and RGV = the initial Gross Asset Value of all Schedule A Assets remaining in the Partnership prior to the proposed sale of the Sale Asset. A table of projected values for the Schedule A Assets is attached (for informational purposes only) as Table A-1 attached to this Schedule A-i.
SCHEDULE B LIST OF APPRAISERS
Aircraft Information Services, Inc. Avitas BK Associates Morton Beyer & Associates Jordan Green
SCHEDULE C TERMS AND CONDITIONS OF GECC LOANS
Pursuant to paragraph (d) of the definition of Permitted Investments in Section 1.10 hereof, any GECC Loans shall include terms which do not vary in any material respects from the following:
	GECC covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and interest, if any, on each GECC Loan in accordance with the terms of such GECC Loan.

CERTIFICATE OF INCORPORATION OF AMERICAN ENERGY CORPORATION
The undersigned, for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:
ARTICLE I
The name of the Corporation is AMERICAN ENERGY CORPORATION.
ARTICLE II
The address of the Corporation's registered office in the State of Delaware is 1100 North Market Street, in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is Financial Services (Delaware), Inc.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is:
	To engage in any business approved by the Board of Directors for which corporations may be organized under the General Corporation Law of the State of Delaware.
ARTICLE IV
The Corporation shall have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, with a par value of $1.00 per share. All shares of Common Stock shall be of the same class and carry the same rights and privileges.
ARTICLE V
The name and mailing address of the incorporator is as follows:
	Name William Dana Shapiro	Address 1020 19th Street, N.W. Suite 800 Washington, D.C. 20036
ARTICLE VI
Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.
ARTICLE VII
The Corporation is to have perpetual existence.
ARTICLE VIII
Meetings of stockholders may be held within or without the State of Delaware. The books of the Corporation may be kept (subject to any provisions contained in the Delaware statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
ARTICLE IX
In furtherance and not in limitation of the power conferred upon the Board of Directors by law, the Board of Directors shall have power to adopt, amend, alter and repeal from time to time the By-Laws of the Corporation.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
ARTICLE XI
No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit.
ARTICLE XII
The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware now existing or as such laws may hereafter be amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 4 ^th day of February , 1988.
		/s/ WILLIAM DANA SHAPIRO Incorporator
In the Presence of: /s/ DAVID R. OLIVER,JR.

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

By-Laws

of

American Energy Corporation

(a Delaware corporation)

As adopted
April 4, 1988

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

American Energy Corporation BY-LAWS Article I OFFICES
Section 1. The registered office of American Energy Corporation (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.
	Article II MEETINGS OF SHAREHOLDERS
Section 1. The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the Board) and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article. Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as sha1l be designated in the notice or waiver of notice thereof. Section 3. Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation, or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.
	Article III DIRECTORS
Section 1. The Board of Directors of the Corporation shall consist of two persons. The Directors need not be shareholders. Each Director shall ho1d office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided. Section 2. One member of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, or by these By-Laws, be the acts of the Board of Directors. Section 3. (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. (b) Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof. (c) Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Section 4. (a) As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, un1ess it shall have transacted all such business by written consent pursuant to Section 6 of this Article. (b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine. (c) The Secretary shall give notice to each director of each meeting, inc1uding the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him a t such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. (d) The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. Section 5. Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shal1 give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board. Section 6. Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee. Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. Section 8. The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide. Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
	Article IV INDEMNIFICATION
The Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification of the director, officer, employee or agent is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include expenses (including attorneys' fees), judgment, fines and amounts paid in settlement. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding and the repayment of such advancements will be required only if it shall ultimately be determined that the director, officer, employee or agent who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person for any such expenses to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.
	Article V OFFICERS
Section 1. The Board of Directors, as soon as reasonably practicable after the initial e1ection of directors by shareholders in each year, shall elect a President, shall elect one or more Vice Presidents, a Secretary and a Treasurer, and from time to time may elect such Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person. Section 2. The term of office of all officers shall be unti1 the next succeeding annual election of officers and unti1 t heir respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. Section 3. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.
	Article VI CERTIFICATES OF STOCK
Section 1. The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the date of its issue. Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. Section 3. No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.
Article VII CHECKS, NOTES, CONTRACTS, ETC.
All checks and drafts on the Corporation's bank accounts, bills of exchange , promissory notes, acceptances, ob1igations , other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device , of such officer or agent as the Board of Directors shall authorize. All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary. Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.
	Article VIII FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.
	Article IX AMENDMENTS
Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

JOINT VENTURE PARTNERSHIP AGREEMENT
This Joint Venture Agreement (the "Agreement") is effective this 12 day of MARCH, 1990 by and between American Energy, a division of Potomac Capital Investment Corporation, a Delaware corporation ("AEC"), having its principal place of business at 900 19 ^th Street, N.W., Washington, D.C. 20006, and Incineco, Inc. (U.S.) ("Incineco"), a corporation organized and existing under the laws of Delaware having its principal place of business in the United States at P.O. Box 5432, Bridgeport, Connecticut 06610 (AEC and Incineco being collectively referred to hereinafter as the "Parties"). WHEREAS, except with respect to the municipal solid waste resource recovery project located in Auburn, Maine, Incineco has the exclusive use in the United States, its territories and Canada, of Laurent Bouillet Ingenierie ("Laurent Bouillet") equipment, expertise and technology related to the mass burn of municipal solid waste ("MSW") in resource recovery plants; and WHEREAS, AEC is in the business of the development, design, construction, ownership and operation of MSW resource recovery plants in the United States; and WHEREAS, the Parties desire to form a joint venture for the purposes of marketing, developing, designing, constructing, owning and/or operating MSW resource recovery projects in the United States, its territories and Canada; and WHEREAS, except with respect to the municipal solid waste resource recovery project located in Auburn, Maine, Incineco has granted to the Partnership the exclusive right to market, supply and use the Laurent Bouillet mass burn technology and equipment, including any patent rights or proprietary equipment, processes or designs related thereto, in the United States, its territories and Canada. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE 1 DEFINITIONS
As used herein, the following capitalized words and terms shall have the following meanings, respectively, unless the context clearly requires otherwise: "AEC" means American Energy, a division of Potomac Capital Investment Corporation, a Delaware corporation, and a General Partner in the Partnership. "AEC Development Expenses" means all reasonable and necessary costs and expenses incurred by AEC in supporting the activities of the Partnership, all such costs and expenses to be at cost with no element of profit. "Combustion Chamber" shall mean the oscillating conical kiln (cell) assembly and ancillary equipment for combustion of solid waste including the waste feed system and clinker extraction waste feed hydraulic ramp. "Incineco" shall mean Incineco, Inc. (U.S.), a Delaware corporation and a General Partner in the Partnership. " Joint Venture" shall mean the Partnership. "Laurent Bouillet" means Laurent Bouillet Ingenierie, a French corporation and an affiliate of Incineco. " Incineco Development Expenses" means all reasonable and necessary costs and expenses incurred by Incineco in supporting the activities of the Partnership, except to the extent that they were incurred under or in connection with Article 10 hereof, all such costs and expenses to be at cost with no element of profit, and all such costs and expenses to have been incurred at the request of the Managing Partner and approved by the Managing Partner. "L-B Equipment" means the Laurent Bouillet kiln technology and know-how, including any patent rights and proprietary equipment, processes, designs or Technology related thereto. "Parties" means AEC and Incineco. "Partnership" means the New York general partnership formed pursuant to this Agreement. "Project" shall mean a municipal solid waste resource recovery project which (a) uses mass burn technology; (b) is less than 400 tons per day in total waste processing capacity; and (c) is composed of units of 190 tons or less per processing line per day in waste processing capacity. "Reference Design" shall mean specifications and technical drawings that are generally similar in layout and arrangement and which are sized in waste throughput typical of U.S. applications of the L-B Equipment. "Reimbursements" shall mean those payments to a Party set forth in Section 4.2(b). "Technology" shall mean any trade secrets, know-how or proprietary information, whether or not reduced to writing, including, but not limited to, inventions, whether or not patentable, patent applications, licenses, software, programs, prototypes, designs, analysis codes, discoveries, techniques, methods, ideas, concepts, data, engineering and manufacturing information, procedures, specifications, diagrams, drawings, schematics, blueprints, and parts lists. A grant of an exclusive license of Technology hereunder shall include the right to grant sublicenses only to the extent expressly provided in this Agreement. "Tranquilization Chamber" shall mean the stationary chamber which surrounds the oscillating cell and which receives the combustion gases from the cell and directs them to a heat recovery boiler.
ARTICLE 2 FORMATION OF JOINT VENTURE PARTNERSHIP
2.1 Partnership . The Parties hereby agree to form a general partnership (the "Partnership") under the laws of the State of New York, for the purpose of carrying out their joint undertakings pursuant to this Agreement. AEC and Incineco shall be the General Partners in the Partnership. 2.2 Purpose . The activities of the Partnership shall be limited to those necessary and desirable to the marketing, developing, designing, constructing, owning and/or operating Projects in the United States, its territories and Canada. 2.3 Main Office . The main office of the Partnership shall be at the offices of American Energy, 900 19th Street, N.W., Washington, D.C. 20006. 2.4 Exclusive Joint Venture . Both Parties agree that the Partnership shall be exclusive and that, except for the municipal solid waste resource recovery project located in Auburn, Maine, neither Party may market, develop, design, construct, own or operate Projects as defined herein in the United States, its territories or in Canada except through the Partnership. 2.5 Pre-Existing Relationship . Incineco acknowledges that AEC has a pre-existing relationship with L. & C. Steinmuller GmbH ("Steinmuller") to design, construct, own and/or operate mass burning facilities of more than 200 tons per processing line per day in waste processing capacity and that the formation and operation of the Partnership shall not interfere with AEC's relationship with Steinmuller.
ARTICLE 3 CAPITAL CONTRIBUTIONS
3.1 Initial Capital Contributions . Upon formation of the Partnership, the Parties shall make initial capital contributions to the Partnership in the following amounts: AEC shall contribute fifty dollars ($50.00) (fifty percent (50%) of the initial capital of the Partnership) and Incineco shall contribute fifty dollars ($50.00) (fifty percent (50%) of the initial capital of the Partnership). 3.2 Capital Accounts . Upon the Partnership's receipt of the initial capital contributions by AEC and Incineco, a capital account shall be established and maintained for each Partner, in accordance with the requirements of United States tax laws.
ARTICLE 4 PROFITS, LOSSES AND CASH FLOWS
4.1 Allocation of Profits and Losses . Profits and losses shall be allocated equally to each Partner and shall be calculated according to generally accepted accounting principles in the United States. 4.2 Distribution of Cash Flow . (a) All cash flow received by the Partnership, whether from the Projects, other Partnership activities, Partnership investments or insurance proceeds, shall be utilized as follows: (i) First, to make Reimbursements, as defined herein, in the order provided in Section 4.2(b); (ii) Second, to finance the ongoing activities of the Partnership in accordance with the budget approved by the management Committee and to make payments under any operating contract to the extent approved by the Management Committee; and (iii) Third, the remaining amount to be distributed in equal shares to each Partner, such distributions to be made not less than one time in each year. (b) "Reimbursements" shall mean the following: payments to a Party or Parties in accordance with the requirements of this Agreement, which Reimbursements shall be made from cash flow received by the Partnership and shall be made from available cash flow in the following order of priority: (i) First, to pay the Development/Credit Enhancement Fee set forth in Article 12 to AEC and to reimburse Incineco for the value of the existing drawings, specifications and studies in accordance with the schedule set forth in Article 9, both to the extent that any such payments have not been paid at the time of closing of permanent project financing for each Project; (ii) Second, to reimburse AEC for any AEC Development Expenses and Incineco for any Incineco Development Expenses, both to the extent not yet reimbursed; (iii) Third, to reimburse AEC and Incineco for any payments made pursuant to the terms of the Guarantees provided pursuant to Article 11 hereof; and (iv) Fourth, to reimburse AEC and Incineco for any amounts expended to correct the operating deficiencies of any Project as set forth in Article 13; provided, however, that if there is not sufficient cash flow available to make full payment to both Parties under any one of these four priority categories, then the available cash flow shall be allocated between the Parties in the same ratio as then exists between the Parties' then outstanding, non-reimbursed expenditures under that priority category.
ARTICLE 5 DEVELOPMENT EXPENSES
5.1 Development Expenses . (a) AEC shall fund all reasonable and necessary development expenses, including all payments to third parties other than the Parties hereto, and the salaries and overhead of the personnel working for the Partnership. When the Partnership receives cash flow, AEC will propose to the Management Committee a reasonable sum to be expended from said cash flow for the purpose of funding future development expenses. 5.2 Reimbursement of AEC Development Expenses . The Partnership shall reimburse AEC, to the extent possible, for all AEC Development Expenses at the time of closing of permanent project financing for each Project. 5.3 Reimbursement of Incineco Development Expenses . The Partnership shall reimburse Incineco, to the extent possible, for all Incineco Development Expenses at the time of closing of permanent project financing for each Project.
ARTICLE 6 MANAGEMENT
6.1 Management Committee . The Partnership shall be managed by a Management Committee that shall meet at least four times each year to oversee the activities of the Partnership. Each Party shall appoint two members to the Management Committee. 6.2 Managing Partner . AEC shall be the Managing Partner and shall manage and control the day-to-day business of the Partnership. 6.3 Obligations of the Managing Partner . The Managing Partner shall: (a) Fund all reasonable and necessary development expenses in accordance with Section 5.1 hereof; (b) Provide all personnel required for Partnership activities, which shall include at least one engineer and one business development person, at cost with no element of profit; (c) Provide office space and support services to the Partnership, at cost with no element of profit; (d) Prepare and submit to the Management Committee for approval an annual Business Plan, which shall include a budget for development expenses and financial projections for the Partnership; and (e) Prepare and provide to Incineco (i) semiannual unaudited financial statements for the Partnership and progress reports on the status of each Project, (ii) annual independent audited financial statements, and (iii) any tax returns or other filings required to be made by or on behalf of the Partnership.
ARTICLE 7 BIDS
7.1 Schedule of Bids . The Parties agree that the Partnership shall bid on: (a) at least four Projects during each of the first two calendar years after the effective date of this Agreement; and (b) thereafter, at least six Projects in each calendar year; both (a) and (b) herein subject to the condition that Projects not exceeding 400 tons a day in size are available to be bid. 7.2 Participation of Parties . AEC, in consultation with Incineco, shall determine which Projects the Partnership will bid on and what the bid price and other terms shall be. Incineco and AEC shall provide all services necessary to support the Partnership in the bidding of Projects, and all costs and expenses they may incur in doing so shall constitute Incineco Development Expenses and AEC Development Expenses respectively.
ARTICLE 8 OTHER OBLIGATIONS OF THE PARTIES
8.1 Incineco Equipment . (a) Incineco represents and warrants that it has, and covenants that it will continue to have throughout the term of this Agreement, except with respect to the municipal solid waste resource recovery project located in Auburn, Maine, (i) the sole and exclusive license for all L-B Equipment and all Technology related thereto in the United States, its territories, and Canada; (ii) the right and authority to place in the Partnership the exclusive rights to the L-B Equipment and all Technology related thereto in the United States, its territories, and Canada; and (iii) the right and authority to grant to the Partnership the right and authority to transfer the L-B Equipment and all Technology related thereto, or any portion thereof on a non-exclusive basis to purchasers and users of the same in a Project; all without accounting to or obtaining the permission of any third party. Upon execution of this Agreement, Incineco shall provide to AEC and the Partnership the Warranty of Laurent Bouillet in the form attached as Exhibit 2 hereto. (b) In consideration of the undertakings of AEC herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Incineco does hereby transfer and grant to the Partnership, except with respect to the municipal solid waste resource recovery project located in Auburn, Maine, the sole and exclusive license for all L-B Equipment and all Technology related thereto in the United States, its territories and Canada, including the right to transfer a sublicense on a non-exclusive basis for all or any portion of the L-B Equipment and all Technology related thereto as may be required for a Project. In connection with this grant, Incineco hereby transfers to the Partnership all of its right, title and interest in those certain existing drawings, engineering specifications and environmental studies listed in Exhibit 1 hereto. (c) Incineco shall provide design and engineering services for the L-B Equipment at cost, with no element of profit. AEC shall procure all equipment specified by the L-B Equipment designs. The cost incurred by each Party under this Section 8.1 shall constitute Incineco Development Expenses or AEC Development Expenses, as appropriate. 8.2 Reference Designs . The Parties recognize and agree that: (a) in order to pursue the business of the Joint Venture, Reference Designs, at least for the combustion chamber, shall be necessary; (b) the Parties shall proceed diligently to develop and complete such Reference Designs; and (c) some of these Reference Designs already exist and are described in Article 9. Except as otherwise specifically provided in Article 9, the costs incurred by each Party under this Section 8.2 shall constitute Incineco Development Expenses or AEC Development Expenses, as appropriate.
ARTICLE 9 EXISTING DRAWINGS, ENGINEERING SPECIFICATIONS AND ENVIRONMENTAL STUDIES
9.1 Cost of Existing Drawings, Specifications and Studies . The Parties agree that the United States standard drawings, engineering specifications and environmental studies for the L-B Equipment listed in Exhibit 1 hereto, which were developed by Incineco and given to the Partnership, have a total value of $500,000. 9.2 Reimbursement of Value . The $500,000 value of the material described in Section 9.1 shall be reimbursed to Incineco as a Incineco Development, Expense over the first five Projects for which a permanent project financing is closed, at the rate of $100,000 per Project.
ARTICLE 10 COMBUSTION CHAMBER
10.1 Supply of Combustion Chamber . (a) Incineco shall have the right to supply to the Partnership the Combustion Chamber, including the Tranquilization Chamber, for the Projects, provided that the cost and quality of such equipment as delivered to the Project site, including all shipping, handling and tariffs, is competitive with the cost and quality of comparable equipment that can be purchased in the United States or elsewhere. (b) Incineco shall provide to the Partnership guarantees customary for equipment vendors for any equipment it supplies to the Projects, including but not limited to required performance guarantees. Such guarantees shall include a promise to repair or replace any equipment supplied for a period of two years following commercial operation, at no cost to the Partnership, but shall not include any penalty or liquidated damage for failure to process waste or to produce electricity. Notwithstanding any other provision of this Agreement, any costs or expenses incurred by Incineco pursuant to this Section 10.1(b) shall not be reimbursed by the Partnership. 10.2 Qualified Vendors . The Parties recognize the need to locate qualified vendors in the United States and elsewhere for the supply of the Combustion Chamber and agree to work diligently together to qualify appropriate vendors for the manufacture of such equipment in the United States, its territories, Canada and South America in order that such equipment can be supplied at the required quality and at the most economical price.
ARTICLE 11 FINANCIAL GUARANTEES
AEC shall provide such financial guarantees as may be required in connection with the Projects, including liquidated or other consequential damages, provided, however, that AEC may decline to provide any financial guarantee that is unreasonable in its sole judgement.
ARTICLE 12 DEVELOPMENT/CREDIT ENHANCEMENT FEE
For its services as Managing Partner and for providing the guarantees as set forth in Article 11, if any, AEC shall be paid a Development/Credit Enhancement Fee at the time of closing of permanent project financing for each Project, in the amount of two percent (2%) of the total cost of each Project.
ARTICLE 13 PROJECT OPERATING DEFICIENCIES
If a Project is not operating in accordance with its approved plans and specifications, both Parties shall use their best efforts promptly to make such repairs, replacements or improvements as may be required to cause it to meet its approved plans and specifications, without regard to either Party's views as to who may be responsible for such failure. Any costs or expenses of either Party not paid shall be reimbursed by the Partnership pursuant to Section 4.2(b)(iv).
ARTICLE 14 INDEMNIFICATION
14.1 General Indemnification . Each Party shall indemnify the other Party and the Partnership against any and all claims, actions, costs, expenses, damages and liabilities, including reasonable attorneys' fees, arising out of or in connection with the gross negligence or willful misconduct of the Party, its employees or other agents in the performance of the activities of the Partnership. 14.2 Survival of Indemnification Obligation . The duty to indemnify shall survive expiration or termination of this Agreement with respect to any claims based on facts or conditions which occurred prior to termination.
ARTICLE 15 RESTRICTIONS ON TRANSFER OF PARTNERSHIP INTERESTS
Neither Party shall sell, transfer, assign, pledge, hypothecate or otherwise dispose of or encumber its interest in the Partnership without the express written consent of the other Party.
ARTICLE 16 TERM AND TERMINATION
16.1 Term . The Joint Venture shall continue its existence without interruption for a period of fifteen (15) years unless terminated earlier as set forth in Section 16.2 hereof. 16.2 Termination . The Joint Venture may be terminated by either Party upon: (a) written notice by either Party delivered to the other Party at least two years in advance of the proposed date of termination, provided such termination shall not occur sooner than fifteen years after the date of this Agreement; or (b) written notice by either Party three years from the effective date of this Agreement if, at that time, the Joint Venture has not received a signed order for at least one Project; or (c) written notice by either Party five years from the effective date of this Agreement if, at that time, the Joint Venture has not started construction on at least one Project; or (d) Upon an Event of Default in accordance with Article 17. 16.3 Division of Assets . Upon termination, the Parties shall immediately dissolve the Partnership and liquidate all assets of the Partnership. To the extent permitted by law, the proceeds from the liquidation of the assets and any remaining assets of the Partnership shall be distributed as follows: (a) the expenses of liquidation (including the expenses of the Parties after the date of dissolution, and legal and accounting fees and expenses reasonably incurred in connection with the liquidation) and the debts of the Partnership other than debts to Parties or any affiliated entities shall first be paid; (b) such debts, if any, as are duly owing to the Parties or their affiliated entities shall next be paid; and (c) the balance, if any, shall be distributed to the Partners in accordance with their capital accounts and so as to satisfy the requirements of the "substantial economic effect" test for tax purposes. Immediately upon termination and without any further act or deed, the license by Incineco to the Partnership of the L-B Equipment (including all Technology related hereto) and all other property otherwise licensed to the Partnership at any time prior to the liquidation of the Partnership, shall terminate insofar as said license relates to Projects commencing after the liquidation of the Partnership; provided, however, that this termination shall have no effect whatsoever upon the rights of the Partnership or the Parties, or any sublicensee thereof, with respect to Projects commenced during the term of the Partnership, all of which rights shall remain valid and enforceable as if the said license had continued in full force and effect. For purposes of the Agreement, all property (including rights thereto) transferred to the Partnership, except for the initial cash contributions provided for in Section 3.1 of this Agreement, shall be deemed as being licensed to the Partnership for purposes of this Section and the rights of Incineco to such property upon termination and liquidation shall be as provided in the preceding sentence. In addition, upon termination, the Partnership shall distribute to both Parties a joint and several interest in and to all patents and Technology jointly developed with respect to the L-B Equipment during the term of this Agreement; future use by or sublicensing of said patents or Technology by either Party will be subject to a licensing agreement and fee to be negotiated by the Parties in good faith.
ARTICLE 17 EVENTS OF DEFAULT AND REMEDIES
17.1 Events of Default . Each of the following events or conditions shall constitute an Event of Default under this Agreement: (a) failure by a Party to perform any of its material duties or obligations under this Agreement; or (b) (i) institution by a Party of a voluntary petition of bankruptcy or for reorganization, or the consent of a Party to the filing of a proceeding in bankruptcy or for reorganization, if such petition or proceeding is not dismissed within forty-five (45) days, or (ii) an adjudication of bankruptcy or insolvency of a Party and such adjudication if not vacated within forty-five (45) days, or (iii) a receiver or trustee is appointed for a Party and such appointment is not vacated within forty-five (45) days, or (iv) a Party makes an assignment for the benefit of its creditors. 17.2 Remedies . Upon the occurrence of an Event of Default by one Party, the other Party may terminate this Agreement upon thirty (30) days written notice.
ARTICLE 18 DISPUTES, GOVERNING LAW
18.1 Disputes . Any dispute or disagreement under this Agreement shall first be presented to the Management Committee so that the disagreement or dispute can be resolved mutually prior to other action. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, which cannot be resolved mutually by the Parties, shall be settled by arbitration in accordance with the rules of the American Arbitration Association. Three arbitrators shall be appointed according to such rules. Judgment upon the award shall be final and binding and may be entered in any court having jurisdiction thereof. 18.2 Governing Law . This Agreement shall be interpreted in accordance with and governed by the laws of the United States, as applicable, and the State of New York.
ARTICLE 19 GENERAL
19.1 Notices . Notices and other communications required hereunder shall be in writing and shall be deemed to have been properly given if delivered personally with receipt acknowledged or if mailed by certified mail, return receipt requested, or if transmitted by telex, telecopy or other like method, with confirmation of receipt, to the addresses below unless specifically directed otherwise in advance of notice. All notices shall be deemed effective upon date of receipt or refusal of delivery (if refused). To AEC: American Energy 900 19th Street, N.W. Washington, D.C. 20006 Attn: William J. Sim, President To Incineco: Incineco, Inc. P.O. Box 5432 Bridgeport, Connecticut 06610 Attn: President 19.2 Force Majeure . Neither Party shall be liable for damages due to delay (other than failure to make any required payments) which is caused by circumstances beyond its reasonable control. 19.3 Currency . All currency in this Agreement is expressed in U.S. dollars and all payments under this Agreement shall be made in U.S. dollars. 19.4 Severability . If a court or arbitral panel should find that any of the provisions of this Agreement are invalid or unenforceable, the validity or enforceability of the remaining provisions of this Agreement shall not be affected unless the underlying intent or sense of this Agreement is substantially undermined by such invalidity or unenforceability. In the event any provision is held invalid or unenforceable, the Parties shall use their best efforts to agree upon a valid and enforceable substitute provision, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 19.5 Headings . Headings and titles used herein are for convenience of reference only and shall not control the construction or interpretation of any provision hereof. 19.6 Time for Performance . Whenever the day or last day of a period for performance of any act is not a business day at the place of such performance, the time for the performance of such act shall be the first following business day. 19.7 Waiver . The failure of either Party to insist upon the performance of any of the terms, covenants, conditions or provisions of this Agreement shall not be considered a waiver or relinquishment of future compliance therewith; nor shall a waiver by either Party of any breach of any term, covenant, condition, agreement or provision, operate as A waiver of any other term, covenant, condition, agreement or provision. 19.8 Counterparts . This Agreement may be executed in one or more counterparts all of which shall be considered one and the same agreement and each of which shall be deemed an original. 19.9 Non-Assignability . The rights granted to or obligations imposed upon the Parties under this Agreement shall not be assignable, or otherwise delegable, transferable, or subject to encumbrance in any manner or degree to or in favor of any person or for any purpose by any act of either Party or by operation of law or otherwise, without the prior written consent of the other Party. Any other attempt to assign, delegate, transfer or encumber such rights or duties, absent the other Party's prior written consent, shall be void and of no force and effect. 19.10 Entire Agreement/modification . The Parties acknowledge that they have read this Agreement, understand it and agree to be bound by its terms and conditions. The Parties also agree that this Agreement contains the entire understanding and agreement of the Parties hereto with respect to the subject matters contained herein, supersedes all prior oral or written understandings and agreements relating thereto except as expressly otherwise provided, and may not be altered, modified or waived in whole or in part, except in writing, signed by duly authorized representatives of the Parties hereto. 19.11 Confidentiality . The Parties agree that all Technology and all other information marked "confidential" or the like which is furnished by the Parties to the Partnership hereunder (hereinafter, "Confidential information") is for the Partnership's (and not the Parties') own use in connection with the performance of this Agreement and is to be kept strictly confidential by the Partnership. Confidential Information is not to be given, sold or disclosed by the Partnership to any other party without the prior written consent of the disclosing party. AEC, as the Managing Partner of the Partnership, agrees to cause the Partnership to use its best commercially reasonable efforts to maintain the confidentiality of the Confidential Information disclosed to it in the manner presented herein. The Partnership shall disclose Confidential Information only to its officers and employees whose duties reasonably require familiarity with such information. Except as otherwise agreed by the Parties, the Partnership shall be required, at its own expense, to take such legal actions as may be reasonably necessary to enforce such undertakings. The confidentiality obligation of the Partnership under the above paragraph shall not apply to Confidential Information which: (a) Is or becomes publicly known through no wrongful act of the Partnership or its employees; (b) Is received by the Partnership without restriction from a third party without breach of any obligation of nondisclosure; (c) Is or has been independently developed by the Partnership as shown to the satisfaction of the disclosing party by written records; (d) Is contained in any published patent or published patent application or which becomes published or otherwise generally known to the Partnership through no wrongful act of the Partnership, from and after the date it becomes published or generally known; or (e) Is disclosed pursuant to governmental or judicial requirement. All obligations of the Parties with respect to confidentiality, as provided in this Agreement, shall survive the termination of this Agreement. American Energy, a division Incineco, Inc. (U.S.) of Potomac Capital Investment Corporation By: /s/ William Sim By: /s/ Its: President Its: President Attest: /s/ William Shapiro Attest: /s/ John Gardner Secretary Secretary and Treasurer
EXHIBIT 1
· CERCHAR Environmental Report for the Montauban Plant dated Februarv/March 1987. · Combustion calculation software for the oscillating kiln design. · Combustor engineering diagrams for the following combustor sizes: LB Capacity Drawing Tons/Day Number 50 1050018 75 1075028 100 1100037 125 1125046 150 1150056 200 1200075 225 1225084 250 1250093 · Fabrication details and subassembly drawings which compliment the "engineering diagrams". · Combustion cell and tranquillization chamber engineering sizing software. · U.S. engineering and procurement specifications for major plant equipment and systems. · Plant cost estimating data base. · CAD software for preparation of combustion system arrangement drawings.
EXHIBIT 2 WARRANTY AGREEMENT
This WARRANTY AGREEMENT, dated as of 12 of March , 1990, between and among Laurent Bouillet Ingenierie, a French corporation ("LBI"), American Energy, a division of Potomac Capital Investment Corporation, a Delaware corporation ("AEC"), and the Joint Venture Partnership between American Energy and Incineco, Inc. (U.S.) a New York General Partnership (the "Partnership"). WHEREAS, Incineco Inc. (U.S.) ("Incineco") is an affiliate of LBI which is in the business of supplying and marketing LBI's equipment and expertise in the area of mass burn technology for municipal solid waste resource recovery plants in the United States, its territories and Canada; and WHEREAS, Incineco has this day entered a Joint Venture Partnership Agreement with AEC (the "Agreement"), pursuant to which Incineco and AEC shall market, develop, design, construct, own and/or operate municipal solid waste resource recovery plants in the United States, its territories and Canada; and WHEREAS, as an inducement for AEC to enter into the Agreement, AEC desires that LBI enter into this Warranty Agreement and LBI has agreed to do so. NOW, THEREFORE, in consideration of the foregoing premises and of other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties hereto agree as follows: SECTION 1. Warranty. (a) LBI hereby unconditionally and irrevocably warrants to AEC and the Partnership the due and punctual performance of all obligations of Incineco under Sections 7.2 and 8.1 and Article 13 of the Agreement, including the incurrence of costs or expenses as required thereby (the "Specified Obligations"); and hereby agrees that in the event that Incineco shall fail to perform any such Specified Obligations, LBI will forthwith perform any such Specified Obligations on behalf of and in satisfaction of the obligations of Incineco. LBI is entitled to all benefits, limitations and defenses afforded Incineco in the Agreement. (b) This Warranty Agreement shall be a continuing, absolute and unconditional warranty of performance as aforesaid and shall remain in full force and effect until the obligations of Incineco under the Agreement shall have been fully discharged in accordance with the terms and provisions thereof and LBI shall have performed all obligations required to be made by it hereunder. SECTION 2. Consent to Jurisdiction. This Warranty Agreement shall be governed by the laws of the State of New York. LBI hereby accepts and submits to the jurisdiction of the courts of the United States and the State of New York concerning any suit, action or proceeding with respect to this Warranty Agreement. LBI agrees to accept service of any and all legal process, summons, notices and documents which may be served in any suit, action or proceeding with respect to this Warranty Agreement by the mailing of copies thereof by registered or certified mail, postage prepaid, to the President of LBI at 3 Place Renault, 925 Rueil-Malmaison, France. LBI further agrees that this Warranty Agreement and any judgment by a court of the United States and of the State of New York shall be binding upon and enforceable against the successor, assigns, agents and legal representatives of LBI, and may be presented, without more, for enforcement against LBI in any court in France. SECTION 3. Miscellaneous. (a) This Warranty Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto. (b) No delay or failure to exercise any right granted hereunder shall impair such right or shall be construed to be a waiver thereof. Any amendment or modification of this Warranty Agreement and any waiver of any right arising hereunder shall be in writing. IN WITNESS WHEREOF, the parties hereto have executed this Warranty Agreement as of the date first above written.
	LAURENT BOUILLET INGENIERIE By Title: President Date March 12, 1990 AMERICAN ENERGY By /s/ William Sim Title: President Date March 12, 1990 INCINECO, INC. (U.S.) By Title: President Date March 12, 1990

CERTIFICATE OF FORMATION OF AMP FUNDING, L.L.C.
This Certificate of Formation of AMP Funding, L.L.C. (the "LLC') dated November 13, 1995, is being duly executed and filed by GARY R.CORRELL an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del C. Section 18-101, et seq . FIRST: The name and address of the LLC formed hereby is:
	AMP Funding, L L.C. 1575 Delucchi Lane Suite 115 Reno, Nevada 99502
SECOND: The address of the registered office of the LLC in the State of Delaware is
	Corporation Trust Center 1209 Orange Street Wilmington, Delaware 19801
THIRD: The name and address of the registered agent for service of process on the LLC in the State of Delaware is
	The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19901
IN WITNESS WHEREOF. the undersigned has executed this Certificate of Formation as of the date first above written.
		By: /s/ GARY R. CORRELL Name: Gary R. Correll Title: Executive Manager
		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 10:30 AM 11/13/1995 950262139 - 2561189

CERTIFICATE OF AMENDMENT OF AMP FUNDING, L.L.C. A LIMITED LIABILITY COMPANY FIRST: The name of the limited liability company is:
	AMP FUNDING, L.L.C.
SECOND: The Certificate of Formation of the limited liability company is hereby amended as follows:
	The address of the registered office of the limited liability company in Delaware is: 1013 Centre Road, in the City of Wilmington, County of New Castle. The name of the registered agent at that address is: Corporation Service Company
IN WITNESS WHEREOF, the undersigned, has executed, signed and acknowledged this Certificate of Amendment this .23rd day of May, A.D. 1997. Executive Manager /s/ GARY R. CORRELL Authorized Person Name: Gary R. Correl

CERTIFICATE OF AMENDMENT

AMP FUNDING, L.L.C.

A LIMITED LIABILITY COMPANY

FIRST: The name of the limited liability company is:

AMP FUNDING, L.L.C.

SECOND: The Certificate of Formation of the limited liability company is hereby amended as follows:

"Its registered office in the State of Delaware is to be located at 1013 Centre Road, in the City of Wilmington, County of New Castle, 19805, and its registered agent at such address is Corporation Service Company."

IN WITNESS WHEREOF, the undersigned, has executed, signed and acknowledged this Certificate of Amendment this 23 ^RD day of June .D. 1997.

/s/ LESLIE C. ZIMBERG
Authorized Person

STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM   04/19/1999
991153652 - 2561189

CERTIFICATE TO RESTORE TO GOOD STANDING

A DELAWARE LIMITED LIABILITY COMPANY

PURSUANT TO TITLE 6, SEC. 18-1107

1. Name of Limited Liability Company:

AMP FUNDING,L.L.C.

2. Date of original filing With Delaware Secretary of State:

NOVEMBER 13, 1995

I, John D. McCallum , Authorized Person of the above named limited liability company do hereby certify that this limited liability company is paying all annual taxes, penalties and interest due to the State of Delaware.

I do hereby request this limited liability company be restored to Good Standing,

/s/ JOHN D. McCALLUM
Authorized Person

           John D.McCallum
Type Name

EXECUTION COPY

_________________________________

OPERATING AGREEMENT

OF

AMP FUNDING, L.L.C.

__________________________________

	TABLE OF CONTENTS
	SECTION 1 THE COMPANY	1
1.1	Formation	1
1.2	Name	1
1.3	Purpose; Powers	2
1.4	Principal Place of Business	2
1.5	Term	3
1.6	Filings, Agent for Service of Process	3
1.7	Title to Property	4
1.8	Payments of Individual Obligations	4
1.9	Independent Activities; Transactions with Affiliates	4
1.10	Definitions	5
	SECTION 2 MEMBERS' SHARES AND CAPITAL CONTRIBUTIONS	14
2.1	Member Shares; Original Contributions	14
2.2	Assumption Agreements	15
2.3	Additional Contributions	16
	SECTION 3 DISTRIBUTIONS	17
3.1	Priority	17
3.2	Preferred Share Distributions	18
3.3	Common Share Distributions	20
3.4	Redemptions	21
3.5	Determination of Fair Market Value	23
3.6	Distributions and Payments to Members	24
	SECTION 4 MANAGEMENT	24
4.1	Managers	24
4.2	Term	25
4.3	Removal	26
4.4	Management Committee	26
4.5	Meetings of the Management Committee	26
4.6	Management Committee Powers	27
4.7	Duties and Obligations of the Management Committee	30
4.8	Compensation; Expenses	31
4.9	Indemnification of the Managers	31
	SECTION 5 ROLE OF MEMBERS	32
5.1	Rights or Powers	32
5.2	Voting Rights	32
5.3	Meetings and Consents of the Members	33
5.4	Procedure for Consent	33
5.5	Required Member Consents	34
5.6	Members' Liability	35
5.7	Partition	35
5.8	Transactions Between a Member or Manager and the Company	36
5.9	Other Instruments	36
	SECTION 6 REPRESENTATIONS AND WARRANTIES	36
6.1	In General	36
6.2	Representations and Warranties	36
6.3	Additional Representations, Warranties and Covenants by AM-BT	39
6.4	Limitation on Damages for Breach of Representations or Warranties/Damage Payments	39
	SECTION 7 ACCOUNTING,.BOOKS AND RECORDS	40
7.1	Accounting, Books and Records	40
7.2	Reports	41
	SECTION 8 AMENDMENTS	41
8.1	Amendments	41
	SECTION 9 TRANSFERS	42
9.1	Sale of Shares	42
9.2	Legend	42
9.3	Notice of Proposed Transfer	43
9.4	Termination of Restrictions	43
9.5	Compliance with Rule 144 and Rule 144A	44
9.6	Non-Applicability of Restrictions on Transfer	44
9.7	Rights of Unadmitted Assignees	45
9.8	Admission of Substituted Members	45
9.9	Effect of Transfer on Company	46
	SECTION 10 POWER OF ATTORNEY	46
10.1	Managers as Attorneys-In-Fact	46
10.2	Nature of Special Power	47
	SECTION 11 DISSOLUTION AND WINDING UP	47
11.1	Dissolution Events	47
11.2	Winding Up	48
11.3	Rights of Members	49
11.4	Notice of Dissolution/Termination	50
11.5	The Liquidator	50
11.6	Form of Liquidating Distributions	50
11.7	Optional Liquidation Events/Purchase Option	51
	SECTION 12 MISCELLANEOUS	53
12.1	Notices	53
12.2	Binding Effect	54
12.3	Certificates of Shares	54
12.4	Lost Certificates	54
12.5	Construction	55
12.6	Time	55
12.7	Headings	55
12.8	Severability	55
12.9	Incorporation by Reference	55
12.10	Variation of Terms	55
12.11	Governing Law	56
12.12	Waiver of Jury Trial	56
12.13	Counterpart Execution	56
12.14	Specific Performance	56
12.15	Engagement in Holding Company Eligible Activities and Investment in Holding Company Eligible Assets	56
12.16	No Material Impairment	57

EXHIBITS
Exhibit A -	Aircraft Lease Documents
Exhibit B -	Company Assignment and Assumption Agreement
Exhibit C -	Company Contribution Agreement
Exhibit D -	Funding Agreement
Exhibit E -	Guaranty of Obligations
Exhibit F -	PCI Assig1nment and Assumption Agreement
Exhibit G -	PCI Contribution Agreement
Exhibit H -	PCI Note

OPERATING AGREEMENT

OF

AMP FUNDING, L.L.C.

This OPERATING AGREEMENT is entered into and shall be effective as of the 13 ^th day of November, 1995, by and among the Persons who are identified as Members in Section 2.1 hereto and who have executed a counterpart of this Agreement as Members pursuant to the provisions of the Act as well as the Persons who are identified as Managers in Section 4.1 hereto and who have executed a counterpart of this Agreement as Managers, on the following terms and conditions:

SECTION 1

THE COMPANY

1.1 Formation.

The Members hereby agree to form the Company as a limited liability company under and pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. The fact that the Certificate is on file in the office of the Secretary of State, State of Delaware, shall constitute notice that the Company is a limited liability company. Simultaneously with the execution of this Agreement and the formation of the Company, each of the Members shall be admitted as members of the Company and each of the Managers shall be admitted as managers of the Company. The rights and liabilities of the Members and Managers shall be as provided under the Act, the Certificate and this Operating Agreement. The Members intend that the Company be taxed as an association taxable as a corporation for federal income tax purposes.

1.2 Name.

The name of the Company shall be AMP Funding, L.L.C. and all business of the Company shall be conducted in such name. The Management Committee may change the name of the Company upon ten (10) Business Days notice to the Members.

1.3 Purpose; Powers.

(a) The purposes of the Company are to:

(i) Acquire the Leased Aircraft and the AIMC Stock contributed to the Company by PCI pursuant to Section 2.1 hereof,

(ii) Acquire an interest as a member in RAMP Investments ultimately representing up to 97% of the capital of RAMP Investments;

(iii) Transfer to RAMP Investments (A) the Leased Aircraft, (B) the AIMC Stock and (C) cash;

(iv) Assume the obligations of PCI under the PCJL Notes, assign such obligations to RAMP Investments, and guarantee the obligations of RAMP Investments under the PCJL Notes;

(v) Perform such other activities as are specifically provided in this Operating Agreement or otherwise as the Members may unanimously agree; and

(vi) To engage in any activity and to exercise any powers permitted to limited liability companies under the laws of the State of Delaware which are necessary or incidental to the foregoing; provided that any asset acquired, investment made or activity engaged in by the Company shall be Holding Company Eligible.

(b) In no event shall the Company accept demand deposits, including, without limitation, demand deposits that the depositor may withdraw by check or similar means for payment to third parties.

(c) The Company has the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to and in furtherance of the purposes of the Company set forth in this Section 1.3 and has, without limitation, any and all powers that may be exercised on behalf of the Company by the Management Committee or any Manager pursuant to Section 4 hereof.

1.4 Principal Place of Business.

The principal place of business of the Company shall be at 1575 Delucchi Lane, Suite 115, Reno, Nevada 89502. The Management Committee may change the principal place of business of the Company to any other place within or without the State of Nevada with the consent of the Members. The registered office of the Company in the State of Delaware is initially located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

1.5 Term.

The term of the Company shall commence on the date the Certificate is filed in the office of the Secretary of State of the State of Delaware in accordance with the Act. The Members intend that the existence of the Company shall continue until the dissolution and the completion of the winding up of the Company and its business is completed following a Dissolution Event, as provided in Section 11 hereof. Prior to the time that the Certificate is filed, no Person shall represent to third parties the existence of the Company or hold itself out as a Member or Manager.

1.6 Filings; Agent for Service of Process.

(a) Each Manager is hereby authorized to and shall execute and cause the Certificate to be filed in the office of the Secretary of State of the State of Delaware as an authorized person within the meaning of the Act. The Management Committee shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware, including the preparation and filing of such amendments to the Certificate and such other assumed name certificates, documents, instruments and publications as may be required by law, including, without limitation, action to reflect:

(i) A change in the Company name; or

(ii) A correction of false or erroneous statements in the Certificate or the desire of the Members to make a change in an y statement therein in order that it shall accurately represent the agreement among the Members.

(b) The Members and the Management Committee shall execute and cause to be filed original or amended certificates and shall 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 or similar type of entity under the laws of any other jurisdictions in which the Company engages in business.

(c) The registered agent for service of process on the Company in the State of Delaware shall be The Corporation Trust Company or any successor as appointed by the Members in accordance with the Act.

(d) Upon the dissolution and completion of the winding up of the Company in accordance with Section 11, the Liquidator, as an authorized person within the meaning of the Act, shall promptly execute and cause to be filed a Certificate of Cancellation in accordance with the Act and the laws of any other jurisdictions in which the Liquidator deems such filing necessary or advisable.

1.7 Title to Property .

All Property owned by the Company shall be owned by the Company as an entity and no Member shall have any ownership interest in such Property in its individual name, and each Member's interest in the Company shall be personal property for all purposes. At all times after the Effective Date, the Company shall hold title to all of its Property in the name of the Company and not in the name of any Member.

1.8 Payments of Individual Obligations.

The Company's credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be transferred or encumbered for, or in payment of, any individual obligation of any Member.

1.9 Independent Activities; Transactions with Affiliates.

(a) Each Manager shall be required to devote such time to the affairs of the Company as may be necessary to manage and operate the Company and its Subsidiaries, and shall be free to serve any other Person or enterprise in any capacity that such Manager may deem appropriate in his, her or its discretion.

(b) Insofar as permitted by applicable law, neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Member or Manager or their Affiliates from engaging in whatever activities they choose, whether the same are competitive with the Company or otherwise, and any such activities may be undertaken without having or incurring any obligation to offer any interest in such activities to the Company or any Member, or require any Member or Manager to permit the Company or any other Manager or Member or its Affiliates to participate in any such activities, and as a material part of the consideration for the execution of this Agreement by each Member, each Member and Manager hereby waives, relinquishes, and renounces any such right or claim of participation.

(c) To the extent permitted by applicable law and subject to the provisions of this Agreement, in furtherance of the purposes of the Company set forth in Section 1.3, the Management Committee is hereby authorized to cause the Company to purchase property (whether real, personal or mixed) from, sell such property to or otherwise deal with any Member or Manager, acting on its own behalf, or any Affiliate of any Member or Manager; provided that any such purchase, sale or other transaction shall be made on terms and conditions which are no less favorable to the Company than if the sale, purchase or other transaction had been made with an independent third party.

(d) The Members hereby agree that the transactions evidenced by the Contribution Agreements, the Assumption Agreements, the RAMP Investments Operating Agreement, the Guaranty of Obligations and the Aircraft Lease Documents satisfy the standard set forth in Section 1.9(c) hereof and specifically authorize the Managers to enter into said agreements, all without any further action, consent, or approval of any other Person.

(e) Each Member and Manager and any Affiliate thereof may also lend money to, borrow money from, act as a surety, guarantor or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, and transact other business with the Company and, subject to other applicable law, has the same rights and obligations with respect thereto as a Person who is not a Member. If a Member, Manager or any Affiliate thereof is a lender, in exercising its rights as a lender, including making its decision on whether to foreclose on property of the Company, such lender will have no duty to consider (i) its status as a Member, Manager or an Affiliate of a Member or Manager, (ii) the interests of the Company or (iii) any duty it may have to the Company or any other Person.

1.10 Definitions.

Capitalized words and phrases used in this Agreement have the following meanings:

"Act" means the Delaware Limited Liability Company Act, 6 Del. C. Section18-101, et seq ., as amended from time to time (or any corresponding provisions of succeeding law).

"Additional Contribution" means, with respect to any Member, any Contribution provided by such Member after the Effective Date.

"Affiliate" means, with respect to any Person (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any officer, director, manager, general partner, member or trustee of such Person or (iii) any Person who is an officer, director, manager, general partner, member or trustee of any Person described in clauses (i) or (ii) of this sentence. For purposes of this definition, the terms "controlling," "controlled by" or "under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, or the power to elect at least 50% of the directors, managers, general partners, members or persons exercising similar authority with respect to such Person.

"Agreement" or "Operating Agreement" means this Operating Agreement of AMP Funding, L.L.C., as amended from time to time, and which shall constitute the limited liability company agreement of the Company for all purposes of the Act. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires.

"AIMC" means Aircraft International Management Corporation, a Delaware corporation.

"AIMC Stock" means all of the issued and outstanding capital stock of AIMC.

"Aircraft Lease Documents" means those documents and certificates listed on Exhibit A hereto and incorporated herein by reference.

"AM-BT" means AM-BT Nevada, Inc., a Nevada corporation.

"Assignment and Assumption Agreements" means any Assignment and Assumption Agreement in the form of Exhibit B or Exhibit F.

"Available Net Cash Proceeds" means, for any Quarterly Distribution Period, the excess of (i) the cash received by the Company during such period from all sources, including distributions from RAMP Investments, over (ii) the expenditures of the Company during such period for expenses incurred by the Company in accordance with this Agreement.

"Bankruptcy" means, with respect to any Person, a "Voluntary Bankruptcy" or an "Involuntary Bankruptcy. " A "Voluntary Bankruptcy" means, with respect to any Person (i) the inability of such Person generally to pay its debts as such debts become due, or an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such-Person for the benefit of creditors, (ii) the filing of any petition or answer by such Person seeking to adjudicate itself as bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property or (iii) corporate action taken by such Person to authorize any of the actions set forth above. An "Involuntary Bankruptcy" means, with respect to any Person, without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation, or the filing of any such petition against such Person which petition shall not be dismissed within ninety (90) days, or without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person which order shall not be dismissed within ninety (90) days. The foregoing is intended to supersede and replace the events listed in Sections 18-304(a) and (b) of the Act.

"BHCA" means the Bank Holding Company Act of 1956, as amended, and the rules and regulations promulgated thereunder.

"Business Day" means a day of the year on which banks are not required or authorized to close in New York, New York.

"Certificate" means the certificate of formation filed with the Secretary of State of the State of Delaware pursuant to the Act to form the Company, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires.

"Certificate of Cancellation" means a certificate filed in accordance with 6 Del. C. Section 18-203.

"Change of Control" of an entity shall be deemed to have occurred if a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) other than PCI owns directly or indirectly more than 50% of the voting securities, of such entity, the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such entity.

"Class A Member" means the Member that holds the Class A Preferred.

"Class A Preferred" means the class of Shares described in Section 2. 1(a)(i).

"Class B Member" means any Member that holds Class B Shares.

"Class B Preferred" means the class of Shares described in Section 2.1 (a)(ii).

"Class B Shares" means the Common Shares and the Class B Preferred.

"Closing Date" has the meaning provided in Section 11.7(d)(ii).

"Common Shares" means any of the class of Shares described in Section 2. 1(a)(iii).

"Common Distribution Rate" shall have the meaning provided in Section 3.3(a).

"Company" means the limited liability company formed pursuant to this Agreement and the Certificate.

"Company Contribution Agreement" means the Contribution Agreement of even date herewith and in the form attached hereto as Exhibit C pursuant to which the Company made, and will make, certain contributions to RAMP Investments.

"Consolidated Retained Earnings" means as of any Payment Date, the retained earnings of the Company as of such Payment Date determined (i) on a consolidated basis taking into account the results of only the Company, RAMP Investments, PCI Air Management Partners, L.L.C. and AIMC, (ii) under generally accepted accounting principles, consistently applied, and (iii) by treating the Leased Aircraft as having been acquired at the historical cost (adjusted for depreciation) at which the Leased Aircraft were reflected on the financial records of PCI.

"Contribution" means, with respect to any Member, the amount of money and any Property (other than money) contributed to the Company with respect to the Shares in the Company held or purchased by such Member.

"Contribution Agreements" means the Company Contribution Agreement and the PCI Contribution Agreement.

"Debt" means (i) any indebtedness for borrowed money or the deferred purchase price of property as evidenced by a note, bonds, or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by the Company whether or not the Company has assumed or become liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement, (v) accounts payable and (vi) obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii), (iv) and (v), above; provided that Debt shall not include obligations in respect of any accounts payable that are incurred in the ordinary course of the Company's business and are not delinquent or are being contested in good faith by appropriate proceedings.

"Dissolution Event" shall have the meaning provided in Section 11.1.

"Effective Date" means the date hereof.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"Executive Manager" shall have the meaning provided in Section 4. 1(b).

"First Appraiser" shall have the meaning provided in Section 3.5.

"First Company Assignment and Assumption Agreement" means an Assignment and Assumption Agreement in the form attached hereto as Exhibit B, dated the date hereof, pursuant to which the Company assigns and RAMP Investments assumes the obligations of PCI (as assumed by the Company pursuant to a PCI Assignment and Assumption Agreement) under the First PCJL Note.

"First PCI Assignment and Assumption Agreement" means an Assignment and Assumption Agreement in the form attached hereto as Exhibit F, dated the date hereof, pursuant to which PCI assigns and the Company assumes the obligations of PCI under the First PCJL Note.

"First PCJL Note" shall have the meaning provided in Section 2.2(a)

"Funding Agreement" shall mean the Funding Agreement, dated as of the date hereof, providing for Additional Contributions by PCI in exchange for Class B Preferred in the form attached hereto as Exhibit D .

"Gross Asset Value" shall mean for any asset contributed by a Member to the Company, the gross fair market value of such asset, as determined by a majority of the Managers other than any Manager designated by such Member; provided that the initial Gross Asset Values of the assets contributed to the Company pursuant to Section 2.1 hereof shall be as set forth in such section.

"Guaranty of Obligations" means the Guaranty of Obligations in the form attached hereto as Exhibit E, dated the date hereof, pursuant to which the Company will guarantee payment to PCJL of RAMP Investment's obligations under the PCJL Notes.

"Holding Company Eligible" means, in respect of any asset or activity, that such asset is eligible for acquisition by, or such activity may be engaged in by, a bank holding company within the meaning of (i) Article III-A of the New York Banking Law, and (ii) the BHCA, as the same may be amended from time to time.

"Involuntary Bankruptcy" has the meaning set forth in the definition of Bankruptcy.

"Leased Aircraft" means the aircraft contributed to the Company by PCI pursuant to Sections 2.1 and 2.3(a) hereof.

"Liquidation Preference" shall mean (i) for the Class A Preferred, $6,311,880, (ii) for each Class B Preferred, $2,000,000, and (iii) for purposes of determining the amount of distributions accruing at the Common Distribution Rate pursuant to Section 3.3(a), for each Common Share, an amount equal to one-third (1/3) of the aggregate Net Contribution Value contributed by the Class B Member pursuant to Sections 2.1 and 2.3(a)(i) hereof, in each case, adjusted as described herein.

"Liquidator" has the meaning provided in Section 11.5(a) hereof.

"Manager" means any of the individuals provided in Section 4.1 or otherwise designated by the Members to serve on the Management Committee pursuant to this Agreement and "Managers" means all of such individuals.

"Management Committee" has the meaning provided in Section 4.4(a) hereof.

"Member" means any Person (i) who is referred to as such in Section 2.1 to this Agreement, or who has become a substituted Member pursuant to the terms of this Agreement and (ii) who has not ceased to be a Member. "Members" means all such Persons.

"Modified Tax Basis of Accounting" means the use of the accrual method of accounting on the basis of Federal income tax laws and regulations in effect for the period being reported upon except as otherwise required by this Agreement.

"Moody's" means Moody's Investor's Services, Inc.

"Net Contribution Value" shall mean with respect to the cumulative assets contributed by a Member to the Company, the aggregate Gross Asset Values of such assets reduced by the recourse and nonrecourse liabilities of such Member assumed by the Company.

"net fair market value" shall have the meaning provided in Section 3.5.

"Notice Member" shall have the meaning provided in Section 11.7(b).

"Optional Liquidation Events" shall have the meaning provided in Section 11.7(a).

"Optional Liquidation Notice" shall have the meaning provided in Section 11.7(b).

"Original Contribution" means, with respect to any Member, any Contribution provided by such Member as of the Effective Date or the day thereafter.

"Parent" shall mean for any Member, any company, joint venture, limited liability company, association or other entity which itself or as part of a "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) legally or beneficially owns 50% or more of the outstanding voting securities or interests of such Member, the holders of which are generally entitled to vote for the election of the board of directors or other governing board of such Member.

"Payment Date" shall have the meaning provided in Section 3.2(b).

"PCI" means Potomac Capital Investment Corporation, a Delaware corporation.

"PCI Contribution Agreement" means the Contribution Agreement of even date herewith and attached hereto as Exhibit G pursuant to which PCI made, and will make, certain contributions to the Company.

"PCI Note" has the meaning provided in clause (i) of the definition of "Permitted Investment"

"PCJL" shall have the meaning provided in Section 2.2.

"PCJL Notes" means the First PCJL Note and the Second PCJL Note.

"Permitted Investments" mean:

(i) A debt obligation ( "PCI Note" ) of PCI or a direct or indirect wholly owned subsidiary of PCI fully and unconditionally guaranteed by PCI that (i) provides for interest-only payments at an interest rate equal to PCI's then current borrowing rate for equivalent maturity securities, (ii) is either a demand obligation or has a maturity no later than June 30, 2002, and (iii) is substantially in the form of the PCI Note attached hereto as Exhibit H , provided that PCI's senior unsecured debt is rated at least Baa3 by Moody's or BBB- by S&P on the date such obligation is acquired by the Company; and

(ii) A debt obligation of any issuer other than PCI or its Affiliates rated at least Baa3 by Moody's or BBB- by S&P with a maturity no later than June 30, 2002;

"Person" means any individual, partnership (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity.

"Preferred Distribution Rate" shall have the meaning provided in Section 3.2(a).

"Preferred Shares" means the Class A Preferred and the Class B Preferred.

"Property" means all real and personal property acquired by the Company, including cash, and any improvements thereto, and shall include both tangible and intangible property.

"Purchase Price" shall have the meaning provided in Section 11.7(d).

"Purchasing Member" shall have the meaning provided in Section 11.7(c).

"Quarterly Distribution Period" means the applicable period from December 31 up to the next March 31, from March 31 up to the next June 30, from June 30 up to the next September 30 or from September 30 up to the next December 31; provided, that the first Quarterly Distribution Period for any Preferred Share shall mean the period commencing on the date of the original issuance of such Share up to the first March 31, June 30, September 30 or December 31 to occur thereafter.

"RAMP Investments" means RAMP Investments, L.L.C., a Delaware limited liability company, and a Subsidiary of the Company.

"RAMP Investments Operating Agreement" means the Operating Agreement of RAMP Investments, dated as of the date hereof.

"Redemption Price" shall have the meaning provided in Section 3.4(a).

"Rescission Notice" shall have the meaning provided in Section 11.7(b).

"Rule 144" shall have the meaning provided in Section 9.4.

"SEC" shall have the meaning provided in Section 9.4.

"Second Appraiser" shall have the meaning provided in Section 3.5.

"Second Company Assignment and Assumption Agreement" means an Assignment and Assumption Agreement in the form of Exhibit B, dated as of the date of such Additional Contribution, pursuant to which the Company assigns and RAMP Investments assumes the obligations of PCI (as assumed by the Company pursuant to a PCI Assignment and Assumption Agreement) under the Second PCJL Note.

"Second PCI Assignment and Assumption Agreement" means an Assignment and Assumption Agreement in the form of Exhibit F, dated as of the date of such Additional Contribution, pursuant to which PCI assigns and the Company assumes the obligations of PCI under the Second PCJL Note.

"Second PCJL Note" shall have the meaning provided in Section 2.2(b).

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

"S&P" means Standard & Poor's Corporation.

"Share" or "Shares" refers to the Class A Preferred and the Class B Shares representing the Members' limited liability company interests in the Company plus any additional limited liability company interests in the Company authorized by the Company in an amendment to this Agreement, and any and all benefits to which the holder of such interests may be entitled as provided in this Agreement, together with all obligations of such holder to comply with the terms and provisions of this Agreement.

"Subsidiary" means, with respect to any Person, any company, partnership, joint venture, limited liability company, association or other entity in which such Person legally or beneficially owns, fifty percent (50%) or more of the outstanding voting securities or interests, the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such entity.

"Third Appraiser" shall have the meaning provided in Section 3.5.

"Transfer Managers" shall have the meaning provided in Section 9.8(a).

"Voluntary Bankruptcy" has the meaning set forth in the definition of "Bankruptcy."

SECTION 2

MEMBERS' SHARES AND CAPITAL CONTRIBUTIONS

2.1 Member Shares; Original Contributions.

(a) Interests in the Company shall be evidenced by Shares, of which there shall only be the following three (3) classes each of which shall have the rights and preferences specified in this Agreement as attaching to such class.

(i) Class A Preferred . The total amount of Class A Preferred that may be issued by the Company is one (1). The Class A Preferred shall be outstanding on the Effective Date.

(ii) Class B Preferred . The total number of Class B Preferred that may be issued by the Company is ten (10). No Class B Preferred shall be outstanding on the Effective Date. The Company will be authorized to issue Class B Preferred only in exchange for one or more Additional Contributions by PCI in accordance with Section 2.3(a)(ii).

(ii) Common Shares . The total number of Common Shares that may be issued by the Company is three (3). All of the Common Shares shall be outstanding on the Effective Date.

(b) The Company covenants that the Class A Preferred to be issued in connection with AM-BT's Original Contribution shall be duly and validly issued and fully paid and nonassessable and free from all taxes, liens and charges arising out of or by reason of the issue thereof. The Company further covenants that the Common Shares to be issued in connection with PCI's Original Contribution shall be duly and validly issued and free from all taxes, liens and charges arising out of or by reason of the issue thereof.

(c) On the Effective Date or on the first Business Day after the Effective Date, the Members shall make the following Contributions ( "Original Contributions" ) and the name, address, class of Share, and number of Shares held by of each of the Members is as follows:

Names and Address	Original Contribution	Type of Share/Number
*Class A Member:* AM-BT Nevada, Inc c/o Lionel Sawyer & Collins 1700 Bank of America Plaza 300 S. 4th Street Las Vegas, Nevada 89101	$6,311,880 in cash	Class A Preferred/ one Share
*Class B Member:* Potomac Capital Investment Corporation 900 19th Street, N.W Washington, D.C	The aircraft described in the PCI Contribution Agreement attached hereto as Exhibit G as being delivered on the Effective Date and the AIMC Stock with an aggregate initial Gross Asset Value of $239,583,415 allocated among such assets as set forth on Schedule A .	Common Shares/ three Shares

*2.2 Assumption Agreements.* (a) In connection with the Original Contribution made by PCI pursuant to Section 2.1 (i) the Company will assume liability for a note (the *"First PCJL Note"* ) in the amount of $233,000,000 payable to Potomac Capital Joint Leasing Corporation ( "PCJL" ), pursuant to the First PCI Assignment and Assumption Agreement (provided, however that the Company will not assume interest on the First PCJL Note which has accrued but is unpaid on the date of such assumption), (ii) the Company will assign and RAMP Investments will assume the Company's liability under the First PCJL Note (as assumed from PCI) pursuant to the First Company Assignment and Assumption Agreement (provided, however that RAMP Investments will not assume interest on the First PCJL Note which has accrued but is unpaid on the date of such assumption) and (iii) the Company will deliver the Guaranty of Obligations. After the foregoing assumption of the First PCJL Note, the Net Contribution Value of the Original Contribution made by PCI shall be $6,583,415. (b) In connection with the Additional Contribution made by PCI pursuant to Section 2.3(a)(i), as of the date of such Additional Contribution, (i) the Company will assume liability for a note (the "Second PCJL Note") in the amount determined pursuant to Section 2.3(b), pursuant to the Second PCI Assignment and Assumption Agreement (provided, however, that the Company will not assume interest on the Second PCJL Note which has accrued but is unpaid on the assumption date) and the Company will assign and RAMP Investments will assume the Company's liability under the Second PCJL Note (as assumed from PCI) pursuant to the Second Company Assignment and Assumption Agreement (provided, however, that RAMP Investments will not assume interest on the Second PCJL Note which has accrued but is unpaid on the assumption date). *2.3 Additional Contributions.* (a) After the Effective Date, PCI shall make (i) in accordance with the PCI Contribution Agreement, Additional Contributions of the Leased Aircraft described in the PCI Contribution Agreement as being delivered after the Effective Date together with an amount of cash attributable to rental payments on such Aircraft received by PCI after November 30, 1995 and before the date on which such Aircraft are contributed to the Company with an aggregate agreed initial Gross Asset Value of up to $275,565,330, which Leased Aircraft are subject to nonrecourse debt in the aggregate amount of $43,064,635, as additional consideration payable in exchange for the three Common Shares described in Section 2. l(a) and without accruing the right to acquire any additional Shares and (ii) in accordance with the Funding Agreement, Additional Contributions of cash in an aggregate amount not to exceed $20,000,000, in exchange for Class B Preferred at. a rate of one such Share for each $2,000,000 so contributed. The Company covenants that after giving effect to the Additional Contributions described in clause (i) above the Common Shares will be fully paid and nonassessable. The Company further covenants that all Shares of Class B Preferred which shall be issued pursuant to the Funding Agreement shall be duly and validly issued and fully paid and nonassessable and free from all taxes, liens and charges arising out of or by reason of the issue thereof. The Company will take all such action as may be necessary on its part to ensure that such Shares of Class B Preferred may be so issued without violation of any applicable law or regulation, or of any requirements of any national securities exchange upon which the Class B Preferred may be listed for trading. (b) In the event that PCI has made the entire Additional Contribution contemplated by Section 2.3(a)(i) within ninety (90) days of the Effective Date, the Second PCJL Note shall be in the amount of $35,000,000. In the event that PCI has not made the entire Additional Contribution contemplated by Section 2.3(a)(i) within ninety (90) days of the Effective Date, first , the amount of the Second PCJL Note shall be such amount, if any, that after giving effect to the assumption by the Company of such PCJL Note, the percentage obtained by dividing the Net Contribution Value of all cash contributed by AM-BT by the Net Contribution Value of all cash and Property contributed by AM-BT and PCI shall be equal to three percent (3%) and second, if the foregoing calculation results in a percentage greater than three percent (3%) when the amount thus assumed is equal to zero, the Company shall distribute to AM-BT, as a special distribution and not as a distribution pursuant to Section 3.2, an amount of cash such that after giving effect to such distribution, the percentage obtained by dividing the Net Contribution Value of all cash contributed by AM-BT by the Net Contribution Value of all cash and Property contributed by AM-BT and PCI shall be equal to three percent (3%). SECTION 3 DISTRIBUTIONS In addition to the other rights granted under this Agreement, including without limitation, Section 5.2 and 11.2 hereof, the rights and preferences to the Shares shall be as set forth below: *3.1 Priority.* (a) *Preferred Shares* . With respect to distributions with respect to the Shares, including the distribution of the assets of the Company upon dissolution, the Class A Preferred shall be senior to all other classes and series of Shares of the Company, whether such class and series are now existing or are created in the future. With respect to distributions with respect to the Shares, including the distribution of assets of the Company upon dissolution, the Class B Preferred shall be junior to the Class A Preferred and senior to all other classes and series of Shares of the Company, whether such classes and series are now existing or are created in the future. So long as the Class A Preferred is outstanding:
	(i) No distribution shall be declared or paid or set aside for payment on the Class B Preferred (except by conversion into or exchange for Shares ranking junior to the Class A Preferred) unless, in each case, full cumulative distributions accruing at the Preferred Distribution Rate on the outstanding Class A Preferred shall have been declared and paid in cash through and including the most recent Payment Date; and (ii) no distribution shall be declared or paid or set aside for payment on the Common Shares or on any other Shares ranking junior to the Preferred Shares as to distributions, nor shall any Class B Preferred, Common Share or any other Share ranking junior to the Class A Preferred be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Shares) by the Company (except by conversion into or in exchange for Common Shares or other Shares of the Company ranking junior to the Preferred Shares.
(b) *Common Shares* . Except as otherwise expressly provided in this Operating Agreement, all outstanding Common Shares shall be identical and shall entitle the holders thereof to the same rights and privileges. When, as and if distributions are declared by the Management Committee on outstanding Common Shares, whether payable in cash or property or in securities of the Company, the Common Shares shall be entitled to share equally, Share for Share, in such distributions. *3.2 Preferred Share Distributions.* (a) *Preferred Distribution Rate* . From the date of issuance, distributions shall accrue on the Preferred Shares at an annual rate equal to six and one half percent (6.5%) of such Share's Liquidation Preference as of the start of each Quarterly Distribution Period. The annual rate at which such distributions shall accrue is hereinafter referred to as the *"Preferred Distribution Rate."* (b) *Accrual* . Distributions on each Preferred Share shall be cumulative and shall accrue from the date of original issuance of such Share and, except as otherwise provided herein, distributions on Preferred Shares shall be payable on March 31, June 30, September 30 and December 31 (or, in the case of cash distributions only, if such day is not a Business Day, on the next Business Day thereafter) of each year, commencing on December 31, 1995 as to Class A Preferred and commencing on the first such date after issuance as to Class B Preferred (each such date being hereinafter referred to as a *"Payment Date"* ), to the holders of record as they appear on the books of the Company on such record date, not exceeding sixty (60) days preceding the relevant Payment Date, as may be determined by the Management Committee in advance of the payment of the particular distribution. (c) *Timing of Payment* . Distributions with respect to any Quarterly Distribution Period shall be paid on the Payment Date at the end of such Quarterly Distribution Period (or, in the case of cash distributions only, if such date is not a Business Day, on the next Business Day thereafter without any additional accrual). Any cash distributions in arrears may be declared and paid by the Company at any time, without reference to any regular Payment Date, to the holders of record on the books of the Company as of such date, not exceeding sixty (60) days preceding the payment date thereof, as may be fixed by the Management Committee. Distributions payable on the Preferred Shares for the first Quarterly Distribution Period and any other period which is less than a full Quarterly Distribution Period shall be computed at the Preferred Distribution Rate per annum based on a 360-day year of twelve 30- day months. (d) *Obligation to Pay and Form of Payment* . Subject to Section 3. 1(a), the Company shall be obligated to and shall pay the quarterly distribution accrued on each class of Preferred Shares on the Payment Date as follows:
	(i) To the extent that the aggregate quarterly distribution accrued on Class A Preferred and Class B Preferred is less than both (A) the Company's Available Net Cash Proceeds and (B) the Company's Consolidated Retained Earnings, the Company shall satisfy such obligation by making a cash distribution in an amount equal to such aggregate quarterly distribution. (ii) To the extent that the aggregate quarterly distribution accrued on Class A Preferred and Class B Preferred is (A) less than the Company's Available Net Cash Proceeds and (B) greater than the Company's Consolidated Retained Earnings, the Company shall satisfy such obligation by (1) making a cash distribution in an amount up to the Company's Consolidated Retained Earnings and (2) increasing the Liquidation Preference of the Class A Preferred or Class B Preferred, as the case may be, by the excess of the amount of the -accrued quarterly distribution on such Class A Preferred or Class B Preferred over the amount of cash distributed to holders of the Class A Preferred or Class B Preferred, respectively, provided that the cash distributed pursuant to clause (1) shall be made first to the holder of Class A Preferred in satisfaction of the quarterly distribution on Class A Preferred. (iii) To the extent that the aggregate quarterly distribution accrued on Class A Preferred and Class B Preferred is (A) less than the Company's Consolidated Retained Earnings, and (B) greater than the Company's Available Net Cash Proceeds, the Company shall satisfy such obligation by (1) making a cash distribution in an amount up to the Company's Available Net Cash Proceeds and (2) increasing the Liquidation Preference of the Class A Preferred or Class B Preferred, as the case may be, by the excess of the amount of the accrued quarterly distribution on such Class A Preferred or Class B Preferred over the amount of cash distributed to holders of the Class A Preferred or Class B Preferred, respectively, provided that the cash distributed pursuant to clause (1) shall be made first to the holder of Class A Preferred in satisfaction of the quarterly distribution on Class A Preferred. (iv) To the extent that the aggregate quarterly distribution on Class A Preferred and Class B Preferred is (A) greater than the Company's Available Net Cash Proceeds and (B) greater than the Company's Consolidated Retained Earnings, the Company shall satisfy such obligation by making a cash distribution in an amount up to the lesser of (A) the Company's Consolidated Retained Earnings and (B) the Company's Available Net Cash Proceeds and (2) increasing the Liquidation Preference of the Class A Preferred or Class B Preferred, as the case may be, by the excess of the amount of the accrued quarterly distribution on such Class A Preferred or Class B Preferred over the amount of cash distributed to holders of the Class A Preferred or the Class B Preferred, respectively, provided that the cash distributed pursuant to clause (1) shall be made first to the holder of Class A Preferred in satisfaction of the quarterly distribution on Class A Preferred. (v) If after giving effect to the distribution described in clause (i) on any Payment Date, there is an excess of Consolidated Retained Earnings and Available Net Cash Proceeds over the aggregate quarterly distribution on Class A Preferred and Class B Preferred, Available Net Cash Proceeds in an amount up to Consolidated Retained Earnings shall be distributed to reduce the aggregate Liquidation Preference first of the Class A Preferred and then of the Class B Preferred to the extent that such Liquidation Preferences have been increased pursuant to clauses (ii), (iii) or (iv); provided that the aggregate amount of such payments shall not reduce the balance of the Liquidation Preference for any Share below the Liquidation Preference of such Share as of the date of issuance. (vi) Notwithstanding Section 3.2(d)(iii) and Section 3.2(d)(iv), commencing with the Quarterly Distribution Period commencing December 31, 1997, the Company shall be obligated to satisfy each quarterly distribution obligation through the payment of cash without regard to the amount of Available Net Cash Proceeds at such time; provided that in no event shall the Company be obligated to make any cash distribution to the extent that such amount exceeds the Consolidated Retained Earnings at such time. (vii) To the extent either an amount of cash has been distributed or a Liquidation Preference has been increased in satisfaction of any quarterly distribution in accordance with this Section 3.2(d), such quarterly distribution shall no longer be deemed accrued and unpaid on the Preferred Shares.
*3.3 Common Share Distributions.* (a) *Common Distribution Rate.* From the date of issuance, distributions shall accrue on each Common Share at an annual rate equal to six and one half percent (6.5%) of such Share's Liquidation Preference. The annual rate at which such distributions shall accrue is hereinafter referred to as the *"Common Distribution Rate."* (b) *Accrual.* Distributions on each Common Share shall be cumulative and shall accrue from the date of original issuance of such Share, whether or not declared by the Management Committee, and subject to Section 3.1, and, except as otherwise provided herein, distributions on Common Shares shall be payable, on each Payment Date, commencing on the first Payment Date occurring after the Class A Preferred ceases to be outstanding, to holders of record as they appear on the books of the Company on such record date, not exceeding sixty (60) days preceding the relevant Payment Date, as may be determined by the Management Committee in advance of the payment of the particular distribution. (c) *Timing of Payment* . Distributions on the Common Shares with respect to any Quarterly Distribution Period after the first Payment Date occurring after the Class A Preferred ceases to be outstanding shall be paid on the Payment Date at the end of such Quarterly Distribution Period (or, as to distributions paid in-cash, if such date is not a Business Day, on the next Business Day thereafter) without any additional accrual. Any distributions in arrears may be declared and paid by the Company at any time, without reference to any regular Payment Date, to holders of record as of such date, not exceeding sixty (60) days preceding the payment date thereof, -as may be fixed by the Management Committee. Distributions payable on the Common Shares for any other period which is less than a full Quarterly Distribution Period shall be computed at the Common Distribution Rate per annum based on a 360-day year of twelve 30-day months. (d) *Form of Payment.* Subject to Section 3.1(a), distributions with respect to the Common Shares shall be payable only out of the Company's Consolidated Retained Earnings. Prior to the first Quarterly Distribution Period commencing after the Class A Preferred ceases. to be outstanding, and thereafter for any Quarterly Distribution Period with respect to which the quarterly distribution on Common Shares exceeds the Company's Consolidated Retained Earnings and/or Available Net Cash Proceeds, the Liquidation Preference for the Common Shares shall be increased by an amount equal to such excess. After the Class A Preferred ceases to be outstanding, for any Quarterly Distribution Period for which the quarterly distribution on Common Shares is less than the Company's Available Net Cash Proceeds and Consolidated Retained Earnings, distributions on the Common Shares, when, as and if declared by the Management Committee, may be paid in cash or in-kind. *3.4 Redemptions.* (a) *Redemption at the Option of the Company* . On or after June 30, 2001, the Company may, at its option, redeem the Class A Preferred from the Class A Member at a price (the *"Redemption Price"* ) equal to the greater of (i) the lesser of (A) such Class A Preferred's Liquidation Preference, plus all accrued and unpaid distributions to the date fixed for such distribution that have not yet been included in the Liquidation Preference or (B) the net assets of the Company or (ii) the sum of three percent (3%) of the net fair market value of the Company, plus the amount of all accrued quarterly distributions that have not been paid in cash (including those reflected in the Liquidation Preference) to the date fixed for such distribution. (b) *Redemption Procedures* . The Company shall give notice of any redemption under Section 3.4(a) of at least thirty (30) days prior to the date the Company proposes to redeem the outstanding Class A Preferred (the "Redemption Date"), by registered mail (return receipt requested), postage prepaid, to the Class A Member as it appears on the books of the Company on such record date, not exceeding sixty (60) days preceding the proposed Redemption Date, as may be determined by the Management Committee. Such notice shall be addressed to the Class A Member at the address as it appears on the transfer books of the Company and shall specify the Redemption Date. (c) *Effect of Notice* . Notice having been mailed as provided in Section 3.4(b), from and after the close of business on the Redemption Date (unless default shall be made by the Company in payment of the Redemption Price), distributions on the Class A Preferred shall cease to accrue, and the Class A Preferred shall no longer be deemed to be outstanding, and all rights of the Class A Member as a Member (except the right to receive from the Company the Redemption Price) shall cease. Upon surrender in accordance with said notice of the certificate representing the Class A Preferred (properly endorsed or assigned for transfer, if required by the Management Committee and the notice of redemption so states), such Share shall be redeemed by the Company at the Redemption Price provided for herein. If on or before the Redemption Date the funds necessary for such redemption shall have been set aside by the Company, separate and apart from its other funds, for the exclusive benefit of the Class A Member, and shall in fact be applied to pay the Redemption Price then, on the Redemption Date, notwithstanding that the certificate representing the Class A Preferred shall not have been surrendered for cancellation (A) the Class A Preferred shall no longer be deemed outstanding, (B) the right to receive distributions on the Class A Preferred shall cease to accrue and (C) all other rights with respect to the Class A Preferred shall forthwith cease and terminate, except the right of the Class A Member to receive the amount payable to such Member upon such redemption, without interest. The Class A Preferred so redeemed shall, upon such redemption, be retired and thereafter shall not be reissued. (d) *Payment* . On the applicable Redemption Date, the Company shall pay to the Class A Member by wire transfer of immediately available funds to such account as is designated by the Class A Member, the Redemption Price. (e) *Effect of Redemption on Company* . Notwithstanding the withdrawal of the Class A Member following the redemption of its Class A Preferred, the Members agree that in furtherance of Section 1.5 of this Agreement, the Company shall continue and be continued after the Redemption Date. *3.5 Determination of Fair Market Value.* (a) *Fair Market Value.* For the purposes of this Agreement, the net fair market value ( *"net fair market value"* ) of the Company as of any day shall mean the fair market value of the assets of the Company determined by reference to the consolidated balance sheet of the Company on a marked to market basis reduced by (i) the aggregate liabilities of the Company as of such day, (ii) any accrued distributions not yet paid in cash (including those reflected in the Liquidation Preference) on all Shares and (iii) the aggregate amount of Class B Preferred Liquidation Preference (without giving effect to any increase for accrued distributions not yet paid in cash) up to but not including the date of determination, determined by reference to the balance sheet of the Company on a marked to market basis. (b) *Appraisal* . In the event that it is necessary to determine the fair market value of the assets of the Company, the Company shall appoint an appraiser (the *"First Appraiser"* ) and, within fifteen (15) Business Days of receiving notice designating the First Appraiser, the holder being redeemed or Notice Member, as the case may be, shall appoint a second appraiser (the *"Second Appraiser"* ). If the Second Appraiser is not timely designated, the determination of the fair market value shall be made by the First Appraiser. The First Appraiser, or each of the First Appraiser and the Second Appraiser, shall submit its determination of the fair market value to the Company and all Members within twenty (20) days of the date of its selection (or the selection of the Second Appraiser, as applicable). If there are two appraisers and their respective determinations of the fair market value vary by less than ten percent (10%) of the higher determination, the fair market value shall be the average of the two determinations. If such determinations vary by ten percent (10%) or more of the higher determination, the two appraisers shall promptly designate a third appraiser (the *"Third Appraiser"* ). Neither the Company nor the holder being redeemed or Notice Member, as the case may be, shall provide, and the First Appraiser and the Second Appraiser shall be instructed not to provide, any information to the Third Appraiser as to the determinations of the First Appraiser and the Second Appraiser or otherwise influence the Third Appraiser in any way. The Third Appraiser shall submit its determination of fair market value to the Company and all Members within twenty (20) days of the date of its selection. The fair market value shall be equal to the average of the two closest of the three determinations; provided that, if the difference between the highest and the middle determination is no more than 105% and no less than 95% of the difference between the middle and the lowest determinations, then the fair market value shall equal the middle determination. (c) Status of Appraiser. Each appraiser selected pursuant to this Section 3.4 shall be disinterested and must be a nationally recognized appraiser qualified to appraise the property being appraised. *3.6* *Distributions and Payments to Members.* (a) It is the intent of the Members and the Manager that no distribution or payment to any Member shall be deemed a return of money or other property in violation of the Act. The payment or distribution of any such money or property to a Member shall be deemed to be a compromise within the meaning of Section 18-502(b) of the Act, and the Member receiving any such money or property shall not be required to return any such money or property to the Company, any creditor of the Company or any other Person. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to return such money or property, such obligation shall be the obligation of such Member and not of any Manager, or the Company or any other Member. (b) Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to any Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other applicable law. SECTION 4 MANAGEMENT *4.1 Managers.* (a) The Company shall have Managers and the Members intend that the Company be managed by the Managers in accordance with Section 18-402 of the Act. A Member shall have the right to designate one Manager for each outstanding voting Share held by such Member. Each Manager so designated shall be either the Member or an employee or officer of the Member, who shall perform its duties as Manager hereunder pursuant to its existing employment relationship with such Member. (b) The Members hereby agree that the Class B Member as of the date hereof, and any successor to a majority of such Class B Member's Shares in accordance with this Agreement, shall have the right to designate one of the individuals it is otherwise entitled to designate as Manager, as Manager and executive manager (the "Executive Manager"). The Executive Manager shall preside over meetings of the Managers and shall be authorized to exercise authority on behalf of the Management Committee to the extent specified by this Agreement. (c) Simultaneously with the execution hereof, PCI hereby designates the individual set forth in Item (1) as Manager and Executive Manager and the individuals set forth in Items (2) and (3) as Manager and AM-BT hereby designates the individual set forth in Item (4) as Manager such that the names and addresses of the Managers and Executive Manager who shall serve until their respective successors shall have been designated and qualified are as follows:
Name			Address
(1) Gary R. Correll			1575 Delucchi Lane Suite 115 Reno, Nevada 89502
(2) Leslie C. Zimberg			1575 Delucchi Lane Suite 115 Reno, Nevada 89502
(3) William Dana Shapiro			1575 Delucchi Lane Suite 115 Reno, Nevada 89502
(4) James H. Stallkamp			c/o Lionel Sawyer & Collins 300 South Fourth Street Las Vegas, Nevada 89101
(d) Each Manager is and shall remain as long as he is a Manager, a "citizen of the United States" within the meaning of Section 101(16) of the Federal Aviation Act and shall notify the Members and the other Managers upon becoming aware of any fact or circumstance that would lead reasonably to the conclusion that such Manager is at risk of losing such citizenship. *4.2* *Term.* Each Manager shall be designated for a one year term and shall hold office until his or her term expires and until his or her successor shall be designated and shall qualify to serve, subject to prior death, resignation, retirement, disqualification or removal from office. Upon the vacancy of any Manager position, the Member entitled to designate such Manager shall designate a successor who satisfies the criteria set forth in Section 4.1 hereof. *4.3* *Removal.* A Manager may be removed with or without cause only by the Member that has designated such Manager. *4.4* *Management Committee.* (a) The management of the Company shall be vested in the committee of Managers (the *"Management Committee"* ), which shall be constituted by the Managers then in office. (b) Each Manager shall have one (1) vote. Except as otherwise provided in this Agreement, the Management Committee shall act by the affirmative vote of a majority of the total number of Managers on the Committee. (c) The Management Committee shall have the power to delegate authority to the Executive Manager, such committees of Managers, employees, agents and representatives of the Company as it may from time to time deem appropriate. Any delegation of authority to take any action must be approved in the same manner as would be required for the Management Committee to approve such action directly. The Executive Manager is hereby authorized to execute all agreements and other documents necessary for or incidental to the formation of the Company, including, without limitation, those agreements set forth in Section 4.6(p). (d) A Manager shall not be liable under a judgment, decree or order of court, or in any other manner, for a debt, obligation or liability of the Company solely by virtue of such Manager serving as a manager of the Company. *4.5* *Meetings of the Management Committee.* (a) The Management Committee shall hold regular meetings no less frequently than once every Quarterly Distribution Period and shall establish meeting times, dates and places and requisite notice requirements (not shorter than those provided in Section 4.5(b) and adopt rules or procedures consistent with the terms of this Agreement. Unless otherwise approved by the Management Committee, each regular meeting of the Management Committee will be held at the Company's principal place of business. At such meetings the Management Committee shall transact such business as may properly be brought before the meeting, whether or not notice of such meeting referenced the action taken at such meeting. (b) Special meetings of the Management Committee may be called by any Manager. Notice of each such meeting shall be given to each Manager on the Management Committee by telephone, telecopy, telegram or similar method (in each case, notice shall be given at least seventy-two (72) hours before the time of the meeting) or sent by first-class mail (in which case notice shall be given at least five (5) days before the meeting), unless a longer notice period is established by the Management Committee. Each such notice shall state (i) the time, date, place (which shall be at the principal office of the Company unless otherwise agreed to by all Managers) or other means of conducting such meeting and (ii) the purpose of the meeting to be so held. No actions other than those specified in the notice may be considered at any special meeting unless unanimously approved by the Managers. (c) Any Manager may waive notice of any meeting in writing before, at, or after such meeting. The attendance of a Manager at a meeting shall constitute a waiver of notice of such meeting, except when a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the meeting was not properly called. (d) Any action required to be taken at a meeting of the Management Committee, or any action that may be taken at a meeting of the Management Committee, may be taken at a meeting held by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at such meeting. (e) Notwithstanding anything to the contrary in this Section 4.5, the Management Committee may take without a meeting any action that may be taken by the Management Committee under this Agreement if such action is approved by the unanimous written consent of the Managers. *4.6* *Management Committee Powers.* Subject to any restrictions set forth in the Certificate or this Operating Agreement, including without limitation, those set forth in Section 5.5 hereof, all powers to control and manage the business and affairs of the Company shall be exclusively vested in the Management Committee and the Management Committee may exercise all powers of the Company and do all such lawful acts as are not by statute, the Certificate or this Operating Agreement directed or required to be exercised or done by the Members and in so doing shall have the right and authority to take all actions which the Management Committee deems necessary, useful or appropriate for the management and conduct of the Company's business and affairs and in the pursuit of the purposes of the Company, including exercising the following specific rights and powers in the name and on behalf of the Company: (a) Conduct its business, carry on its operations and have and exercise the powers granted by the Act in any state, territory, district or possession of the United States, or in any foreign country which may be necessary or convenient to effect any or all of the purposes for which it is organized; (b) Acquire by purchase, lease, or otherwise any real or personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Company; (c) Operate, maintain, finance, improve, construct, own, grant options with respect to, sell, convey, assign, mortgage, and lease any real estate and any personal property necessary, convenient, or incidental to the accomplishment of the purposes of the Company; (d) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of the Property, or in connection with managing the affairs of the Company, including, executing amendments to this Operating Agreement and the Certificate in accordance with the terms of this Operating Agreement, both as Managers and, if required, as attorney-in-fact for the Members pursuant to any power of attorney granted by the Members to the Managers; (e) Borrow money and issue evidences of indebtedness necessary, convenient, or incidental to the accomplishment of the purposes of the Company, and secure the same by mortgage, pledge, or other lien on any Company assets; (f) Execute, in furtherance of any or all of the purposes of the Company, any deed, lease, mortgage, deed of trust, mortgage note, promissory note, bill of sale, contract, or other instrument purporting to convey or encumber any or all of the Company assets; (g) Prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the assets of the Company and in connection therewith execute any extensions or renewals of encumbrances on any or all of such assets; (h) Care for and distribute funds to the Members by way of cash income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Company or this Agreement; (i) Contract on behalf of the Company for the employment and services of employees and/or independent contractors, such as lawyers and accountants, and delegate to such Persons the duty to manage or supervise any of the assets or operations of the Company; (j) Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Company assets and Manager liability) necessary or incidental to, or in connection with, the accomplishment of the purposes of the Company, as may be lawfully carried on or performed by a limited liability company under the laws of each state in which the Company is then formed or qualified; (k) Take, or refrain from taking, all actions, not expressly proscribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Company; (l) Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Company, the Members or any Manager in connection with activities arising out of, connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith; (m) Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use; employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign companies, associations, general or limited partnerships, other limited liability companies, or individuals or direct or indirect obligations of the United States or of any government, state, territory, government district or municipality or of any instrumentality of any of them including, without limitation, acquiring an interest in and being admitted as a member of, RAMP Investments, and exercising all of the Company's rights as a member of RAMP Investments; (n) Indemnify a Member or Manager or former Member or Manager, in accordance with this Operating Agreement and to make any other indemnification that is authorized by this Agreement in accordance with the Act; (o) Acquire the Leased Aircraft, AIMC Stock and cash contributed by the Members and after retaining $1,000,000 for the payment of certain expenses incidental to the formation of the Company, contribute the same to RAMP Investments; (p) Execute and deliver on behalf of the Company the Contribution Agreements, the Assignment and Assumption Agreements, the Guaranty of Obligations, the Aircraft Lease Documents and any other documents or instrument to be delivered in connection with any of the foregoing; and (q) Each Manager shall be an "authorized person" on behalf of the Company, as that term is defined in the Act. *4.7* *Duties and Obligations of the Management Committee.* (a) The Management Committee shall take all actions which may be necessary or appropriate (i) for the continuation of the Company's valid existence as a limited liability company under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Members or to enable the Company to conduct the business in which it is engaged and (ii) for the accomplishment of the Company's purposes, including the acquisition, development, maintenance, preservation, and operation of Property in accordance with the provisions of this Agreement and applicable laws and regulations. (b) The Managers and the Management Committee shall be under a fiduciary duty to conduct the affairs of the Company in the best interests of the Company and of the Members, including the safekeeping and use of all of the Property and the use thereof for the exclusive benefit of the Company. (c) Immediately after its acquisition of the Leased Aircraft, the AIMC Stock and the cash contributed by the Members, after retaining $1,000,000 for the payment of certain expenses incidental to the formation of the Company, the Management Committee shall cause the Company to contribute to RAMP Investments pursuant to the Company Contribution Agreement the Leased Aircraft, the AIMC Stock and the balance of the cash contributed by the Members in exchange for a member's interest therein and shall cause the Company to pay $1,000,000 to Bankers Trust Company. (d) So long as the Class A Preferred remains outstanding, except for obligations under the PCJL Notes and the transactions authorized pursuant to Section 1.9(d), the Company shall not incur, assume or obligate itself by contract or otherwise for any Debt or other liability in the aggregate in excess of $100,000; provided, that the Company may borrow funds from PCI in order to pay (i) federal, state and local taxes and (ii) cash distributions to holders of Preferred Shares. (e) The Managers and the Management Committee shall cause the Company at all times to procure or cause to be procured and maintain or cause to be maintained with insurers of recognized responsibility, and substantial financial capacity, in the worldwide commercial aviation, watercraft or railcar industry, as the case may be, primary insurance and contingent liability and property damage liability insurance insuring the respective interest of each Member of the Company of the type and in amounts in accordance with prudent industry practice for persons owning, operating or using aircraft, watercraft or railcars, as the case may be, which covers the kinds of risks customarily insured and in amounts consistent with prudent industry practice; provided, however, that all contingent aircraft public liability insurance and aircraft property damage liability insurance shall have a combined single limit of not less than $500,000,000. *4.8* *Compensation; Expenses.* (a) Except as otherwise provided in this Section 4.8 and Section 4.9 hereof, no Manager or Member shall receive any salary, fee, or draw for services rendered to or on behalf of the Company or otherwise in its capacity as a Manager or Member, nor shall any Manager or Member be reimbursed for any expenses incurred by such Manager or Member on behalf of the Company or otherwise in its capacity as a Manager or Member. (b) The Company shall reimburse the Members and Managers for all expenses incurred and paid by any of them in the organization of the Company and as authorized by the Management Committee, in the conduct of the Company's business, including, but not limited to, expenses of maintaining an office, telephones, travel, office equipment and secretarial and other personnel as may reasonably be attributable to the Company. Such expenses shall not include any expenses incurred in connection with a Member's or Manager's exercise of its rights as a Member or a Manager apart from the authorized conduct of the Company's business. The Management Committee's sole determination of which expenses are allocated to and reimbursed as a result of the Company's activities or business and the amount of such expenses shall be conclusive. Such reimbursement shall be treated as expenses of the Company and shall not be deemed to constitute distributions to any Member. *4.9* *Indemnification of the Managers.* (a) Unless otherwise provided in Section 4.9(d), the Company, its receiver or its trustee (in the case of its receiver or trustee, to the extent of Company Property) shall indemnify, save harmless, and pay all expenses of any Manager relating to any liability or damage incurred by reason of any act performed or omitted to be performed by any Manager in connection with the business of the Company, including reasonable attorneys' fees incurred by the Manager in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, including all such liabilities under federal and state securities laws (including the Securities Act and the Exchange Act) as permitted by law. (b) Unless otherwise provided in Section 4.9(d), in the event of any action by a Member against any Manager, including a Company derivative suit, the Company shall indemnify, save harmless, and pay all expenses of such Manager, including reasonable attorneys' fees incurred in the defense of such action. (c) Unless otherwise provided in Section 4.9(d), the Company shall indemnify, save harmless, and pay all expenses, costs, or liabilities of any Manager, if for the benefit of the Company and in accordance with this Agreement said Manager makes any deposit or makes any other similar payment or assumes any obligation in connection with any Property proposed to be acquired by the Company and suffers any financial loss as the result of such action. (d) Notwithstanding the provisions of Sections 4.9(a), 4.9(b) and 4.9(c), such sections shall be enforced only to the maximum extent permitted by law and no Manager shall be indemnified from any liability for the fraud, intentional misconduct, gross negligence or a knowing violation of the law which was material to the cause of action. (e) Notwithstanding anything to the contrary in this Agreement, in no event will any indemnification obligation of the Company or a receiver or trustee to indemnify, save harmless or pay all expenses set forth in this Section 4.9 subject any Member or Manager to personal liability. SECTION 5 ROLE OF MEMBERS *5.1* *Rights or Powers.* The Members, in their capacities as Members of the Company, shall not have any right or power to take part in the management or control of the Company or its business and affairs or to act for or bind the Company in any way. Notwithstanding the foregoing, the Members have all the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act. *5.2* *Voting Rights.* At every meeting of the Members, unless otherwise provided by this Operating Agreement, or as required by applicable law, on all matters to be voted on by the Members, holders of Common Shares and Class A Preferred shall vote together as a single class. Each Member shall be entitled to cast one vote for every Common Share and Class A Preferred registered in its name and no vote for every share of Class B Preferred registered in its name. For the purposes of illustration, at a meeting of Members when all Common Shares are issued and outstanding and the Class A Preferred is issued and outstanding, the Class B Member would have the right to exercise three votes and the Class A Member would have the right to exercise one vote, which would constitute at that time 75% and 25%, respectively, of all possible votes. *5.3* *Meetings and Consents of the Members.* (a) The Company shall call an annual meeting of its Members on or about the first week of each April. Special meetings of the Members may be called by the Management Committee or upon the written request of any Member. The call for any meeting shall state the location of the meeting and the nature of the business to be transacted. Notice of any such meeting shall be given to all Members not less than ten (10) Business Days nor more than thirty (30) days prior to the date of such meeting. Members may vote in person, by proxy or by telephone at such meeting and may waive advance notice of such meeting. Whenever the vote or consent of Members is permitted or required under this Agreement, such vote or consent may be given at a meeting of the Members or may be given in accordance with the procedure prescribed in this Section 5.3. Except as otherwise expressly provided in this Agreement, a majority vote, agreement, approval or consent of the Members voting as a single class shall be. required to constitute the act of the Members or the agreement, approval or consent of the Members. (b) For the purpose of determining the Members entitled to vote on, or to vote at, any meeting of the Members or any adjournment thereof, the Management Committee or the Member requesting such meeting may fix, in advance, a date as the record date for any such determination. Such date shall not be more than thirty (30) days nor less than ten (10) Business Days before any such meeting. (c) Each Member may authorize any Person or Persons to act for it by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (1 1) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it. *5.4* *Procedure for Consent.* In any circumstances requiring the agreement, approval or consent of the Members specified in this Operating Agreement, such agreement, approval or consent may, except where a standard for such agreement, approval or consent is provided for expressly in this Operating Agreement, be given or withheld in the sole and absolute discretion of the Members, and each Member shall be entitled to consider only such factors and interests as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person. If the Management Committee receives the necessary agreement, approval or consent of the Members to such action, the Management Committee shall be authorized and empowered to implement such action without further authorization by the Members. Such agreement, approval or consent must be obtained in writing or by telephone or facsimile, if such telephone conversation or facsimile is followed by a written summary of the telephone conversation or facsimile communication sent by overnight courier, registered or certified mail, postage and charges prepaid, addressed as described in Section 12.1 hereof, or to such other address as such Person may from time to time specify by notice to the Members and the Management Committee; provided, however, that such agreement, approval or consent shall be deemed to have been given by a Member if such Member does not otherwise notify the Management Committee in writing within sixty (60) days after such Member is notified in writing by the Management Committee that such Member's agreement, approval or consent is requested. *5.5* *Required Member Consents.* Notwithstanding any other provision of this Operating Agreement, no action may be taken by the Company (whether by the Management Committee or otherwise) in connection with the following matters without the unanimous affirmative vote of the Members: (a) Cause or permit the Company to engage in any activity that is not consistent with the purposes of the Company as set forth in Section 1.3 hereof; (b) Knowingly do any act in contravention of this Operating Agreement; (c) Confess a judgment against the Company in an amount in excess of $100,000; (d) Cause the Company to merge or consolidate with another Person; (e) Knowingly do any act which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Operating Agreement; (f) Possess Property, or assign rights in specific Property, for other than a Company purpose; (g) Cause the Company to take any action that would cause a Bankruptcy of the Company; (h) Cause a significant change in the nature of the Company's business or make any amendment, consent, waiver, or other modification with respect to this Operating Agreement, the RAMP Investments Operating Agreement, the PCI Note, the Aircraft Lease Documents, the Guaranty of Obligations, the Assignment and Assumption Agreements or the Contribution Agreements; (i) Cause the Company to incur, assume, or obligate itself by contract for any Debt in the aggregate in excess of $50,000, except that the Company may incur, assume or obligate itself by contract for (i) liabilities described in Sections 4.6(p) and 4.8(b) hereof, and (ii) current trade liabilities incurred in the ordinary course of the Company's trade or business and payable in accordance with customary practices; (j) Cause the Company to refinance, recast, increase, modify, or extend any liabilities affecting the Property and in connection therewith execute any extensions or renewals of encumbrances on any or all of the Property; (k) Cause the Company to invest in or acquire directly or indirectly any assets other than (i) those acquired by contribution of the Members pursuant to Section 2, (ii) an interest in RAMP Investments, (iii) Permitted Investments and (iv) cash proceeds and ancillary rights arising from the transactions contemplated hereby. *5.6* *Members' Liability.* No Member shall be liable under a judgment, decree or order of a court, or in any other manner for the Debts or any other obligations or liabilities of the Company solely by reason of being a member of the Company. A Member shall be liable only to make the Contributions described in Section 2, on the terms therein described, and shall not be required to lend any funds to the Company, or to make any other contributions, assessments or payments to the Company; provided that a Member may be required to repay distributions made to it as provided in Section 18-607 of the Act or Section 3.6 hereof. *5.7* *Partition.* While the Company remains in effect or is continued, each Member agrees not to have any Company Property partitioned or file a complaint or institute any suit, action or proceeding at law or in equity to have any Company Property partitioned, and each Member, on behalf of itself, its successors and its assigns hereby waives any such right. *5.8* *Transactions Between a Member or Manager and the Company.* Except as otherwise provided by applicable law, any Member or Manager may, but shall not be obligated to, enter into the transactions described in Sections 1.9(c), 1.9(d) and 1.9(e) and transact other business with the Company and has the same rights and obligations when transacting such business with the Company as a Person or entity who is not a Member or Manager. A Member or Manager, any Affiliate thereof or an employee, stockholder, agent, director or officer of a Member or Manager or any Affiliate thereof, may also be an employee or be retained as an agent of the Company. *5.9* *Other Instruments.* Each Member hereby agrees to execute and deliver to the Company within five (5) Business Days after receipt of a written request therefor, such other and further documents and instruments, statements of interest and holdings, designations, powers of attorney and other instruments and to take such other action as the Management Committee deems necessary, useful or appropriate to comply with any laws, rules or regulations as may be necessary to enable the Company to fulfill its responsibilities under this Agreement. SECTION 6 REPRESENTATIONS AND WARRANTIES *6.1* *In General.* As of the date hereof, each of the Members hereby makes each of the representations and warranties applicable to such Member as set forth in Sections 6.2 and 6.3 hereof, and such warranties and representations shall survive the execution of this Agreement. *6.2* *Representations and Warranties.* Each Member hereby represents and warrants to the Company and each other Member that: (a) *Due Incorporation or Formation; Authorization of Agreement* . Such Member is a corporation duly organized or a partnership or limited liability company duly formed, validly existing, and in good standing under the laws of the jurisdiction of its incorporation or formation and has the corporate, partnership, or limited liability company power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Member is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Member has the corporate, partnership or limited liability company power and authority to execute and deliver this Operating Agreement and to perform its obligations hereunder and the execution, delivery, and performance of this Operating Agreement has been duly authorized by all necessary corporate, partnership, or limited liability company action. This Operating Agreement constitutes the legal, valid, and binding obligation of such Member. (b) *No Conflict with Restrictions; No Default* . Neither the execution, delivery, and performance of this Operating Agreement nor the consummation by such Member of the transactions contemplated hereby (i) will conflict with, violate, or result in a breach, whether with notice or lapse of time or both, of any of the terms, conditions, or provisions of any law, regulation, order, writ, injunction, decree, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator, applicable to such Member, (ii) will conflict with, violate, result in a breach of, or constitute a default under, whether with notice or lapse of time or both, any of the terms, conditions, or provisions of the articles of incorporation, bylaws, partnership agreement or limited liability company or operating agreement of such Member, (iii) will conflict with, violate, result in a breach of, constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights, or require any consent, authorization, or approval under any indenture, note, bond, mortgage, lease agreement, or other instrument or agreement to which such Member is a party or by which such Member is or may be bound or (iv) will result in the creation or imposition of any lien, claim, charge or encumbrance upon any of the material properties or assets of such Member. (c) *Governmental Authorizations* . Any registration, declaration, or filing with, or consent, approval, license, permit, or other authorization or order by, any governmental or regulatory authority, domestic or foreign, that is required by such Member in connection with the valid execution, delivery, acceptance and performance by such Member of its obligations under this Agreement or the consummation by such Member of any transaction contemplated hereby has been completed, made, or obtained on or before the Effective Date; provided, however, that AM-BT makes no representation or warranty under this paragraph (c) with respect to any federal, state or other banking laws and regulations. (d) *Litigation* . There are no actions, suits, proceedings, or investigations pending or, to the knowledge of the executive officers of such Member, threatened against or affecting such Member or its Affiliates or any of its properties, assets, or businesses in any court or before or by any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit, or proceeding, which if adversely determined could) reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member; and such Member has not received any currently effective notice of any default, and such Member is not in default (whether with notice or lapse of time or both), under any applicable order, writ, injunction, decree, permit, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Member's ability to perform its obligations under this Operating Agreement or to have a material adverse effect on the consolidated financial condition of such Member. (e) *Public Utility Holding Company Act* . Such Member (other than AM- BT) and each of its Affiliates is not, nor will the Company or any of its Members as a result of such Member holding an interest therein be, a "holding company," an "affiliate of a holding company," a "subsidiary of a holding company," or an "associate company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended, or the regulations promulgated thereunder. (f) *Subsidiary* . All of the outstanding capital stock or ownership interests in the capital and profits of such Member is owned, legally or beneficially, by its Parent. (g) *Investigation* . Such Member is acquiring its Shares based upon its own investigation, and the exercise by such Member of its rights and the performance of its obligations under this Agreement will be based upon its own investigation, analysis, and expertise. Such Member's acquisition of its Shares is being made for its own account for investment, and not with a view to the sale or distribution thereof. Such Member is a sophisticated investor possessing an expertise in analyzing the benefits and risks associated with acquiring investments that are similar to the acquisition of its Shares. (h) *Citizenship* . Such Member is, and shall remain so long as it is a Member, a "citizen of the United States" within the meaning of Section 101(16) of the Federal Aviation Act and shall notify the Managers or Management Committee immediately upon becoming aware of any fact or circumstance that would lead reasonably to the conclusion that such Member is at risk of losing such citizenship. (i) *ERISA* . Such Member is not acquiring its Shares with the assets of any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or any "plan" within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended. *6.3* *Additional Representations, Warranties and Covenants by AM-BT* In addition to the representations, warranties and covenants set forth in Section 6.2 hereof, AM-BT hereby represents and warrants to the Company, and PCI, and where indicated covenants and agrees that: (a) *Bank Holding Company* . None of the Company, PCI or any Manager nor any Affiliate thereof shall be deemed to be a "bank holding company" within the meaning of the BHCA, solely by reason of AM-BT being a Member. (b) *Bank Regulatory Approvals* . Without limitation of the representations and warranties of AM-BT set forth in paragraph (c) below, no registration, declaration or filing with, or consent, approval, license, permit or other authorization or order of or by the Board of Governors of the Federal Reserve System, the Banking Department of the State of New York, the Federal Deposit Insurance Corporation or any other bank regulatory authority with jurisdiction over AM-BT or any of its Affiliates is required in connection with the execution, delivery and performance by AM-BT of this Operating Agreement, the performance by AM-BT of its obligations hereunder, the consummation of the transactions contemplated hereby or the acquisition by AM-BT of its Shares. (c) *Holding Company Eligible Assets* . The Contributions of the Members made pursuant to Section 2 (based on facts and information provided to AM-BT by PCI and PCI Air Management Partners, L.L.C.) consist and shall consist solely of Holding Company Eligible assets. AM-BT covenants and agrees that it will not consent (based on facts and information provided to AM-BT by the Management Committee) to the acquisition of any additional asset by or on behalf of the Company or the commencement by the Company of any activity not engaged in on the Effective Date, unless such asset or activity, as the case may be, is a Holding Company Eligible asset or Holding Company Eligible activity, as the case may be. *6.4* *Limitation on Dan2ages for Breach of Representations or Warranties/Damage* *Payments.* (a) Notwithstanding any other provision of this Agreement, or any other law, rule, or regulation, each Member shall in no event be liable to the Company, the Members or any Affiliate of any of them for any amount in excess of $5,000,000 in the aggregate for all claims resulting from, related to, or in connection with the breach or other violation of any representation, warranty, covenant or agreement contained herein. (b) Any damages, indemnification or other payments made to the Company with respect to any breach or other violation of any representation, warranty, covenant or other agreement made pursuant to this Section 6, to the extent paid with respect to costs, liabilities or damages incurred by a Member or an Affiliate thereof, shall immediately be paid by the Company to such Member or Affiliate. SECTION 7 ACCOUNTING, BOOKS AND RECORDS *7.1* *Accounting, Books and Records.* (a) The Company shall keep on site at its principal place of business each of the following:
	(i) Separate books of account for the Company which shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received, and all income derived in connection with the conduct of the Company and the operation of its business in accordance with this Operating Agreement. (ii) A current list of the full name and last known business, residence, or mailing address of each Member and Manager, both past and present; (iii) A copy of the Certificate and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been executed; (iv) Copies of the Company's federal, state, and local income tax returns and reports, if any, for the three most recent years; (v) Copies of this Operating Agreement; (vi) Unless contained in this Operating Agreement, a statement prepared and certified as accurate by the Management Committee of the Company which describes:
		(A) The amount of cash and a description and statement of the agreed value of the other property contributed by each Member and which each Member has agreed to contribute in the future; (B) The times at which or events on the happening of which any Additional Contributions agreed to be made by each Member are to be made; (C) Any right of a Member to receive distributions, and the relative preferences and designations of the Company's Shares;
	(vii) Any written consents obtained from Members pursuant to Section 5.4 regarding action taken by Members without a meeting.
(b) The Company shall use the accrual method of accounting in preparation of its financial reports and for tax purposes and shall keep its books and records accordingly. Any Member or its designated representative has the right at its own cost and expense, at any reasonable time, to have access to and inspect and copy the contents of such books or records. The Management Committee shall be reimbursed by such Member for reasonable costs incurred as a result of such inspection. Notwithstanding anything in the Act (including Section 18-305(c) of the Act) or this Agreement to the contrary, the Management Committee shall not have the right to keep confidential from any Member any information concerning the Company. *7.2* *Reports.* The Management Committee shall be responsible for causing the preparation of financial reports of the Company and the coordination of financial matters of the Company with the Company's accountants. SECTION 8 AMENDMENTS *8.1* *Amendments.* Amendments to this Agreement may be proposed by any Manager or any Member. Following such proposal, the Management Committee shall submit to the Members a verbatim statement of any proposed amendment, providing that counsel for the Company shall have approved of the same in writing as to form, and the Management Committee shall include in any such submission a recommendation as to the proposed amendment. The Management Committee shall seek the written vote of the Members on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto if it receives the affirmative vote of all of the Members. SECTION 9 TRANSFERS The parties intend that subject to the requirements of applicable law the Shares shall be freely transferable. In furtherance of the foregoing, and so long as any Shares remain issued and outstanding, the parties hereto agree as follows: *9.1* *Sale of Shares.* (a) Each Member shall not transfer or sell any of the Shares held by such Member, except pursuant to an effective registration statement under applicable state securities laws and the Securities Actor in a transaction which is exempt under such applicable state securities laws and the Securities Act, or make any transfer which will cause the transfer of Shares to be unlawful or violative of any such statute or regulation. In no event shall such transfer cause the Company to be an "investment company" under the Investment Company Act of 1940, as amended. *9.2* *Legend.* Each certificate of Shares shall be stamped or otherwise imprinted with a legend substantially in the following form:
	THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), THE SECURITIES LAWS OF ANY STATE (THE "STATE ACTS") OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE HARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, BY ANY STATE SECURITIES COMMISSION OR BY ANY OTHER REGULATORY AUTHORITY OF ANY OTHER JURISDICTION. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. NEITHER THE SHARES NOR ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OR FOR WHICH SUCH REGISTRATION IS OTHERWISE NOT REQUIRED AND (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER ANY APPLICABLE STATE ACTS OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER SUCH STATE ACTS OR FOR WHICH SUCH REGISTRATION OTHERWISE IS NOT REQUIRED. THE SHARES REPRESENTED BY THIS CERTIFICATE EVIDENCE THE PROPORTIONATE PORTION OF SUCH HOLDER'S LIMITED LIABILITY COMPANY INTEREST IN THE COMPANY. A STATEMENT OF THE RELATIVE RIGHTS AND PREFERENCES OF THE COMPANY'S LIMITED LIABILITY COMPANY INTERESTS, AS EVIDENCED BY ITS CLASSES OF COMMON SHARES AND OF PREFERRED SHARES WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST AND WITHOUT CHARGE. THERE IS NO PUBLIC MARKET FOR THE SHARES AND NONE IS EXPECTED TO DEVELOP. THEREFORE, RECIPIENTS OF SHARES WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
*9.3* *Notice of Proposed Transfer.* If, prior to any transfer or sale of any Shares, the transferring Member shall deliver a written notice to the Company describing briefly the manner of such transfer or sale and shall also deliver a written opinion of counsel for such Member to the effect that such transfer or sale may be effected without the registration of such securities under the Securities Act and that as a result of such transfer the Company would not be an investment company, the Company shall thereupon permit or cause its transfer agent (if any) to permit such transfer or sale to be effected; provided that the Members may unanimously agree to waive delivery of either or both of the foregoing legal opinions. *9.4* *Termination of Restrictions.* (a) The restrictions imposed by this Agreement upon the transferability of the Shares shall terminate as to any particular Share when (i) such security shall have been effectively registered under the Securities Act and sold by the holder thereof in accordance with such registration, (ii) a written opinion to the effect that such restrictions are no longer required or necessary under any federal or state securities law or regulation have been received from counsel for the holder thereof or counsel for the Company, (iii) such security shall have been sold without registration under the Securities Act in compliance with Rule 144 promulgated under the Securities Act ("Rule 144"), (iv) the Company is reasonably satisfied that the holder of such security shall, in accordance with the terms of Subsection (k) of Rule 144, be entitled to sell such security pursuant to such Subsection or (v) a letter or an order shall have been issued to the holder thereof by the staff of the Securities and Exchange Commission (the "SEC") or the SEC stating that no enforcement action shall be recommended by such staff or the SEC, as the case may be, if such security is transferred without registration under the Securities Act in accordance with the conditions set forth in such letter or order and such letter or order specifies that no subsequent restrictions on transfer are required. (b) Whenever the restrictions imposed by this Section 9.4 shall terminate, as herein above provided, the holder of any particular Share then outstanding as to which such restrictions shall have terminated shall be entitled to receive from the Company without expense to such holder, one or more new certificates for such Member's Shares not bearing the applicable restrictive legends set forth in Section 9.2. *9.5* *Compliance with Rule 144 and Rule 144A.* At the written request of any Member if such Member proposes to sell any of such Member's Shares in compliance with Rule 144, the Company shall furnish to such Member, within ten (10) days after receipt of such request, a written statement as to whether or not the Company is in compliance with the filing requirements of the SEC as set forth in such rule. For purposes of effecting compliance with Rule 144A, in connection with any resales of any Shares pursuant to the provisions of Rule 144A, such Member and each prospective institutional purchaser of such Shares designated by such Member shall have the right, at any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, to obtain from the Company, upon the written request of such Person and at the Company's expense the documents specified in Section (d)(4)(i) of Rule 144A, as such rule may be amended from time to time. *9.6* *Non-Applicability of Restrictions on Transfer.* Notwithstanding the provisions of this Section 9, any Member may from time to time transfer all or part of the Shares (i) to a nominee identified in writing to the Company as being the nominee of such Member, and any nominee of or for a beneficial owner of Shares identified in writing to the Company as being the nominee of or for such Member may from time to time transfer all or part of the Shares registered in the name of such nominee but held as nominee on behalf of such Member to such Member, (ii) to another Member or (iii) to an Affiliate of such Member; provided, however, that each such transferee shall comply with Section 9.8. *9.7* *Rights of Unadmitted Assignees.* A Person who acquires Shares but who is not admitted as a substituted Member pursuant to Section 9.8 hereof shall be entitled only to distributions with respect to such Shares in accordance with this Agreement, and shall have no right to any information or accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Operating Agreement. The transferor of any such unadmitted assignee shall remain a Member of the Company and shall be bound by all obligations and duties of Members hereunder. *9.8* *Admission of Substituted Members.* Subject to the other provisions of this Section 9, a transferee of Shares may be admitted to the Company as a substituted Member only upon satisfaction of the conditions set forth in this Section 9.8. If a transferee of Shares satisfies the conditions set forth in this Section 9.8, such transferee shall be deemed admitted to the Company as a Class A Member or Class B Member, as the case may be, where after the transferor shall be deemed withdrawn from the Company with respect to the Shares Transferred: (a) The transferee (other than, with respect to clauses (i) and (ii) below, a transferee in accordance with Section 9.6) shall, by written instrument in form and substance reasonably satisfactory to a majority of the Managers designated other than by the transferring Member or its Affiliates (the *"Transfer Managers"* ) (and, in the case of clause (iii) below, the transferor Member), (i) make representations and warranties to each of the nontransferring Members equivalent to those set forth in Section 6, (ii) accept and adopt the terms and provisions of this Agreement, including this Section 9, and (iii) assume the obligations of the transferor Member under this Operating Agreement with respect to the transferred Shares. The transferor Member shall be released from all such assumed obligations except (x) those obligations or liabilities of the transferor Member arising out of a breach of this Operating Agreement and, (y) in the case of a transfer to any Person other than a Member, those obligations or liabilities of the transferor Member based on events occurring, arising or maturing prior to the date of transfer; (b) Unless the requirements of this Section 9.8 have been waived by the Transfer Managers, the transferee pays or reimburses the Company for all reasonable legal, filing, and publication costs that the Company incurs in connection with the admission of the transferee as a Member with respect to the transferred Shares; and (c) If required by the Transfer Managers, the transferee (other than a transferee that was a Member prior to the transfer) shall deliver to the Company evidence of the authority of such Person to become a Member and to be bound by all of the terms and conditions of this Agreement, and the transferee and transferor shall each execute and deliver such other instruments as the Transfer Managers reasonably deem necessary or appropriate to effect, and as a condition to, such transfer, including amendments to the Certificate or any other instrument filed with the State of Delaware or any other state or governmental authority. *9.9* *Effect of Transfer on Company.* Notwithstanding the withdrawal of a Member incident to a transfer to a Person who becomes admitted pursuant to Section 9.8 hereof, the Members agree that in furtherance of Section 1.5 of this Agreement, the Company shall continue and be continued after such transfer. SECTION 10 POWER OF ATTORNEY *10.1* *Managers as Attorneys-In-Fact.* Each Member hereby makes, constitutes, and appoints its designated Manager, severally, with full power of substitution and resubstitution, its true and lawful attorney-in-fact for it and in its name, place, and stead and for its use and benefit, to sign, execute, certify, acknowledge, swear to, file, publish and record (i) all certificates of formation, amended name or similar certificates, and other certificates and instruments (including counterparts of this Operating Agreement) which the Management Committee may deem necessary to be filed by the Company under the laws of the State of Delaware or any other jurisdiction in which the Company is doing or intends to do business; (ii) any and all duly authorized amendments, restatements or changes to this Operating Agreement and the instruments described in clause (i), as now or hereafter amended, which the Management Committee may deem necessary to effect a change or modification of the Company in accordance with the terms of this Operating Agreement, including, without limitation, amendments, restatements or changes to reflect (A) the admission of any substituted Member and (B) the disposition by any Member of its interest in the Company; (iii) all certificates of cancellation and other instruments which the Liquidator deems necessary or appropriate to effect the dissolution and termination of the Company pursuant to the terms of this Operating Agreement and (iv) any other instrument which is now or may hereafter be required by law to be filed on behalf of the Company or is deemed necessary by the Management Committee to carry out fully the provisions of this Operating Agreement in accordance with its terms. Each Member authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary in connection with any of the foregoing, hereby giving each such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite to be done in connection with the foregoing as fully as such Member might or could do personally, and hereby ratify and confirm all that any such attorney-in-fact shall lawfully do, or cause to be done, by virtue thereof or hereof. *10.2* *Nature of Special Power.* The power of attorney granted to each Manager pursuant to this Section 10: (a) Is a special power of attorney coupled with an interest and is irrevocable; (b) May be exercised by any such attorney-in-fact by listing the Members executing any agreement, certificate, instrument, or other document with the single signature of any such attorney-in-fact acting as attorney-in-fact for such Members; and (c) Shall survive and not be affected by the subsequent Bankruptcy, insolvency, dissolution, or cessation of existence of a Member and shall survive the delivery of an assignment by a Member of the whole or a portion of its interest in the Company (except that where the assignment is of such Member's entire interest in the Company and the assignee, with the consent of the other Members, is admitted as a substituted Member, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling any such attorney-in-fact to effect such substitution) and shall extend to such Member's or assignee's successors and assigns. SECTION 11 DISSOLUTION AND WINDING UP *11.1* *Dissolution Events.* (a) Dissolution. The Company shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a *"Dissolution Event"* ):
	(i) The unanimous vote of the Members to dissolve, wind up, and liquidate the Company; (ii) A judicial determination that an event has occurred that makes it unlawful, impossible or not reasonably practicable to carry on the business of the Company; (iii) The failure of the Purchasing Members to purchase Shares when required in accordance with Section 11.7; (iv) The occurrence of June 30, 2002; and (v) The date on which an Optional Liquidation Notice becomes effective to cause an Optional Liquidation Event to become a Dissolution Event.:
(b) Consideration; Merger, etc. Neither (i) the consolidation nor merger of the Company with or into one or more other limited liability companies, corporations or other entities where the Company is the surviving entity, nor the sale or lease of all or substantially all of the assets of the Company or (ii) the death, retirement, resignation, expulsion, Bankruptcy or dissolution of a Member, or the occurrence of any other event which terminates the continued membership of a Member in the Company under the Act, shall in and of itself cause or be deemed a dissolution or cause the winding up of the affairs of the Company within the meaning of this Section 11. Upon the occurrence of any such event, the business of the Company shall be continued without dissolution. *11.2* *Winding Up.* Upon the occurrence of a Dissolution Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company's business and affairs; provided that all covenants contained in this Operating Agreement and obligations provided for in this Operating Agreement shall continue to be fully binding upon the Members until such time as the Property has been distributed pursuant to this Section 11.2 and the Certificate has been canceled pursuant to the Act. The Liquidator shall be responsible for overseeing the winding up and dissolution of the Company, which winding up and dissolution shall be completed within ninety (90) days of the occurrence of the Dissolution Event. The Liquidator shall take full account of the Company's liabilities and Property and shall cause the Property or the proceeds from the sale thereof (as determined pursuant to Section 11.6), to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order: (a) First, to creditors (including Members and Managers who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Company's Debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for which reasonable provision for payment has been made and liabilities for distribution to Members under Section 18-601 or 18-604 of the Act; (b) Second, to the holder of Class A Preferred, an amount equal to the greater of (i) the lesser of (A) such Class A Preferred's Liquidation Preference, plus all accrued and unpaid distributions to the date fixed for such distribution that have not yet been included in the Liquidation Preference or (B) the net assets of the Company or (ii) the sum of three percent (3%) of the net fair market value of the Company plus the amount of all accrued quarterly distributions that have not been paid in cash (including those reflected in the Liquidation Preference) to the date fixed for such distribution. (c) Third, to the holders of Class B Preferred, an amount per Share equal to such Class B Preferred's Liquidation Preference, plus all accrued and unpaid distributions to the date fixed for such distribution (if the assets legally available to be distributed to the holders of the Class B Preferred are insufficient to permit the payment to such holders of their full preferential amount, the assets legally available to be distributed shall be distributed ratably among the holders of Class B Preferred in proportion to the full preferential amount each such holder is otherwise entitled to receive); and (d) Fourth, to the holders of Common Shares all remaining amounts shared equally, Share for Share. *11.3* *Rights of Members.* Except as otherwise provided in this Agreement, each Member shall look solely to the Property of the Company for the return of its investment and has no right or power to demand or receive Property other than cash from the Company. If the assets of the Company remaining after payment or discharge of the Debts or liabilities of the Company are insufficient to return such investment, the Members shall have no recourse against the Company or any other Member or Manager. *11.4* *Notice of Dissolution/Termination.* (a) In the event a Dissolution Event occurs, the Liquidator shall, within thirty (30) days thereafter, provide written notice thereof to each of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Liquidator) and shall publish notice thereof in a newspaper of general circulation in each place in which the Company regularly conducts business (as determined in the discretion of the Liquidator). (b) Upon completion of the distribution of the Company's Property as provided in this Section 11, the Company shall be terminated, and the Liquidator shall cause the filing of the Certificate of Cancellation pursuant to Section 18-203 of the Act and shall take all such other actions as may be necessary to terminate the Company. *11.5* *The Liquidator.* (a) *Definition* . The *"Liquidator"* shall mean a Person appointed by the Management Committee to oversee the dissolution of the Company and shall have the power of attorney granted to the Managers pursuant to Section 10. (b) *Fees* . The Company is authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this Section 11 and to reimburse the Liquidator for its reasonable costs and expenses incurred in performing those services, other than a Liquidator that is also a Member or Manager. (c) *Indemnification* . The Company shall indemnify, save harmless, and pay all judgments and claims against such Liquidator or any officers, directors, stockholders, agents or employees of the Liquidator relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Liquidator, or any officers, directors, stockholders, agents or employees of the Liquidator in connection with the winding up of the Company, including reasonable attorneys' fees incurred by the Liquidator, officer, director, stockholder, agent or employee in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, except to the extent such liability or damage is caused by the fraud, intentional misconduct of, or a knowing violation of the laws by the Liquidator which was material to the cause of action. *11.6* *Form of Liquidating Distributions.* For purposes of making distributions required by Section 11.2 hereof, the Liquidator may determine whether to distribute all or any portion of the Property in-kind or to sell all or any portion of the Property and distribute the proceeds therefrom. *11. 7* *Optional Liquidation Events/Purchase Option.* (a) *Optional Liquidation Events* . In the event that any of the following events ( *"Optional Liquidation Events"* ) shall occur and be continuing, the holder of the Class A Preferred shall have the rights described in Section 11.7(b) hereof
	(i) The Company shall fail to make a payment on a Payment Date as it is obligated to by this Operating Agreement with respect to Class A Preferred and, with respect to a distribution in cash, such failure continues for ten (10) Business Days; (ii) At any time that the Class A Preferred is issued and outstanding, there shall occur a Change of Control of the Company; (iii) The Class A Member becomes subject to regulation under the Public Utility Holding Company Act of 193 5, as amended, as a result of PCI and any of its affiliates being a Member, or the Company becomes subject to such regulation and as a result thereof its ability to conduct its business in the ordinary course is materially adversely affected; (iv) The occurrence of the events described in Sections 10.8(a)(ii)(B), 10.8(a)(ii)(C), 10.8(a)(ii)(D) and 10.8(a)(ii)(F) of the RAMP Investments Operating Agreement which Sections are herein incorporated by reference. (v) The Management Committee shall fail in any material respect to perform or observe any material term, covenant or obligation on its part to be performed or observed under this Agreement if (1) such failure is capable of being cured and is not cured within ninety (90) days of the Management Committee receiving notice of such failure, and (2) such failure has a material adverse effect on the economic interests of the AM-BT; provided that such failure cannot be caused as a result of the Manager designated by the Class A Member failing to vote in accordance with the other Managers in any matter which requires the unanimous approval of the Managers. (vi) PCI or any Affiliate thereof shall default on (i) a payment of principal or interest on any PCI Note, if such default is not cured within five (5) Business Days or (ii) other obligations under any PCI Note, if such default capable of being cured within thirty (30) days and is not cured within. thirty (30) days.
(b) *Optional Liquidation Notice.* At any time on or after the occurrence of an Optional Liquidation Event, the holder of record of Class A Preferred may elect to cause such Optional Liquidation Event to result in a Dissolution Event by delivering notice (an *"Optional Liquidation Notice"* ) of such election by registered mail (return receipt requested), postage prepaid, to the Management Committee (such holder of Class A Preferred having delivered an Optional Liquidation Notice, a *"Notice Member"* ). An Optional Liquidation Notice shall be effective to cause an Optional Liquidation Event to become a Dissolution Event on the thirtieth (30th) day following such delivery, provided that the Notice Member may rescind an Optional Liquidation Notice delivered by it by delivering a notice (a *"Rescission Notice"* ) prior to such thirtieth (30th) day and an Optional Liquidation Notice will automatically be deemed rescinded upon the election within such thirty (30) day period by any Purchasing Member to purchase the Class A Preferred. (c) *Purchase Option* . In the event that the holder of Class A Preferred has delivered an Optional Liquidation Notice to the Management Committee, any one or more of the holders of Common Shares or their designees (each a *"Purchasing Member"* ) may, within thirty (30) days after the date on which such Optional Liquidation Notice was delivered, elect to purchase the Class A Preferred by delivering notice of such election to the Notice Member. (d) *Purchase Price/Payment.*
	(i) The price ( *"Purchase Price"* ) for the Class A Preferred shall be equal to the greater of (i) the lesser of (A) such Class A Preferred's Liquidation Preference, plus all accrued and unpaid distributions to the date fixed for such distribution or purchase that have not been included in Liquidation Preference or (B) the net assets of the Company or (ii) the sum of three percent (3%) of the net fair market value of the Company plus the amount of all accrued quarterly distributions that have not been paid in cash (including those reflected in the Liquidation Preference) to the date fixed for such distribution. (ii) On the date which is forty (40) days after the date on which an Optional Liquidation Notice was delivered (the *"Closing Date"* ), the Purchasing Members shall pay to the Notice Member, by wire transfer of immediately available funds to such account as is designated by the Notice Member, the aggregate Purchase Price for the Class A Preferred. Each Purchasing Member shall be obligated to pay that portion of the Purchase Price equal to the ratio of the number of such Member's Common Shares to all Common Shares.
(e) *Closing* . The closing of the purchase and sale of the Class A Preferred shall occur on the Closing Date at such place as is mutually agreeable to the Notice Member and the Purchasing Members, or upon the failure to agree, at the principal place of business of the Company. On the Closing Date, the Notice Member shall deliver to the Purchasing Members good title, free and clear of any liens, claims, encumbrances, security interests or options, to the Class A Preferred thus purchased. On the Closing Date, the Members shall execute such documents and instruments of conveyance as may be necessary or appropriate to effectuate the transfer contemplated hereby, including the preparation of a new certificate for the Class A Preferred so transferred. (f) *Failure to Close.* In the event that the Notice Member fails to deliver title to the Class A Preferred on the Closing Date or otherwise fails to comply with this Section 11.7, a Rescission Notice shall be deemed to have been delivered to the Management Committee on or before the thirtieth (30th) day following delivery of the Optional Liquidation Notice and in such event the Notice Member shall continue to have the right pursuant to Section 11.7(b) hereof to elect to cause any Optional Liquidation Event to result in a Dissolution Event by delivering an Optional Liquidation Notice to the Management Committee. SECTION 12 MISCELLANEOUS *12.1* *Notices.* Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered, given, and received for all purposes (i) if delivered personally to the Person or to an officer of the Person to whom the same is directed or (ii) when the same is actually received, if sent either by registered or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by registered or certified mail, postage and charges prepaid, addressed as follows, or to such other address as such Person may from time to time specify by notice to the Members and Management Committee: (a) If to the Company, to the address determined pursuant to Section 1.4 hereof; (b) If to the Managers, to the addresses set forth in Section 4.1 hereto; (c) If to a Member, to the address set forth in Section 2.1 hereof, and (d) If to the Management Committee, to the address of the Company as provided in Section 12. 1(a). *12.2* *Binding Effect.* Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns. *12.3* *Certificates of Shares.* A certificate or certificates for Shares shall be issued to each Member when any of the Shares are acquired by such Member. All certificates shall be signed by any Manager. In case any Manager who shall have signed, or whose facsimile-signature shall have been used on, any certificate or certificates shall cease to be a Manager of the Company, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Company, the certificate or certificates may nevertheless be adopted by the Company and be issued and delivered as though the person who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be a Manager. *12.4* *Lost Certificates.* The Management Committee may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Company alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the Person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Management Committee may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates, or the Member's legal representative, to advertise the same in any manner as it shall require or give the Company a bond in any sum as it may direct as indemnity against any claim that may be made against the Company with respect to the certificate alleged to have been lost or destroyed, or both. *12.5* *Construction.* Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Member. *12.6* *Time.* In computing any period of time pursuant to this Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included, but the time shall begin to run on the next succeeding day. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run until the end of the next day which is not a Saturday, Sunday or legal holiday. *12. 7* *Headings.* Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof. *12.8* *Severability.* Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The preceding sentence of this Section 12.8 shall be of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Member to lose the material benefit of its economic bargain. *12.9* *Incorporation by Reference.* No exhibit, schedule, or other appendix attached to this Agreement and referred to herein is incorporated in this Agreement by reference unless this Agreement expressly otherwise provides. *12.10* *Variation of Terms.* All terms and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require. *12.11* *Governing Law.* The laws of the State of Delaware shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties arising hereunder. *12.12* *Waiver of Jury Trial.* Each of the Members irrevocably waives, to the extent permitted by law, all rights to trial by jury and all rights to immunity by sovereignty or otherwise in any action, proceeding or counterclaim arising out of or relating to this Agreement. *12.13* *Counterpart Execution.* This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement. *12.14* *Specific Performance.* Each Member and Manager agrees with the other Members and Managers that the other Members would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the nonbreaching Members may be entitled, at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof. *12.15* *Engagement in Holding Company Eligible Activities and Investment in Holding Company Eligible Assets.* (a) It is the intention of the Members that the Company will engage only in Holding Company Eligible activities and will invest only in Holding Company Eligible assets. In furtherance therewith, the Members hereby acknowledge that the Company is subject to federal banking laws and regulations and to supervision and examination by the Board of Governors of the Federal Reserve System. (b) In the event that it becomes unlawful or otherwise prohibited for any of the Members to continue to be members of the Company or any of the Members become subject to federal banking laws and regulations which materially restrict such Member's ability to conduct its business in the ordinary course, to the extent possible, the Members agree to negotiate in good faith to amend this Agreement so as to comply with any legal and/or regulatory requirements and to minimize the adverse financial impact of such laws or regulations. *12.16* *No Material In2pairntent.* No Member shall take any action that could impair materially such Member's ability to perform its duties and obligations under this Agreement. IN WITNESS WIIEREOF , the parties have executed and entered into this Operating Agreement of the Company as of the day first above set forth. [signatures follow on separate pages]

	MEMBERS: AM-BT NEVADA, INC. By: /s/ THOMAS FINLEY Title: Attorney-in-Fact
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF AMP FUNDING, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MEMBER.
	MEMBERS (CONTINUED): POTOMAC CAPITAL INVESTMENT CORPORATION By: /s/ WM. SHAPIRO Title: President
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF AMP FUNDING, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MEMBER.
	MANAGERS: /s/ WM. SHAPIRO William Dana Shapiro Title: Manager
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF AMP FUNDING, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MANAGER
	MANAGERS (CONTINUED): /s/ GARY R. CORRELL Gary R. Correll
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF AMP FUNDING, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MANAGER
	MANAGERS (CONTINUED): /s/ LESLIE C. ZIMBERG Leslie C.Zimberg Title: Manager
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF AMP FUNDING, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MANAGER
	MANAGERS (CONTINUED): James H. Stallkamp By: /s/ THOMAS FINLEY Thomas Finley, Attorney-in-Fact
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF AMP FUNDING, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MANAGER

SCHEDULE A TO OPERATING AGREEMENT OF AMP FUNDING, L.L.C.
Year	Aircraft	Serial Number	FAA Reg. #	Gross Asset Value
1976	Boeing 747-200B	21162	N51IP	16,069,344
1974	Lockheed L-1011-100	1098	N81025	2,725,978
1975	Lockheed L-1011-100	1104	N81026	2,826,985
1975	Lockheed L-1011-100	1108	N81028	2,826,985
1975	Lockheed L-1011-100	1111	N31030	2,826,986
TOTALS				27,276,278
AIMC STOCK				212,307,137
GRAND TOTAL				239,583,415

EXHIBIT A TO OPERATING AGREEMENT OF AMP FUNDING, L.L.C. Aircraft Lease Documents The following documents are the "Aircraft Lease Documents" referred to in the Operating Agreement:
1.	Assignment and Assumption Agreement No. 2, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N78019.
2.	Assignment and Assumption Agreement No. 2, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N490US.
3.	Assignment and Assumption Agreement No. 2, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N493US.
4.	Assignment and Assumption Agreement No. 2, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N164UA.
5.	Assignment and Assumption Agreement No. 2, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N83870.
6.	Assignment and Assumption Agreement No. 2, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. N165UA.
7.	Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N511P.
8.	Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N31030.
9.	Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81026.
10.	Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81025.
11.	Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81028.
12.	Assignment and Assumption Agreement No. 2, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. TF-ABZ.
13.	Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N511P.
14.	Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N31030.
15.	Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81026.
16.	Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81025.
17.	Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81028.
18.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. TF-ABZ.
19.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N19072.
20.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N76073.
21.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N14063.
22.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N78019.
23.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81027.
24.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. SE-DPX..
25.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. SE-DPP.
26.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from RAMP Investments L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N490US.
27.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N493US.
28.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N164UA.
29.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from AMP Funding, Inc., as Assignor, to RAMP Investments L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N68065.
30.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N83870.
31.	Assignment and Assumption Agreement No. 3, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N165UA.
32.	Assignment and Assumption Agreement No. 4, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N19072.
33.	Assignment and Assumption Agreement No. 4, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N76073.
34.	Assignment and Assumption Agreement No. 4, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N14063.
35.	Assignment and Assumption Agreement No. 4, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating-to the Aircraft bearing FAA Registry No. N81027.
36.	Assignment and Assumption Agreement No. 4, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. SE-DPX..
37.	Assignment and Assumption Agreement No. 4, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. SE-DPP.
38.	Assignment and Assumption Agreement No. 4, dated as of November _, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N68065.
39.	Consent, Waiver and Agreement N76073, dated as of November _, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
40.	Consent, Waiver and Agreement N14063, dated as of November _, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
41.	Consent, Waiver and Agreement N19072, dated as of November _, 1995, among(i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
42.	Consent, Waiver and Agreement N68065, dated as of November _, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
43.	Consent, Waiver and Agreement N83870, dated as of November _, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
44.	Consent, Waiver and Agreement N165UA, dated as of November _, 1995, among (i) United Air Lines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
45.	Consent, Waiver and Agreement N164UA, dated as of November _, 1995, among (i) United Air Lines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
46.	Consent, Waiver and Agreement N493 US, dated as of November _, 1995, among (i) USAir, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
47.	Consent, Waiver and Agreement N78019, dated as of November _, 1995, among (i) Continental Micronesia Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
48.	Consent, Waiver and Agreement N490US, dated as of November _, 1995, among (i) USAir, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
49.	Consent, Waiver and Agreement N81027, dated as of November _, 1995, among (i) Trans World Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
50.	Consent, Waiver and Agreement SE-DPX, dated as of November _, 1995, among (i) Internationale Nederlanden Aviation Lease B.V., (ii) Internationale Nederlanden Lease Holding N.V., (iii) Potomac Capital Investment Corporation, (iv) AMP Funding, L.L.C., (v) RAMP Investments, L.L.C. and (vi) PCI Air Management Partners, L.L.C.
51.	Consent, Waiver and Agreement SE-DPP, dated as of November _, 1995, among (i) Internationale Nederlanden Aviation Lease B.V., (ii) Internationale Nederlanden Lease Holding N.V., (iii) Potomac Capital Investment Corporation, (iv) AMP Funding, L.L.C., (v) RAMP Investments, L.L.C. and (vi) PCI Air Management Partners, L.L.C.
52.	Consent, Waiver and Agreement N493US, dated as of November _, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
53.	Consent, Waiver and Agreement N164UA, dated as of November _, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
54.	Consent, Waiver and Agreement N165UA, dated as of November _, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
55.	Consent, Waiver and Agreement N490US, dated as of November _, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
56.	Consent, Waiver and Agreement N83870, dated as of November _, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
57.	Consent, Waiver and Agreement N 164UA, dated as of November _, 1995, among (i) The Bank of New York, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
58.	Consent, Waiver and Agreement N78019, dated as of November _, 1995, among (i) Wilmington Trust Company, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
59.	Consent, Waiver and Agreement N165UA, dated as of November _, 1995, among (i) The Nippon Credit Bank, Ltd., Los Angeles Agency, as Agent and Lender, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
60.	Consent, Waiver and Agreement N165UA, dated as of November _, 1995, among (i) Den Norske Bank AS, London Branch, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
61.	Consent, Waiver and Agreement N164UA, dated as of November _, 1995, among (i) The United Bank of Kuwait PLC, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
62.	Consent, Waiver and Agreement N164UA, dated as of November _, 1995, among (i) National Canada Corporation, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.

EXHIBIT B FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this *"Agreement"* ), dated as of November 13, 1995, is being made, executed and delivered by and among AMP FUNDING, L.L.C., a Delaware limited liability company ( *"Assignor"* ), RAMP INVESTMENTS, L.L.C., a Delaware limited liability company ( *"Assignee"* ), and POTOMAC CAPITAL JOINT LEASING CORPORATION, a Delaware corporation ( *"PCJL"* ). W I T N E S S E T H WHEREAS , Assignor is the sole obligor under a loan from PCJL in the principal amount of $233,000,000.00 as evidenced by a promissory note from Assignor to PCJL (the *"Note"* ); and WHEREAS , Assignor proposes to assign to Assignee Assignor's obligations under the Note and Assignee proposes to assume all such obligations, in accordance with the terms of this Agreement; and WHEREAS , PCJL wishes to acknowledge and consent to the assignment and assumption contemplated by this Agreement. AGREEMENT NOW, THEREFORE , in consideration of the recitals set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Assignment of Obligations. Assignor hereby assigns, transfers, delegates and delivers to Assignee all of Assignor's obligations (and related rights) under the Note (the *"Assigned Obligations"* ); provided, however , Assignor shall hold harmless Assignee from any and all liability for accrued but unpaid interest on the Note as of the date hereof (the *"Retained Liability"* ). *SECTION 2. Assignment of Obligations* .** Assignee hereby assumes and agrees to pay, discharge, fulfill or perform all of the Assigned Obligations and hereby releases, discharges and agrees to hold harmless Assignor from any performance of the Assigned Obligations, in each instance other than the Retained Liability. SECTION 3. Consent and Acknowledgment . PCJL hereby acknowledges and consents to the assignment to, and assumption by, Assignee of the Assigned Obligations. SECTION 4. Representations and Warranties.
	(a)	There are no defaults under the Note, and no event has occurred which, with notice and/or the passage of time, would constitute a default under the Note.
	(b)	A true and correct copy of the Note is attached hereto as Exhibit A and none of the terms or provisions of the Note has been modified, amended or waived.
	(c)	No installment of principal and interest is due and owing under the Note.
	(d)	There are no unpaid late charges or other penalties due and owing on the Note.
	(e)	PCJL continues to be the holder of the Note, and payments are to be made by PCJL made at 1 Rodney Square, Wilmington, Delaware.
SECTION 5. Release. PCJL hereby releases Assignor for any and all liability under the Note except for the Retained Liability. SECTION 6. Further Assurances . From time to time, at the request of any party hereto and without further consideration, each party, at its own expense, will execute and deliver such other documents, and take such other actions, as any other party may reasonably request to effect the transactions contemplated hereby, to consummate the assumption of the Assigned Obligations. SECTION 7. Delivery of New Note . At the request of PCJL and upon the surrender of the Note to Assignee, Assignee shall execute a new promissory note evidencing the Assumed Obligations in substantially the form of the Note. SECTION 8. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to its conflict of law doctrines). IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.
			AMP FUNDING, L.L.C. By: ______________________________ Name: Title:
			RAMP INVESTMENTS,, L.L.C. By: PCI AIR MANAGEMENT CORPORATION By: ______________________________ Name: Title:

	EXHIBIT A FORM OF PROMISSORY NOTE
$233,000,000.00			November 13, 1995
For value received, the undersigned (the *"Maker"* ) promises to pay to Potomac Capital Joint Leasing Corporation, a Delaware corporation ( *"PCJL"* ), the amount of TWO HUNDRED THIRTY-THREE MILLION DOLLARS AND NO CENTS ($233,000,000.00), together with interest thereon at a rate per annum equal to seven and three-eighths percent (7.375%), in legal and lawful money of the United States of America. Accrued interest shall be payable with each installment of principal. Interest shall be computed based on the premise that a year contains 360 days consisting of twelve (12) months of thirty (30) days each and shall be charged on a per diem basis. This Note is due and payable on June 1, 2002 (the *"Maturity Date"* ). This Note may be prepaid, in whole or in part, by the Maker without prepayment penalty. It is expressly provided that upon default in the punctual payment of this Note or any part hereof, as the same shall become due and payable, the entire indebtedness evidenced hereby shall mature, at the option of the holder. In the event this Note, or any part hereof, is collected through bankruptcy or other judicial proceedings by an attorney or is placed in the hands of an attorney for collection after maturity, then the undersigned agrees and promises to pay reasonable attorneys' fees for collection. The Maker expressly waives all notices, demands for payment upon the Maturity Date, presentation for payment, protest and notice of protest, as to this Note, and consents that the payee or other holder of this Note may at any time, and from time to time, upon request of or by agreement with the Maker, extend the maturity hereof or change the time or method of payments hereunder. The Maker of this Note further waives any right to plead the statute of limitations as a defense to any demand upon this Note and, in the event such waiver is declared invalid, Maker hereby agrees to extend the applicable statute of limitations for a period of four years from the date of expiration of the time limited for commencement of an action upon this Note by the applicable statute of limitations. This Note and a promissory note of like tenor in the amount of $35,000,000 are issued in amendment and restatement of that certain promissory note dated October 18, 1995 of Maker in the amount of $268,000,000, which prior note is superseded in its entirety by this note and such other note and has been returned to maker in exchange herefor and therefor. This Note shall be governed by the laws of the State of New York.
		POTOMAC CAPITAL INVESTMENT CORPORATION By: ______________________________ Name: Title:

EXHIBIT C

FORM OF CONTRIBUTION AGREEMENT

dated as of

November 13, 1995

between

AMP FUNDING, L.L.C.

Contributor

and

RAMP INVESTMENTS, L.L.C.

Contributee

_______________________________________________________________

CONTRIBUTION AGREEMENT THIS CONTRIBUTION AGREEMENT (this " Agreement ") dated as of November 13, 1995, between AMP Funding, L.L.C., a limited liability Company organized under the laws of the State of Delaware (the " Contributor "), and RAMP Investments, L.L.C. a limited liability company organized under the laws of the State of Delaware (the " Contributee "). RECITALS The Contributor wishes to contribute to the Contributee effective as of November 13, 1995 (the " Original Contribution Date ") the Original Assets (as defined in Section 1.01(a) below), and the Contributee has agreed to accept such contribution, subject to the terms and conditions of this Agreement. On or before the 90 ^th day after the Original Contribution Date, the Contributor wishes to contribute to the Contributee effective as of a date agreed on by the parties (the " Additional Contribution Date " and together with the Original Contribution Date, a "Contribution Date") all or a portion of the Additional Assets (as defined in Section 1.01(b) below), subject to the terms and conditions of this Agreement. In consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, the Contributor and the Contributee hereby agree as follows: ARTICLE 1. CONTRIBUTION OF ASSETS 1.01 Contribution of Assets . (a) Subject to the terms and conditions of this Agreement, on the Original Contribution Date, the Contributor shall assign and deliver to the Contributee all of its right, title and interest in and to the following:
(i)		all of the outstanding shares (the " AIMC Shares ") of common stock of Aircraft International Management Corporation, a Delaware corporation (" AIMC ");
(ii)		the Trust Agreements described in Schedule 1.01(a) attached hereto (the " Original Trust Agreements ");
(iii)		each of the trusts created under the Original Trust Agreements and each Trust Estate (as defined in each of the Original Trust Agreements); and
(iv)		any existing deposits, reserve accounts, or receivables held under or pursuant to any of the foregoing (all such right, title and interest in the agreements and property referred to in clauses (i) through (iv) collectively, the " Original Assets ").
(b) Subject to the terms and conditions of this Agreement, on the Additional Contribution Date, the Contributor shall assign and deliver to the Contributee all of its right, title and interest in and to all or a portion (provided such portion consists of all of the following assets related to any Trust Estate included in such portion) of the following:
(i)		the Trust Agreements described in Schedule 1.01(b) attached hereto (the " Additional Trust Agreements " and together with the Original Trust Agreements, the " Trust Agreements ");
(ii)		each of the trusts created under the Additional Trust Agreements and each Trust Estate (as defined in each of the Additional Trust Agreements); and
(iii)		any existing deposits, reserve accounts, receivables held under or pursuant to any of the foregoing (all such right, title and interest in the agreements and property referred to in clauses (i) through (iii) collectively, the " Additional Assets " and together with the Original Assets, the " Assets ").
No contributions of Additional Assets shall occur pursuant hereto after the 90 ^th day after the date hereof. All rents and other amounts payable to lessor under the three aircraft leases subject to the Additional Trust Agreements in items 6, 9 and 10 of Part II of Schedule 1.01(c) hereof shall accrue to Contributee from and after November 30, 1995, regardless of when the Additional Contribution Date for such Additional Trust Agreements occurs and, to the extent of any payment thereof to Contributor on or prior to the Additional Contribution Date, Contributor shall contribute such amount to Contributee on the Additional Contribution Date for such Additional Assets. (c) The assignment of the Assets pursuant to Section 1.01(a) and (b) shall be evidenced by the Assignment and Assumption Agreements described in Schedule 1.01(c) attached hereto (collectively, the " Assignment Agreements ") which shall be effective as of the Original Contribution Date or any Additional Contribution Date, as the case may be, and delivered by the Contributor on the Original Contribution Date or any Additional Contribution Date, as the case may be. (d) In the event the Contributor is unable to obtain all relevant consents to the transfer contemplated by any of the Assignment Agreements listed in Part II of Schedule 1.01(c), the Contributor, with the prior written consent of each of the parties specified in Section 5.01 hereof, may substitute for any of the Aircraft listed in Schedule 1.01(d) hereto any other Trust Agreement (and all related property, rights, instruments and agreements) relating to an aircraft of comparable value as the Aircraft being substituted. ARTICLE 2. EVENTS OCCURRING ON THE CONTRIBUTION DATE 2.01 Deliveries by Contributor . In addition to the Assets to be contributed to the Contributee on a Contribution Date, the Contributor shall deliver the following to the Contributee on the Contribution Date, each in form and substance satisfactory to the Contributee and, unless otherwise agreed in writing by the Contributee, dated the Contribution Date:
(i)	A copy of the resolutions of the Contributor's members, certified by the executive manager of the Contributor, authorizing or ratifying its execution, delivery and performance of this Agreement, each Assignment Agreement and the other documents to be delivered hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby;
(ii)	A certificate of all of the members of the Contributor certifying (a) the names and true signatures of the executive manager of the Contributor authorized to sign this Agreement, each Assignment Agreement and the other documents to be delivered hereunder and thereunder and (b) that attached thereto are true and correct copies of the Contributor's articles of organization and operating agreement, in each case as in effect on the Contribution Date;
(iii)	Favorable opinions of counsel for the Contributor; and
(iv)	Such other approvals, opinions and documents as the Contributee may reasonably request as to the legality, validity, binding effect or enforceability of this Agreement or any Assignment Agreement.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR Contributor hereby represents and warrants as of each Contribution Date that: 3.01 Title to Assets . The Contributor has good and marketable title to all of the Assets transferred on such Contribution Date free and clear of all obligations, liens, pledges, claims, rights of first refusal, options, charges, security interests, mortgages or other encumbrances of any nature whatsoever (collectively, the " Asset Encumbrances "), other than any Asset Encumbrance arising solely in favor of the Contributee from the transactions contemplated hereby and by the Assignment Agreements. 3.02 Organization . The Contributor is a limited liability company validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties and assets now owned or leased by it or the nature of the business transacted by it requires it to be so qualified, except where the failure to be so qualified, individually or in the aggregate, would not have a material adverse effect upon the business or financial condition of the Contributor or upon the transactions contemplated by this Agreement. 3.03 Authority . The Contributor has the power and authority to carry on its business as now conducted, to own or hold under lease its properties, and to execute and deliver this Agreement and each Assignment Agreement and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Contributor of this Agreement and each Assignment Agreement have been duly authorized by all necessary action; and each of this Agreement and each Assignment Agreement has been duly executed and delivered by the Contributor and is the legal, valid and binding obligation of the Contributor enforceable against the Contributor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, receivership, conservatorship, reorganization, liquidation, moratorium or similar events affecting the Contributor or its assets, or by general principles of equity. 3.04 No Consents: No Violations . (a) No authorization, approval or other action by, and no notice to or filing with, any governmental, regulatory or legal authority or any other person is required for the due execution, delivery and performance by the Contributor of this Agreement or any Assignment Agreement or the consummation of the transactions contemplated hereby or thereby. (b) The execution, delivery and performance of this Agreement and any Assignment Agreement and the consummation of the transactions contemplated hereby and thereby do not and will not result in any contravention of (i) the articles of organization or operating agreement of the Contributor or the articles of incorporation or by-laws of AIMC, (ii) any applicable law, rule or regulation of any Federal, state or local governmental or regulatory authority, (iii) any order, writ, injunction, judgment, decree or award of any court, arbitrator, or governmental or regulatory authority to which the Contributor or AIMC or any of their properties are subject, (iv) any mortgage, contract, agreement, deed of trust, license, lease or other instrument, arrangement, commitment, obligation, understanding or restriction of any kind to which the Contributor or AIMC is a party or by which any of their properties are bound, or (v) the Operative Documents (as defined in Section 3.06(a) below). 3.05 Litigation . Other than as disclosed in writing to the parties hereto by the Contributor, there is no pending or known threatened action or proceeding before any court, governmental agency or arbitrator by or against, or involving the Contributor or any of its Affiliates, any of its property or any of its members, managers or employees which questions or challenges the validity or enforceability of this Agreement or any Assignment Agreement, or any action taken or to be taken by the Contributor pursuant to this Agreement or any Assignment Agreement or in connection with the transactions contemplated hereby or thereby. 3.06 Representations Regarding Documents . (a) This Agreement, the Trust Agreements, the Assignment Agreements and the Assigned Documents (as defined in the related Assignment Agreement) (collectively, the " Operative Documents ") constitute all of the material agreements to which the Contributor, the applicable Trustee (as defined in the applicable Trust Agreement) and/or the applicable Lessee (as defined in the applicable Lease), if any, is a party relating to each of the Aircraft (as listed on Schedule 3.06 hereto) that remain in full force and effect as of the Contribution Date. Each such Operative Document is in full force and effect and has not been modified or amended. (b) Each Trust Estate is free and clear of any Asset Encumbrance created or incurred, directly or indirectly, by the Contributor, and, to the knowledge of the Contributor, each Trust Estate is free and clear of any Asset Encumbrance. (c) Each Trustee has good and marketable title to the applicable Aircraft in each case, free and clear of any Asset Encumbrance other than the Master Leasing Agreement dated as of November 13, 1995, by and among the applicable Trustee and PCI Air Management Partners, L.L.C., a Delaware limited liability company, any applicable sublease specified in an Assignment Document, and in the case of Aircraft bearing FAA Registration Nos. N164UA-and N165UA, the lien of the related Security Agreement (as defined in the applicable sublease). (d) There is no obligation or covenant to be performed by the Contributor under any Trust Agreement or any other Operative Document and no obligation or covenant of the Contributor which has accrued, on or prior to the date hereof which has not been fully performed, and Contributor shall indemnify and hold harmless the Contributee from and against any claim, loss, liability or expense incurred by Contributee attributable to any such obligation or covenant which has not been so performed or which has so occurred. (e) There are no defaults and no events which, with the giving of notice or lapse of time or both, would constitute a default by the Contributor under any Trust Agreement or any other Operative Document and to the knowledge of the Contributor, there are no material defaults and no events which, with the giving of notice or lapse of time or both, would constitute a default by any Trustee under any Trust Agreement or any other Operative Document to which any Trustee is a party. (f) All rent due and owing as of any Additional Contribution Date under any lease of any Aircraft included in the Trust Estate for any Trust Agreement contributed to Contributee on any Additional Contribution Date for any period subsequent to the date for payment under such lease has not, and will not have, been collected for more than one (1) month in advance and payment thereof has not, and on such Additional Contribution Date will not have, been anticipated, waived, released, discounted, set off or otherwise discharged or compromised; no supplemental rent has, or on such Additional Contribution Date will have, been paid or is or on such Additional Contribution Date will be due and owing under any such lease; and as of November 30, 1995, the aggregate amount of basic rent scheduled to be due and owing under the three aircraft lease agreements directly or indirectly included in the Additional Assets as items 6, 9 and 10 on Part II of Schedule 1.01(c) attached hereto (which three lease agreements are not covered by a master lease) is $384,389.00. 3.07 Solvency of Contributor . The Contributor was solvent immediately prior to the execution of this Agreement and will not, as a result of the transactions contemplated hereby, be rendered insolvent. 3.08 Obligations of the Contributor . Other than as specifically set forth in the Trust Agreements and the other Operative Documents, the Contributor has no obligations, duties or liabilities under or with respect thereto. 3.09 No Waiver . Except for consents to which the Contributee is a party and those listed on Schedule 3.09, the Contributor has not entered into or given any written waivers, consents, supplements, or modifications of the Trust Agreements or any other Operative Document and has not entered into or given any waivers or consents with respect to any of the Aircraft. 3.10 \ No Event of Loss . To the knowledge of the Contributor, neither an "Event of Loss" (as such term is defined in the applicable sublease) nor any event which with the passage of time would constitute such an Event of Loss has occurred with respect to the Aircraft covered by such sublease. 3.11 No Broker . Except for fees payable to Bankers Trust Company, the Contributor is not obligated to pay, and has not retained any broker or finder or other person who is entitled to, any broker's or finder's fee or other commission based upon the consummation of the transactions contemplated by this Agreement, any other Operative Agreement or any other agreement contemplated thereby. 3.12 AIMC Shares. (a) The authorized capital stock of AIMC consists of 10,000 shares of common stock (the " AIMC Common Stock "), par value $1.00 per share, of which 5,000 shares are issued and outstanding, all of which are the AIMC Shares and are owned of record and beneficially by Contributor. The-AIMC Shares have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive rights. There is no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge or other disposition of any shares of AIMC Common Stock or of any other capital stock of AIMC or any securities convertible into, or other rights to acquire, any such shares of AIMC Common Stock or other capital stock of AIMC or (ii) relates to the voting or control of such AIMC Common Stock, capital stock, securities or rights. No person has any right to require AIMC to register any of its securities under the Securities Act of 1933, as amended (the " Securities Act "). (b) AIMC is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as presently conducted. AIMC is duly qualified as a foreign corporation, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease requires it to be so qualified. Attached hereto as Exhibit 3.12b) is a complete and correct copy of AIMC's certificate of incorporation, as amended to date, certified by the Secretary of the State of Delaware, and AIMC's bylaws, as currently in effect. (c) The transfer of the AIMC Shares to Contributee pursuant to this Agreement will vest in Contributee legal and valid title to the AIMC Shares, free and clear of all Asset Encumbrances. (d) Attached as Exhibit 3.12(d)(i) is a copy of the unaudited balance sheet and income statement of AIMC as of October 31, 1995, which fairly presents the financial position and accurately reflects the assets and liabilities of AIMC as of such date. AIMC has no subsidiaries. AIMC has valid legal and beneficial title to all of the shares of preferred stock set forth on Exhibit 3.12(d)(ii) attached hereto free and clear of all Asset Encumbrances. As of the date hereof, AIMC has net worth of at least $212,000,000. (e) AIMC has no debts, obligations or liabilities of any kind or nature, either direct or indirect, absolute or contingent, matured or unmatured, known or unknown, including, without limitation, liabilities or obligations with respect to any federal, state, local and foreign income, franchise, excise, sales or use taxes. (f) AIMC has complied in all material respects with all laws, statutes, rules, regulations, judgments, decrees and orders applicable to its business or operations including, without limitation, any of the above which relate to the environment. ARTICLE 4. SURVIVAL OF REPRESENTATIONS: INDEMNIFICATION. 4.01 Survival . The representations and warranties of the Contributor contained in Article 3 hereof shall survive the Contribution Date and the delivery and acceptance of the Assignment Agreements. 4.02 Transfer Taxes . The Contributor shall pay, or cause to be paid, all sales taxes, use taxes, transfer taxes, and recording fees (and any interest and penalties related thereto "Taxes"), imposed on or applicable to the transfers of the Assets by (i) Contributor to Contributee pursuant to this Agreement, except for Taxes attributable solely to the actions or inactions of Contributee, (ii) Contributee to RAMP Investments, L.L.C., except for Taxes attributable solely to the actions or inactions of RAMP Investments, L.L.C., or (iii) RAMP Investments, L.L.C. to PCI Air Management Partners, L.L.C., except for Taxes attributable solely to the actions or inactions of PCI Air Management Partners, L.L.C. 4.03 Indemnification . Contributor shall indemnify and hold harmless the Contributee and PCI Air Management Partners, L.L.C. from and against any and all claims, losses, liabilities and damages, including, without limitation, amounts paid in settlement, reasonable costs of investigation and reasonable fees and disbursements of counsel, arising out of or resulting from the inaccuracy of any representation or warranty, or the breach of any covenant or agreement, contained herein or in any of the Assignment Agreements or in any instrument or certificate delivered pursuant hereto. ARTICLE 5. MISCELLANEOUS PROVISIONS 5.01 Amendment and Modification . This Agreement may be amended, modified or supplemented only by written agreement of the parties hereto and with the prior written consent of AM-BT Nevada, Inc. ("BT"). 5.02 Waiver of Compliance; Consents . Any failure of a party to comply with any obligation, covenant, agreement or condition herein may be waived by the other party; provided, however, that any such waiver may be made only by a written instrument signed by the party granting such waiver and consented to in writing by BT, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 5.02, with appropriate notice in accordance with Section 5.08 of this Agreement. 5.03 Assignment . This Agreement and all of the provisions hereof shall be binding upon the parties hereto and their respective successors and permitted assigns and shall inure to the benefit of BT,. the parties hereto, their respective successors and permitted assigns. Any party may assign any of its rights hereunder, but no such assignment shall relieve it of its primary liability for its obligations hereunder. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person other than BT, the parties hereto, any successors and permitted assigns any rights, remedy or claim under or by reason of this Agreement or any provision herein contained. 5.04 Expenses . In the event that the transactions contemplated by this Agreement are consummated, all fees and expenses (including all fees of counsel and accountants) incurred by any party in connection with the negotiation and execution of this Agreement and any Assignment Agreement shall be borne by the Contributor and BT. Any such fees and expenses not so authorized to be paid by the Contributor and BT shall be borne by the party who incurred them. 5.05 Further Assurances . From time to time, at the request of the Contributor or BT and without further consideration, each party, at its own expense, will execute and deliver such other documents, and take such other action, as the Contributor or the Contributee may reasonably request in order to consummate more effectively the transactions contemplated hereby and to vest in Contributee and its successors and assigns good and marketable title to the Assets. 5.06 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to its conflicts of law doctrines). The Contributor and the Contributee each (i) irrevocably submits to the jurisdiction of any New York State court or federal court sitting in New York City in any action arising out of this Agreement or any Assignment Agreement or any instrument or document delivered hereunder or thereunder, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of inconvenient forum, and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court. 5.07 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become a binding Agreement when one or more of the counterparts have been signed by each of the parties and delivered to the other party. 5.08 Notices . All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed by registered or certified mall (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): If to the Contributor: 1575 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator with a copy to: Sierra Corporate Services 241 Ridge Street Reno, Nevada Attention: Contracts Administrator If to the Contributee: 1575 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator with a copy to: Sierra Corporate Services 241 Ridge Street Reno, Nevada Attention: Contracts Administrator and a copy to: AM-BT Nevada, Inc. c/o Lionel Sawyer & Collins 1700 Bank of America Plaza 300 South Fourth Street Las Vegas, Nevada 89101 5.09 Headings . The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 5.10 Entire Agreement . This Agreement, including the exhibits, schedules, other documents and instruments referred to herein, together with the Assignment Agreements, embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 5.11 Severability . If any one or more provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 5.12 Schedules . All Schedules attached hereto are hereby incorporated herein and made a part hereof as if set forth in full herein. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

AMP FUNDING, L.L.C.

     By:  ___________________________
     Title:  __________________________

RAMP INVESTMENTS, L.L.C.

By:     PCI AIR MANAGEMENT CORPORATION,
           as Manager

     By:  ___________________________
     Title:  __________________________

SCHEDULE 1.01(a)

1. Trust Agreement (N31030) dated as of November 7, 1995 between Potomac Capital Investment Corporation (" PCIC "), as Owner Participant, and Wilmington Trust Company, a Delaware banking corporation (" WTC "), as Owner Trustee, as supplemented by the Supplement to Trust Agreement No. 1 (N31030), dated as of November 13, 1995, between WTC and PCIC.

2. Trust Agreement (N81026) dated as of November 7, 1995 between PCIC, as Owner Participant, and WTC, as Owner Trustee, as supplemented by the Supplement to Trust Agreement No. 1 (N81026), dated as of November 13, 1995, between WTC and PCIC.

3. Trust Agreement (N81025) dated as of November 7, 1995 between PCIC, as Owner Participant, and WTC, as Owner Trustee, as supplemented by the Supplement to Trust Agreement No. 1 (N81025), dated as of November 13, 1995, between WTC and PCIC.

4. Trust Agreement (N81028) dated as of November 7, 1995 between PCIC, as Owner Participant, and WTC, as Owner Trustee, as supplemented by the Supplement to Trust Agreement No. 1 (N81028), dated as of November 13, 1995, between WTC and PCIC.

5. Trust Agreement (N511P) dated as of November 7, 1995 between PCIC, as Owner Participant, and WTC, as Owner Trustee, as supplemented by the Supplement to Trust Agreement No. 1 (N511P), dated as of November 13, 1995, between WTC and PCIC.

SCHEDULE 1.01(b)

1. Trust Agreement (N81027), dated as of November _, 1995, between Wilmington Trust Company (" WTC "), as Owner Trustee, and Potomac Capital Investment Corporation (" PCIC "), as supplemented by the Supplement to Trust Agreement No. 1 (N81027), dated as of November _, 1995, between WTC, as Owner Trustee, and PCIC.

2. Trust Agreement (SE-DPP), dated as of November _, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (SE-DPP), dated as of November _, 1995, between WTC and PCIC.

3. Trust Agreement (SE-DPX), dated as of November _, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (SE-DPX), dated as of November _, 1995, between WTC and PCIC.

4. Trust Agreement (N76073), dated as of November _ , 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (N76073), dated as of November _, 1995, between WTC and PCIC.

5. Trust Agreement (N14063), dated as of November , 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (14063), dated as of November _, 1995, between WTC and PCIC.

6. Trust Agreement (N68065), dated as of November _, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (N68065), dated as of November _, 1995, between WTC, as Owner Trustee, and PCIC.

7. Trust Agreement (N19072), dated as of November 13, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (N19072), dated as of November _, 1995, between WTC, as Owner Trustee, and PCIC.

8. Trust Agreement (N164UA) dated as of June 28, 1991, between First Security Bank of Utah, N.A. (" First Security Bank "), as Owner Trustee, and PCIC, as amended by the Trust Amendment No. 1 dated as of December 16, 1991, as supplemented by the Supplement No. 1 to Trust Agreement dated as of July 1, 1991, as supplemented by the Supplement No. 2 to Trust Agreement dated as of July 1, 1991, and as supplemented by the Supplement No. 3 to Trust Agreement dated as of July 23, 1991.

9. Trust Agreement (N165UA) dated as of July 26, 1991, between First Security Bank, as Owner Trustee, and PCIC, as amended by the Trust Agreement Amendment No. 1 dated as of July 26, 1991; as amended by the Trust Agreement Amendment No. 2 dated as of July 15, 1992, as supplemented by the Supplement No. 1 to Trust Agreement dated as of July 26, 1991, as supplemented by the Supplement No. 2 to Trust Agreement dated as of July 26, 1991, as supplemented by the Trust Agreement No. 3 dated as of August 16, 1991, and as supplemented by the Supplement No. 4 to Trust Agreement dated as of August 16, 1991.

10. Trust Agreement (N83870) dated as of August 15, 1988, between First Security Bank, as Owner Trustee, and Pegasus Capital Corporation, as amended by the Trust Agreement Amendment No. 1 dated as of July 23, 1989.

11. Trust Agreement (N78019) dated as of March 26, 1990, between WTC, as Owner Trustee, and PCIC, as supplemented by the Trust Agreement Supplement No. 1 dated as of June 1, 1990, as supplemented by the Trust Agreement Supplement No. 2 dated as of July 30, 1990, and as supplemented by the Trust Agreement Supplement No. 3 dated as of August 30, 1990.

12. Trust Agreement (N490US) dated as of March 1, 1984, between First Security Bank, as Owner Trustee, and Suburban Bank.

13. Trust Agreement (N493US) dated as of April 1, 1984, between First Security Bank, as Owner Trustee, and Suburban Bank.

14. Trust Agreement (TF-ABZ), dated as of November _ , 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (TF-ABZ), dated as of November _, 1995, between WTC and PCIC.

SCHEDULE 1.01(c)

Part I
Original Aircraft Assignment and Assumption Agreements

1. Assignment and Assumption Agreement No. 2 (N31030), dated as of November 13, 1995, AMP Funding, L.L.C. (" AMP Funding ") and RAMP Investments, L.L.C. (" AMP Investments ").

2. Assignment and Assumption Agreement No. 2 (N81026), dated as of November 13, 1995, AMP Funding and AMP Investments.

3. Assignment and Assumption Agreement No. 2 (N81025), dated as of November 13, 1995, AMP Funding and AMP Investments.

4. Assignment and Assumption Agreement No. 2 (N81028), dated as of November 13, 1995, AMP Funding and AMP Investments.

5. Assignment and Assumption Agreement No. 2 (N511P), dated as of November 13, 1995, AMP Funding and AMP Investments.

Part II
Additional Aircraft Assignment and Assumption Agreements

1. Assignment and Assumption Agreement No. 3-(N81027), dated as of November _, 1995, between AMP Funding and AMP Investments.

2. Assignment and Assumption Agreement No. 3 (SE-DPP), dated as of November _, 1995, between AMP Funding and AMP Investments.

3. Assignment and Assumption Agreement No. 3 (SE-DPX), dated as of November _, 1995, between AMP Funding and AMP Investments.

4. Assignment and Assumption Agreement No. 3 (N76073), dated as of November _, 1995, between AMP Funding and AMP Investments.

5. Assignment and Assumption Agreement No. 3 (N14063), dated as of November _, 1995, between AMP Funding and AMP Investments.

6. Assignment and Assumption Agreement No. 3 (N68065), dated as of November _, 1995, between AMP Funding and AMP Investments.

7. Assignment and Assumption Agreement No. 3 (N19072), dated as of November _, 1995, between AMP Funding and AMP Investments.

8. Assignment and Assumption Agreement No. 2 (N164UA), dated as of November _, 1995, between AMP Funding and AMP Investments.

9. Assignment and Assumption Agreement No. 2 (N165UA), dated as of November _, 1995, between AMP Funding and AMP Investments.

10. Assignment and Assumption Agreement No. 2 (N83870), dated as of November _, 1995, between AMP Funding and AMP Investments.

11. Assignment and Assumption Agreement No. 2 (N78019), dated as of November _, 1995, between AMP Funding and AMP Investments.

12. Assignment and Assumption Agreement No. 2 (N490US), dated as of November _, 1995, between AMP Funding and AMP Investments.

13. Assignment and Assumption Agreement No. 2 (N493US), dated as of November _, 1995, between AMP Funding and AMP Investments.

14. Assignment and Assumption Agreement No. 2 (TF-ABZ), dated as of November _, 1995, between AMP Funding and AMP Investments.

SCHEDULE 1.01(d)
YEAR	TAIL #	TYPE	SN#	LESSEE
1993	N611IFE	MD-11F	48604	Federal Express
1984	PH-BUV	B747-306 Combi	23137	undivided interest-KLM
1986	N521US	B757-251	23209	Northwest Airlines
1985	N122KH	B747-312	23033	Singapore Airlines
Various	N/A	11 Aircraft Engines	Various	ELF Engines
1987	N/A	2 CFM56-3-B2 Engines	Various	America West
1976	N506MC	B747-2D3BF	21252	Atlas Air
1979	N13983	A300	092	N/A

SCHEDULE 3.06 Original Aircraft
Tail No.	Aircraft Type	Airframe Serial Number	Engine Model No.	Engine Serial Number
N31030	L1011-100	1111	RB211-22B	10431 10075 10480
N81026	L1011-100	1104	RB211-22B	10085 10139 10487
N81025	L1011-100	1098	RB211-22B	10432 10434 10202
N81028	L1011-100	1108	RB211-22B	10086 10491 10340
N511P	B747-212B	21162	JT9D-7J	685725 689573 689569 689452
Additional Aircraft
Tail No.	Aircraft Type	Airframe Serial Number	Engine Model No.	Engine Serial Number
N81027	L1011-50	1107	RB211-22B	10107 10161 10339
SE-DPP	L1011-50	1072	RB211-22B	10484 10094 10112
SE-DPX	L1011-50	1091	RB211-22B	10068 10433 10196
N76073	DC10-30	46940	CF6-50C2	517474 455938 517523
N14063	DC10-30	47864	CF6-50C2	455953 455855 517670
N68065	DC10-30	46590	CF6-50C2	517626 517820 517833
N19072	DC10-30	46576	CF6-50C2	455431 517122 517398
N164UA	B747-238B	21657	JT9D-7J	P689504 P689617 P689609 P689528
N165UA	B747-238B	21658	JT9D-7J	P689616 P689619 P689610 P689608
N83870	MD-82	48056	JT8D-217	P708411D P708412D
N78019	B747-238B	20527	JT9D-7A	662347 662358 662892 662367 662202 662382
N490US	F-28-4000	11152	555-15	9605 9613 9621
N493US	F-28-4000	11161	555-15	9604 9679
TF-ABZ	B747-212B	21316	JT9D-7J	662995 662440 662748 685708

Schedule 3.09

Continental Airlines, Inc., DC10-30, N76073, S/N 46940:

Lease Agreement [073] dated as of March 30, 1993, between PCI and Continental Airlines, as amended by that Lease Amendment No. 1, dated as of June 30, 1995, and by that Transaction Agreement dated as of June 30, 1995, and as supplemented by that Lease Supplement No. 1 dated as of March 30, 1993;

Participation Agreement dated as of March 30, 1993, between PCI and Continental Airlines, as amended by that Aircraft Purchase Agreement and Participation Agreement Amendment No. 1 dated as of June 30, 1995.

Continental Airlines. Inc.. DC10-30, N14063. S/N 47864:

Aircraft Purchase Agreement dated as of February 15, 1990, between Continental Airlines and PCI, as amended by that Aircraft Purchase Agreement and Participation Agreement Amendment No. 1 dated as of June 30, 1995;

Lease Agreement dated as of February 15, 1990, between-PCI and Continental Airlines, as amended by that Lease Amendment No. 1 dated as of June 30, 1995, and by that Transaction Agreement dated as of June 30, 1995, and as supplemented by that Lease Supplement No. 1, dated as of February 28, 1990;

Tax Indemnity Agreement dated as of February 15, 1990, between Continental Airlines and PCI.

Continental Airlines. Inc.. DC10-30, N19072, S/N 46576:

Aircraft Purchase Agreement dated as of February 15, 1990, between Continental Airlines and PCI, as amended by that Aircraft Purchase Agreement Participation Agreement Amendment No. 1 dated as of June 30, 1995;

Lease Agreement dated as of February 15, 1990, between PCI and Continental Airlines, as supplemented by that Lease Supplement No. 1, dated as of February 28, 1990, and as amended by that Lease Amendment No. 1 dated as of June 30, 1995, and by that Transaction Agreement dated as of June 30, 1995;

Tax Indemnity Agreement dated as of February 15, 1990, between Continental Airlines and PCI.

Continental Airlines. Inc.. DC10-30, N68065, S/N 46590:

Lease Agreement dated as of May 15, 1987, between PCI and Continental Airlines, Inc., as amended by that First Amendment to Lease Agreement dated as of January 15, 1989, and by that Lease Amendment No. 2, dated as of June 30, 1995, and by that Transaction Agreement dated as of June 30, 1995, and as supplemented by that Lease Supplement No. 1 dated as of May 22, 1987;

Tax Indemnity Agreement dated as of May 15, 1987, between Continental Airlines and PCI.

Continental Airlines. Inc.. MD-82. N83870. S/N 48056:

Trust Agreement dated as of August 15, 1988, between Pegasus Capital Corporation and the First Security Bank of Utah, National Association, as amended by that certain Trust Agreement Amendment No. 1 dated as of July 28, 1989;

Aircraft Purchase Agreement dated as of August 15, 1988, among New York Airlines, Inc., the Trustee, Pegasus Capital Corporation, and Continental Airlines;

Lease Agreement dated as of August 15, 1988, between the Trustee and Continental Airlines, as amended by that certain Amendment No. 1 to Lease Agreement dated as of July 28, 1989, and as supplemented by that Lease Supplement No. 1 dated as of September 21, 1988;

Assignment and Purchase Agreement dated as of July 14, 1989, between Pegasus Capital Corporation and PCI;

Assignment of Beneficial Interest dated as of July 28, 1989, between Pegasus Capital Corporation and PCI;

Tax Indemnity Agreement dated as of July 28, 1989, between. Continental Airlines and PCI.

Continental Micronesia. Inc.. B747-238B. N78019. S/N 20527:

Trust Agreement dated as of March 26, 1990, between PCI and Trustee, as supplemented by that Trust Agreement Supplement No. 1 dated as of June 1, 1990, as supplemented by that Trust Agreement Supplement No. 2, dated as of July 30, 1990, as supplemented by that Trust Agreement Supplement No. 3 dated August 30, 1990;

Agreement to Lease dated as of March 26, 1990, between PCI, the Trustee and Continental Airlines, Inc.;

Lease Agreement dated March 26, 1990, between the Trustee and Continental Airlines, as amended by that Lease Amendment No..1 dated as of June 30, 1995 and by that Amendment No. 1 to Lease dated as of November 1, 1990, and as supplemented by that Lease Supplement No. 1 dated as of June 1, 1990, by that Lease Supplement No. 2 dated as of July 30, 1990, and by that Lease Supplement No. 3 dated as of August 30, 1990;

Tax Indemnity Agreement dated as of March 26, 1990, between Continental Airlines and PCI;

Aircraft Lease Assignment and Assumption Agreement dated as of April 27, 1993, between Continental Airlines and Continental Micronesia, Inc.;

Sublease Agreement dated as of April 27, 1993, between Continental Micronesia and Continental Airlines.

Trans World Airlines. Inc., L1011-50. N81027. S/N 1107:

Aircraft Lease Agreement (N81027) dated as of February 1, 1995, between PCI and Trans World Airlines, as supplemented by that Lease Supplement No. 1, dated as of February 6, 1995, and as amended by that Amendment No. 1 to Aircraft Lease Agreement dated as of October 19, 1995.

International Nederlanden Aviation Lease B.V. ("ING""), L1011-50.SE-DPX. S/N 1091:

Aircraft Lease Agreement 1091 dated as of April 27, 1994, between PCI and ING, as supplemented by that Lease Supplement No. 1 dated as of April 28, 1994.

Internationale Nederlanden Aviation Lease B.V. ("ING"). L1011-50. SE-DPP. S/N 1072:

Aircraft Lease Agreement 1072 dated as of June 9, 1994, between PCI and ING, as supplemented by that Lease Supplement No. 1 dated as of June 9, 1994.

United Air Lines. Inc.. B747-238B. N164UA. S/N 21657:

Trust Agreement dated as of June 28, 1991, between PCI and First Security Bank of Utah, National Association, as amended by that Trust Agreement Amendment No. 1 dated as of December 16, 1991, and as supplemented by that Supplement No. 1 to Trust Agreement dated as of July 1, 1991, by that Supplement No. 2 to Trust Agreement dated as of July 1, 1991, and by that Supplement No. 3 to Trust Agreement dated as of July 23, 1991;

Participation Agreement dated as of December 1, 1990, between United Air Lines, Inc. and PCI;

Tax Indemnity Agreement dated as of July 23, 1991, between United Air Lines and Barclays Leasing, Inc., as supplemented by that UAL Agreement dated as of July 1, 19-91 among United Air Lines, Barclays, PCI and the Trustee, and as assigned to PCI by that Assignment and Assumption Agreement Potomac [N164UA] between PCI and Barclays dated as of December 31, 1991;

First Amended and Restated Lease Agreement dated as of December 1, 1991, between the Trustee and United Air Lines;

Credit Agreement dated as of December 16, 1991, among the Trustee, PCI, The Bank of New York, as Agent, and The Bank of New York and Swiss Bank Corporation, New York Branch, as Lenders, as amended by that Amendment No. 1 to Credit Agreement dated as of March 17, 1992;

Security Agreement dated as of December 16, 1991, between The Bank of New York, as Agent, and the Trustee, as amended by that Amendment No. 1 to Security Agreement dated as of March 17, 1992, and as supplemented by that Security Agreement Supplement No. 1 dated as of December 31, 1991 and Security Agreement Supplement No. 2 dated as of July 23, 1991;

SBC Assignment and Assumption Agreement dated as of March 17, 1992, between Swiss Bank Corporation, New York Branch, and The Bank of New York;

NCC Assignment and Assumption Agreement dated as of April 21, 1992, between The Bank of New York and National Canada Corporation;

UBK Assignment and Assumption Agreement dated as of April 21, 1992, between The Bank of New York and The United Bank of Kuwait PLC.

United Air Lines, Inc.. B747-238B. N165UA. S/N 21658:.

Participation Agreement dated as of December 1, 1990, between United Air Lines, Inc. and PCI;

Trust Agreement dated as of July 26, 1991, between PCI and the First Security Bank of Utah, National Association, as amended by that Trust Agreement Amendment No. 1 dated as of July 26, 1991, and by that Trust Agreement Amendment No. 2 dated as of July 15, 1992, and as supplemented by that Supplement No. 1 to Trust Agreement dated as of July 26, 1991, by that Supplement No. 2 to Trust Agreement dated as of July 26, 1991, by that Supplement No. 3 to Trust Agreement dated as of August 16, 1991, and by that Supplement No. 4 to Trust Agreement dated as of August 19, 1991;

Lease Agreement dated as of August 19, 1991, between Trustee, as Lessor, and United Air Lines, as Lessee, as supplemented by the Lease Supplement No. 1, dated as of August 19, 1991;

Tax Indemnity Agreement dated as of August 19, 1991, between United Air Lines and Barclays Leasing, Inc., as supplemented by that UAL Agreement dated as of July 1, 1991 among United Air Lines, Barclays, PCI and the Trustee, and as assigned to PCI by that Assignment and Assumption Agreement Potomac [N165UA] between PCI and Barclays dated as of December 31, 1991;

Credit Agreement dated as of July 15, 1992, among the Trustee, PCI, The Nippon Credit Bank, Ltd., Los Angeles Agency, as Agent, and The Nippon Credit Bank and Den Norske Bank, as Lenders;

Amended and Restated Security Agreement dated as of July 15, 1992, between The Nippon Credit Bank as Agent, and the Trustee, as supplemented by that certain Security Agreement Supplement.No. 1 dated as of July 15, 1992.

USAir. Inc.. F28-4000, N490US. S/N 11152:

Trust Agreement dated as of March 1, 1984 between Suburban Bank and First Security Bank of Utah, National Association;

Participation Agreement dated as of March 1, 1984 among Trustee, Suburban Bank, C.I.T. Corporation and Empire Airlines, Inc.;

Release dated as of December 31, 1987 by C.I.T./Equipment Financing, Inc.;

Aircraft Lease dated as of March 1, 1984 between Trustee and Empire Airlines, Inc., as supplemented by that Lease Supplement No. 1 dated.as of March 1, 1984;

Purchase Agreement dated as of December 30, 1987 between Sovran Bank/Maryland, as successor in interest to Suburban Bank, and PCI.

USAir. Inc.. F28-4000. N493US. S/N 11161:

Trust Agreement dated as of April 1, 1984 between Suburban Bank and First Security Bank of Utah, National Association;

Participation Agreement dated as of April 1, 1984 among Trustee, Suburban Bank, C.I.T. Corporation and Empire Airlines, Inc.;

Release dated as of December 31, 1987 by C.I.T. Group/ Equipment Financing, Inc.;

Aircraft Lease dated as of April 1, 1984 between Trustee and Empire Airlines, Inc., as supplemented by that Lease Supplement No. 1 dated as of April 1, 1984 and that Lease Supplement No. 2 dated as of April 27, 1995;

Purchase Agreement dated as of December 30, 1987 between Sovran Bank/Maryland, as successor in interest to Suburban Bank, and PCI.

     STATE OF OELAWARE
    SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 01/10/1994
       940105092 - 2115369

Exhibit 3.11(b)

RESTATED CERTIFICATE OF INCORPORTION

AIRCRAFT INTERNATIONAL MANGEMENT COMPANY

Aircraft International Management Company, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

1. The name of the corporation is Aircraft International Management Company. Aircraft International-Management Company was originally incorporated under the same name, and the original Certificate of Incorporation of the corporation was filed with the Secretary. of State of the State of Delaware on January 20, 1987.

2.. Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, this Restated Certificate of Incorporation restates and amends the provisions of the Certificate of Incorporation of this corporation.

3. The text of the Certificate of Incorporation is hereby restated and amended to read in its entirety as follows:

1. The name of the corporation is:

Aircraft International Management Company

2. The address of its registered office in the State of Delaware is 1105 N. Market Street, Suite 1300, P.O. Box 8985, New castle County, Wilmington, Delaware 19899. The name of its registered agent at such address is Delaware Corporate Management, Inc.

3. The nature of the business or purposes of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

4. The total number of shares of stock which the corporation shall have authority to issue is ten thousand (10,000) all of which shall be shares of common stock each with a par value of One Dollar ($1) per share.

5. The corporation is to have perpetual existence.

6. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:

To make, alter or repeal the By-Laws of the corporation.

7. Elections of directors need not be by written ballot unless the By-Laws of the corporation shall so provide.

Meetings of the stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books-of the corporation may be kept (subject to any provision contained in the statutes) outside the state of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation.

8. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

9. No director shall be personally liable to the corporation or the stockholders for monetary damages for breach of fiduciary duty as a director except

(i) for any breach of his duty of loyalty to the corporation or the stockholders;

(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

(iii) for the unlawful payment of dividends or unlawful stock repurchases (as to which a negligence standard will apply); or

(iv) for any transaction from which the director derived an improper personal benefit.

IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been signed under the seal of the corporation this 6 ^th day of December, 1993.

ATTEST:

/s/ WM. SHAPIRO
Secretary

AIRCRAFT INTERNATIONAL
MANAGEMENT COMPANY

By: /s/ PAUL F. NAUGHTON
President

EXHIBIT 3.12{d)(i) PCI Trial Balance As of 11/01/95
				CURRENT PERIOD
ACCOUNT	SUB	DESCRIPTION	BEGINNING BALANCE	DEBIT	CREDIT	ENDING BALANCE
113000	08	Federal Income Tax Receivabl	-624.00	624.00	0.00	0.00
114002	08	Accounts Receivable - PCI	2,062,174.51	0.00	2 ,062,174.51	0.00
183000	08	Deferred Federal Inc. Tax Rec	89,100.00	0.00	89,100.00	0.00
191004	08	ST Notes Receivable from PCI	4,947.00	0.00	4,947.00	0.00
193000	08	Investment in Preferred Stocks	0.00	212,307,137.00	0.00	212,307,137.00
**Total Assets			2,155,597.51	212,307,761.00	2,156,221.51	212,307,137.00
201002	08	Accounts Payable - PCI	311,307.27	311,307.27	0.00	0.00
254000	08	Deferred FIT Payable - Other	-2,491.00	0.00	2,491.00	0.00
254006	08	DEFERRED F.I.T. - AMT	-162.00	0.00	162.00	0.00
271000	08	Common Stock	10,000.00	0.00	0.00	10,000.00
272000	08	Additional Paid-in Capital	190,000.00	0.00	210,460,193.76	210,650,193.76
274000	08	Retained Earnings	1,647,648.39	0.00	0.00	1,647,648.39
275000	08	YTD Net Income	-705.15	0.00	0.00	-705.15
**Total Liabilities			2,155,597.51	311,307.27	210,462,846.76	212,307,137.00
641000	08	Franchise Tax	130.15	0.00	0.00	130.15
651000	08	Misc. Expense	784.00	0.00	0.00	784.00
999200	08	FIT - Current - Other	-209.00	0.00	0.00	-209.00
**Total Income and Expense			-705.15	0.00	0.00	-705.15

Exhibit 3.12(d)(ii) Aircraft International Management Corporation (AIMC) Preferred Stock Portfolio
Company	Number of Shares	Par Value Per Share	Face Amount	Market Value
Puget Sound	160,000	100	16,000,000	16,800,000
Duke Power	20,000	100	2,000,000	2,125,000
Duke Power	30,000	100	3,000,000	3,217,500
Duke Power	47,000	100	4,700,000	4,888,000
Duke Power	118,350	100	11,835,000	12,781,800
Louisville Gas & Electric	43,100	100	4,310,000	4,396,200
Public Service Gas & Electric	77,500	100	7,750,000	7,711,250
Consolidated Edison	62,500	100	6,250,000	6,500,000
Consolidated Edison	89,000	100	8,900,000	9,256,000
Florida Power & Light	29,080	100	2,908,000	2,973,430
Ford Holdings Inc. Series B	252	100,000	25,200,000	24,822,000
Ford Holdings Series G	228	100,000	22,800,000	22,971,000
Ford Series N	30	100,000	3,000,000	3,120,000
Interstate Power	103,000	50	5,150,000	5,072,750
Southern Cal Edison	49,450	100	4,945,000	5,142,800
Southern Cal Edison	22,000	100	2,200,000	2,354,000
Pacific Gas & Electric	585,900	25	14,647,500	14,793,975
Pacific Gas & Electric	142,000	25	3,550,000	3,621,000
Virginia Electric Power	130,000	100	13,000,000	13,650,000
Appalachian Power	91,400	100	9,140,000	9,083,332
Appalachian Power	100,000	100	10,000,000	10,650,000
New York Slate Electric & Gas	280,000	25	7,000,000	7,350,000
New York State Electric & Gas	67,100	100	6,710,000	6,777,100
Ohio Power Company	122,500	100	12,250,000	12,250,000
TOTAL				212,307,137

	EXECUTION COPY
FUNDING AGREEMENT This Funding Agreement ( *"Agreement"* ), dated as of November 13, 1995, is made by and between AMP Funding, L.L.C. ( *"AMP"* ), a Delaware limited liability company and Potomac Capital Investment Corporation ( *"PCI"* ), a Delaware corporation. W I T N E S S E T H WHEREAS, PCI is a member of AMP; and WHEREAS, PCI and AMP have determined that in order to further capitalize its operations, AMP may, from time to time, require additional capital contributions from PCI; and WHEREAS, PCI has agreed to provide such capital by purchasing from time to time, all or part of the Class B Preferred Shares of AMP (the *"Shares"* ) on the terms provided in this Agreement; and WHEREAS, AMP and PCI desire to set forth the terms applicable to such sale and purchase. AGREEMENT NOW, THEREFORE, for the mutual consideration set forth herein, the adequacy of which is hereby acknowledged, PCI and AMP, intending to be legally bound, hereby agree as follows: ARTICLE I AGREEMENT TO PURCHASE SHARES SECTION 1. 01. Purchase of Shares. During the term of this Agreement PCI agrees to purchase from AMP, from time to time, Shares for a purchase price per share of $2,000,000 in an aggregate amount not to exceed 10 Shares. PCI intends that its agreement to purchase Shares shall create an irrevocable obligation for it to purchase Shares upon the request of AMP in accordance with the provisions of this Agreement. In furtherance of the foregoing, PCI acknowledges that AMP shall have sole discretion regarding the decision of when and whether to sell any or all of the Shares. ARTICLE II PURCHASE OF SHARES *SECTION 2.01. Offer Notice* . At any time that AMP determines to exercise its rights under this Agreement to sell all or part of the Shares to PCI, AMP shall deliver notice of such decision (the "Offer Notice" ) by messenger, express mail or telecopier, return receipt requested, to PCI. The Offer Notice shall be written and shall include the number of Shares to be acquired by PCI and payment instructions. The date of the Offer Notice shall be the date on which such Offer Notice has been sent to PCI (the "Notice Date") . SECTION 2.02. Closing . The closing of the purchase by PCI of the Shares that are the subject of the Offer Notice (the "Offered Shares" ) shall be held within thirty (30) days after the Notice Date, at the main offices of AMP, or such other location as the parties may agree. At the closing, PCI shall pay to AMP the full purchase price for the Offered Shares, by means of a wire transfer, and AMP shall deliver to PCI certificates representing all of the Offered Shares, duly endorsed in blank for transfer or with duly executed blank stock powers attached, together with such other documents as may be reasonably necessary or desirable, in the opinion of counsel for PCI, to effectuate the transfer to PCI of the Shares being purchased. ARTICLE III REPRESENTATION OF AMP SECTION 3.01. The Shares .** AMP represents and warrants that, as of the date that any of the Offered Shares are sold to PCI, all such Shares will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges arising out of or by reason of the issuance thereof. ARTICLE IV MISCELLANEOUS SECTION 4.01. Term. This Agreement shall remain in full force and effect until such time as PCI holds legal or beneficial title to less than two of the outstanding Common Shares of AMP. SECTION 4.02. Specific Performance . PCI acknowledges that money damages would not be a sufficient remedy for any breach of its obligation to purchase the Shares and that irreparable harm would result if its obligations were not specifically enforced. Therefore, if PCI intentionally fails to take any action required to be taken by it under the terms of this Agreement, the rights and obligations of the parties under this Agreement shall be enforceable by a decree of specific performance issued by any court of competent jurisdiction, and appropriate injunctive relief may be applied for and granted in connection therewith. AMP's right to specific performance shall be in addition to all other legal or equitable remedies available to such party. *SECTION 4.03. Notices* . All notices, requests, demands, consents, approvals, agreements, or other communications to or by a party to this Agreement shall (i) be in writing addressed to the authorized address of the recipient set out in this Section 4.03 or to such other address as it may have notified the sender, (ii) be signed by an authorized officer of the sender, and (iii) be delivered in person or sent by registered or certified mail return receipt requested or by facsimile transmission and be deemed to be duly given or made (A) in the case of delivery in person, when delivered to the recipient at such address or (B) in the case of facsimile transmission, when received in legible form by the recipient at such address and when the recipient has been requested to acknowledge receipt of the entire facsimile transmission, upon the sending and receiving of the acknowledgment of receipt (which acknowledgment the recipient will promptly give); but if such delivery or dispatch is later than 5:00 pm local time on a day on which business is generally carried on in the place to which such communication is sent or occurs on a day on which business is not generally carried on in the place to which such communication is sent, it will be deemed to have been duly given or made at the commencement of business on the next day on which business is generally carried on in that place. Notices to AMP may be sent to: 1575 Delucchi Lane Suite 115 Reno, Nevada 89502 Notices to PCI may be sent to 900 19th Street, N.W. Suite 600 Washington, D.C. 20006-2109 SECTION 4. 04. Severability . If any one or more of the provisions of this Agreement shall be held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. To the extent permitted by applicable law, each party hereto waives any provision of law which renders any provision of this Agreement invalid, illegal, or unenforceable in any respect, unless material to the purpose of this Agreement. SECTION 4.05. Captions .** The captions in this Agreement are for convenience only, do not form a part hereof, and do not in any way modify, interpret, or construe the intentions of the parties hereto. SECTION 4.06. Governing Law . This Agreement shall be governed by the laws of the State of Delaware (regardless of the laws that might otherwise govern under applicable principles of conflicts of law). SECTION 4.07. Choice of Forum . Any judicial proceeding brought against any of the parties hereto with respect to this Agreement shall be brought in any court of competent jurisdiction in the State of Delaware, regardless of where such party may be located at the time of such proceeding, and by execution and delivery of this Agreement, each of the parties to this Agreement hereby consents to the exclusive jurisdiction of any such court and waives any defense or opposition to such jurisdiction. SECTION 4.08. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
	POTOMAC CAPITAL INVESTMENT CORPORATION By: _____________________________ Name: Title:
	AMP FUNDING, L.L.C. By: _____________________________ Name: Title:

EXHIBIT E

FORM OF
GUARANTY OF OBLIGATIONS

GUARANTY OF OBLIGATIONS dated as of November 13, 1995 (this "Guaranty" ) by AMP Funding, L.L.C., a Delaware limited liability company ( "Guarantor" ), in favor of Potomac Capital Joint Leasing Corporation, a Delaware corporation ( "PCJL" ).

PRELIMINARY STATEMENT

Guarantor is a member of RAMP Investments, L.L.C., a limited liability company organized under the laws of the State of Delaware (the "Company" ). Heretofore, Guarantor, as assignee of Potomac Capital Investment Corporation, a Delaware corporation ( "PCI" ), entered into a certain Assignment and Assumption Agreement dated the date hereof assuming all obligations of PCI under a certain promissory note dated October 18, 1995, in the amount of $233,000,000.00 payable to PCJL (the "Note" ). Concurrently herewith, Guarantor is entering into an Assignment and Assumption Agreement dated as of the date hereof with the Company (the "Assumption Agreement" ) whereby the Company shall assume all obligations of Guarantor under the Note.

NOW, THEREFORE, in consideration of the premises, Guarantor hereby agrees as follows:

S ection 1. Guaranty . The Guarantor hereby unconditionally guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of the Company now or hereafter existing under the Assumption Agreement and the Note, whether for principal, interest, fees, expenses or otherwise (such obligations being the "Obligations" ), and agrees to pay any and all expenses (including counsel fees and expenses) incurred by PCJL in enforcing any rights under this Guaranty. Without limiting the generality of the foregoing, the Guarantor's liability shall extend to all amounts which constitute part of the Obligations and would be owed by the Company under the Assumption Agreement and the Note but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company.

Section 2. Guaranty Absolute . The Guarantor guarantees that the Obligations will be paid strictly in accordance with the terms of the Assumption Agreement and the Note, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of PCJL with respect thereto. The obligations of the Guarantor under this Guaranty are independent of the Obligations, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Company or whether the Company is joined in any such action or actions. The liability of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of:

(i) any lack of validity or enforceability of the Assumption Agreement, the Note or any other agreement or instrument relating thereto;

(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from the Assumption Agreement or the Note;

(iii) any taking, exchange, release or non-perfection of any collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations;

(iv) any manner of application of collateral, or proceeds thereof, to all or any of the Obligations, or any manner of sale or other disposition of any collateral for all or any of the Obligations or any other assets of the Company;

(v) any change, restructuring or termination of the corporate structure or existence of the Company; or

(vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Company or a guarantor.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by PCJL upon the insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment had not been made.

Section 3. Guarantor's Waiver; Remedies; No Subrogation . Guarantor hereby waives to the extent permitted by law: (a) notice of acceptance of this Guaranty, the Assumption Agreement or the Note; (b) promptness, diligence, presentment and demand for payment; (c) protest and notice of dishonor or of default; (d) any right, defense or other benefit it may have with respect to this Guaranty (including, without limitation, any right to terminate, or to assert any defense to its obligations under this Guaranty) arising under the Bankruptcy Code of the United States as at any time amended, or under any successor thereto; and (e) any other circumstance which might otherwise constitute a defense available to it (other than a defense of failure to mitigate damages) or a discharge of it. No failure on the part of PCJL to exercise, and no delay in exercising, any rights hereunder or under the Assumption Agreement or the Note shall operate as a waiver thereof, nor shall any such delay or any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Notwithstanding any payment or payments made by Guarantor hereunder or any set-off or application of funds of Guarantor by PCJL, Guarantor shall not be entitled to be subrogated to any of the rights of PCJL against the Company or any collateral security or guarantee or right of offset held by PCJL for the payment of the Obligations, nor shall Guarantor seek or be entitled to seek any reimbursement from the Company in respect of payments made by Guarantor hereunder, until all amounts owing to PCJL by the Company on account of the Obligations are paid and performed in full.

Section 4. Continuing Guaranty. This Guaranty is a present and continuing guaranty of payment and not of collection and is not conditional or contingent upon any attempt to collect from the Company or any other person. Guarantor waives any right, as a condition to the enforcement of this Guaranty, that any action or other proceeding be brought against the Company or that any remedy be exercised against the Company.

Section 5. Representations and Warranties . Guarantor represents and warrants to PCJL that as of the date hereof.

(a) Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has the corporate power and authority to own its property and assets, carry on its business as it is now conducted and to enter into and perform its obligations under this Guaranty.

(b) This Guaranty has been duly authorized by all necessary corporate action on the part of Guarantor and has been duly executed and delivered by Guarantor, and the execution, delivery and performance of this Guaranty by Guarantor do not (i) require any approval of the stockholders of Guarantor or any approval or consent of any trustee or holder of any indebtedness or obligation of Guarantor, (ii) contravene any applicable law regulation, judgment, order or contractual restriction applicable to or binding on Guarantor, or (iii) contravene or result in any breach of or constitute any default under, or result in the creation or imposition of any lien upon the Aircraft under Guarantor's charter or by-laws or any indenture, mortgage, loan agreement, lease or other agreement or instrument to which Guarantor is a party or by which Guarantor or any of its properties is bound.

(c) This Guaranty constitutes a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with the terms hereof, except as enforceability-may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and by general principles of equity.

(d) There is no action, suit or proceeding pending or, to the knowledge of Guarantor, threatened against Guarantor before or by any federal, state, municipal, foreign or other governmental authority, agency, instrumentality or court that, if determined adversely to Guarantor, would materially adversely affect the ability of Guarantor to perform its obligations under this Guaranty.

Section 6. Rights and Powers . PCJL may proceed, either in its own name or otherwise, to protect and enforce any or all of its rights under this Guaranty in equity, at law or by other appropriate proceedings.

Section 7. Modification of Guaranty . No modification, amendment or waiver of any provision of, or any consent required by, this Guaranty, nor any consent to any departure by Guarantor therefor, shall in any event be effective unless the same shall be in writing and signed by Guarantor and PCJL.

Section 8. Successors and Assigns . This Guaranty shall be binding upon the successors and assigns of Guarantor (it being understood that Guarantor shall not be entitled to assign its obligations under this Guaranty) and all covenants and agreements by or on behalf of Guarantor that are contained in this Guaranty shall inure to the benefit of the successors and assigns of PCJL.

Section 9. Scope and Termination . This Guaranty constitutes the entire agreement of Guarantor and supersedes all prior written and oral agreements and understandings with respect to the subject matter hereof between Guarantor (in such capacity) and PCJL. Guarantor's obligations under this Guaranty shall continue in full force and effect until the date on which all of the Obligations have been paid in full.

Section 10. Notices . All notices and other communications to Guarantor shall be in writing and addressed to it at 1575 Delucchi Lane, Suite 115, Reno, Nevada 89502 Attention: Contracts Administrator, or at such other address as Guarantor may from time to time provide by notice. Communications to PCJL shall be in writing and addressed to it at 1105 North Market Street, Suite 1300, P.O. Box 8985, Wilmington, DE 17879.

Section 11. GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

Section 12. Severability . Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered by an officer thereunto duly authorized as of the day and year first above written.

AMP FUNDING, L.L.C.

By:  ___________________________
        Name:
         Title:

EXHIBIT F FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this *"Agreement"* ), dated as of November 13, 1995, is being made, executed and delivered by and among POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation ( *"Assignor"* ), AMP FUNDING, L.L.C, a Delaware limited liability company ( *"Assignee"* ), and POTOMAC CAPITAL JOINT LEASING CORPORATION, a Delaware corporation ( *"PCJL"* ). W I T N E S S E T H WHEREAS , Assignor is the sole obligor under a loan from PCJL in the principal amount of $233,000,000.00 as evidenced by a promissory note from Assignor to PCJL (the *"Note"* , a form of which is attached as Exhibit A ); and WHEREAS , Assignor proposes to assign to Assignee Assignor's obligations under the Note and Assignee proposes to assume all such obligations, in accordance with the terms of this Agreement; and WHEREAS, PCJL wishes to acknowledge and consent to the assignment and assumption contemplated by this Agreement. A G R E E M E N T NOW, THEREFORE , in consideration of the recitals set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Assignment of Obligations. Assignor hereby assigns, transfers and delivers to Assignee all of Assignor's obligations (and related rights) under the Note (the *"Assigned Obligations"* ); provided, however , Assignor shall hold harmless Assignee from any and all liability for accrued but unpaid interest on the Note as of the date hereof (the *"Retained Liability"* ). *SECTION 2. Assignment of Obligations* .** Assignee hereby agrees to assume, pay, discharge, fulfill or perform all of the Assigned Obligations and release and to hold harmless Assignor from any performance of the Assigned Obligations, in each instance other than the Retained Liability. SECTION 3. Consent and Acknowledgment . PCJL hereby acknowledges and consents to the assignment to, and assumption by, Assignee of the Assigned Obligations. SECTION 4. Representations and Warranties.
	(a)	There are no defaults under the Note, and no event has occurred which, with notice and/or the passage of time, would constitute a default under the Note.
	(b)	A true and correct copy of the Note is attached hereto and none of the terms or provisions of the Note has been modified, amended or waived.
	(c)	No installment of principal and interest is due and owing under the Note.
	(d)	There are no unpaid late charges or other penalties due and owing on the Note.
	(e)	PCJL continues to be the holder of the Note, and payments are to be made to PCJL.
*SECTION 5. Release* .** PCJL hereby releases Assignor for any and all liability under the Note except for the Retained Liability. SECTION 6. Further Assurances. From time to time, at the request of any party hereto and without further consideration, each party, at its own expense, will execute and deliver such other documents, and take such other actions, as any other party may reasonably request to effect the transactions contemplated hereby, to consummate the assumption of the Assigned Obligations. SECTION 7. Delivery of New Note . At the request of PCJL and upon the surrender of the Note to Assignee, Assignee shall execute a new promissory note evidencing the Assumed Obligations that shall be substantially similar to the Note, other than such modifications as are required to evidence Assignee's assumption of the Assigned Obligations. *SECTION 8. Governing Law* .** This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to its conflict of law doctrines). IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.
			POTOMAC CAPITAL INVESTMENT CORPORATION By: ____________________________ Name: Title:
			AMP FUNDING, L.L.C. By: ____________________________ Name: Title:

	PROMISSORY NOTE
$233,000,000.00			November 13, 1995
For value received, the undersigned (the *"Maker"* ), promises to pay to the order of Potomac Capital Joint Leasing Corporation, a Delaware corporation ( *"PCJL"* ), the amount of TWO HUNDRED AND THIRTY-THREE MILLION DOLLARS AND NO CENTS ($233,000,000.00) together with interest thereon at a rate per annum equal to seven and three-eighths percent (7.375%), in legal and lawful money of the United States of America. Accrued interest shall be payable with each installment of principal. Interest shall be computed based on the premise that a year contains 360 days consisting of twelve (12) months of thirty (30) days each and shall be charged on a per diem basis. This Note is due and payable upon the earlier of (i) demand and (ii) June 1, 2002 (the *"Maturity Date"* ). Demand for payment may be made in one or more installments, provided that the aggregate amount of all such demands shall not exceed the face amount hereof. The unpaid principal balance hereof shall be due and payable on the Maturity Date. This Note may be pre-paid, in whole or in part, by the Maker without pre-payment penalty. It is expressly provided that upon default in the punctual payment of this Note or any part hereof, as the same shall become due and payable, the entire indebtedness evidenced hereby shall mature, at the option of the holder. In the event this Note, or any part hereof, is collected through bankruptcy or other judicial proceedings by an attorney or is placed in the hands of an attorney for collection after maturity, then the undersigned agrees and promises to pay reasonable attorneys' fees for collection. The Maker expressly waives all notices, demands for payment upon the Maturity Date, presentation for payment, protest and notice of protest, as to this Note, and consents that the payee or other holder of this Note may at any time, and from time to time, upon request of or by agreement with the Maker, extend the maturity hereof or change the time or method of payments hereunder. The Maker of this Note further waives any right to plead the statute of limitations as a defense to any demand upon this Note and, in the event such waiver is declared invalid, Maker hereby agrees to extend the applicable statute of limitations for a period of four years from the date of expiration of the time limited for commencement of an action upon this Note by the applicable statute of limitations. This Note shall be governed by the laws of the State of Delaware.
		POTOMAC CAPITAL INVESTMENT CORPORATION By: ____________________________ Name: Title:

EXHIBIT G

FORM OF CONTRIBUTION AGREEMENT

dated as of

November 13, 1995

between

POTOMAC CAPITAL INVESTMENT CORPORATION

Contributor

and

AMP FUNDING, L.L.C.

Contributee

CONTRIBUTION AGREEMENT THIS CONTRIBUTION AGREEMENT (this " Agreement ") dated as of November 13, 1995, between Potomac Capital Investment Corporation, a corporation organized under the laws of the State of Delaware (the " Contributor "), and AMP Funding, L.L.C., a limited liability company organized under the laws of the State of Delaware (the "Contributee"). RECITALS The Contributor wishes to contribute to the Contributee effective as of November 13, 1995 (the " Original Contribution Date ") the original Assets (as defined in Section 1.01(a) below), and the Contributee has agreed to accept such contribution, subject to the terms and conditions of this Agreement. On or before the 90th day after the Original Contribution Date, the Contributor wishes to contribute to the Contributee effective as of a date agreed on by the parties (the " Additional Contribution Date " and together with the Original Contribution Date, a " Contribution Date ") all or a portion of the Additional Assets (as defined in Section 1.01(b) below), subject to the terms and conditions of this Agreement. In consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, the Contributor and the Contributee hereby agree as follows: ARTICLE 1. CONTRIBUTION OF ASSETS 1.01 Contribution of Assets. (a) Subject to the terms and conditions of this Agreement, on the Original Contribution Date, the Contributor shall assign and deliver to the Contributee all of its right, title and interest in and to the following:
	(i) all of the outstanding shares (the " AIMC Shares" ) of common stock of Aircraft International Management Corporation, a Delaware corporation ("AIMC"); (ii) the Trust Agreements described in Schedule 1.01(a) attached hereto (the " Original Trust Agreements" ); (iii) each of the-trusts created under the Original Trust Agreements and each Trust Estate (as defined in each of the Original Trust Agreements); and (iv) any existing deposits, reserve accounts, or receivables held under or pursuant to any of the foregoing (all such right, title and interest in the agreements and property referred to in clauses (i) through (iv) collectively, the " Original Assets" ).
(b) Subject to the terms and conditions of this Agreement, on each Additional Contribution Date, the Contributor shall assign and deliver to the Contributee all of its right, title and interest in and to all or a portion (provided such portion consists of all of the following assets related to any Trust Estate included in such portion) of the following:
	(i) the Trust Agreements described in Schedule 1.01(b) attached hereto (the " Additional Trust Agreements " and together with the Original Trust Agreements, the " Trust Agreements" ); (ii) each of the trusts created under the Additional Trust Agreements and each Trust Estate (as defined in each of the Additional Trust Agreements); and (iii) any existing deposits, reserve accounts, receivables held under or pursuant to any of the foregoing (all such right, title and interest in the agreements and property referred to in clauses (i) through (iii) collectively, the " Additional Assets " and together with the original Assets, the " Assets ").
No contribution of Additional Assets shall occur pursuant hereto after the 90th day after the date hereof. All rents and other amounts payable to lessor under the three aircraft leases subject to the Additional Trust Agreements in items 11, 16 and 17 of Part II of Schedule 1.01(c) hereof shall accrue to Contributee from and after November 30, 1995, regardless of when the Additional Contribution Date for such Additional Trust Agreements occurs and, to the extent of any payment thereof to Contributor on or prior to the Additional Contribution Date, Contributor shall contribute such amount to Contributee on the Additional Contribution Date for such Additional Assets. (c) The assignment of the Assets pursuant to Section 1.01(a) and (b) shall be evidenced by the Assignment and Assumption Agreements described in Schedule 1.01(c) attached hereto (collectively, the " Assignment Agreements ") which shall be effective as of the Original Contribution Date or any Additional Contribution Date, as the case may be, and delivered by the Contributor on the Original Contribution Date or any Additional Contribution Date, as the case may be. (d) In the event the Contributor is unable to obtain all relevant consents to the transfer contemplated by any of the Assignment Agreements listed in Part II of Schedule 1.01(c), the Contributor, with the prior written consent of each of the parties specified in Section 5.01 hereof, may substitute for any of the Aircraft listed in Schedule 1.01(d) hereto any other Trust Agreement (and all related property, rights, instruments and agreements) relating to an aircraft of comparable value as the Aircraft being substituted. ARTICLE 2. EVENTS OCCURRING ON THE CONTRIBUTION DATE 2.01 Deliveries by Contributor. In addition to the Assets to be contributed to the Contributee on a Contribution Date, the Contributor shall deliver the following to the Contributee on the Contribution Date, each in form and substance satisfactory to the Contributee and, unless otherwise agreed in writing by the Contributee, dated the Contribution Date:
	(i) A copy of the resolutions of the Contributor's Board of Directors, certified by a duly authorized officer of the Contributor, authorizing or ratifying its execution, delivery and performance of this Agreement, each Assignment Agreement and the other documents to be delivered hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby; (ii) A certificate of a duly authorized officer of the Contributor certifying (a) the names and true signatures of the officers of the Contributor authorized to sign this Agreement, each Assignment Agreement and the other documents to be delivered hereunder and thereunder and (b) that attached thereto are true and correct copies of the Contributor's charter and bylaws, in each case as in effect on the Contribution Date; (iii) Favorable opinions of counsel for the Contributor; and (iv) Such other approvals, opinions and documents as the Contributee may reasonably request as to the legality, validity, binding effect or enforceability of this Agreement or any Assignment Agreement.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR Contributor hereby represents and warrants as of each Contribution Date that: 3.01 Title to Assets . The Contributor has good and marketable title to all of the Assets transferred on such Contribution Date free and clear of all obligations, liens, pledges, claims, rights of first refusal, options, charges, security interests, mortgages or other encumbrances of any nature whatsoever (collectively, the " Asset Encumbrances "), other than any Asset Encumbrance arising solely in favor of the Contributee from the transactions contemplated hereby and by the Assignment Agreements. 3.02 Organization . The Contributor is a corporation validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business as a corporation and is in good standing in each jurisdiction in which the character of the properties and assets now owned or leased by it or the nature of the business transacted by it requires it to be so qualified, except where the failure to be so qualified, individually or in the aggregate, would not have a material adverse effect upon the business or financial condition of the Contributor or upon the transactions contemplated by this Agreement. 3.03 Authority . The Contributor has the corporate power and authority to carry on its business as now conducted, to own or hold under lease its properties, and to execute and deliver this Agreement and each Assignment Agreement and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Contributor of this Agreement and each Assignment Agreement has been duly authorized by all necessary corporate action; and each of this Agreement and each Assignment Agreement has been duly executed and delivered by the Contributor and is the legal, valid and binding obligation of the Contributor enforceable against the Contributor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, receivership, conservatorship, reorganization, liquidation, moratorium or similar events affecting the Contributor or its assets, or by general principles of equity. 3.04 No Consents; No Violations . (a) No authorization, approval or other action by, and no notice to or filing with, any governmental, regulatory or legal authority or any other person is required for the due execution, delivery and performance by the Contributor of this Agreement or any Assignment Agreement or the consummation of the transactions contemplated hereby or thereby. (b) The execution, delivery and performance of this Agreement and any Assignment Agreement and the consummation of the transactions contemplated hereby and thereby do not and will not result in any contravention of (i) the articles of incorporation or bylaws of the Contributor or AIMC, (ii) any applicable law, rule or regulation of any federal, state or local governmental or regulatory authority, (iii) any order, writ, injunction, judgment, decree or award of any court, arbitrator, or governmental or regulatory authority to which the Contributor or AIMC or any of their properties are subject, (iv) any mortgage, contract, agreement, deed of trust, license, lease or other instrument, arrangement, commitment, obligation, understanding or restriction of any kind to which the Contributor or AIMC is a party or by which any of their properties are bound, or (v) the Operative Documents (as defined in Section 3.06(a) below). 3.05 Litigation . Other than as disclosed in writing to the parties hereto by the Contributor, there is no pending or known threatened action or proceeding before any court, governmental agency or arbitrator by or against, or involving the Contributor or any of its Affiliates, any of its property or any of its directors, officers or employees which questions or challenges the validity or enforceability of this Agreement or any Assignment Agreement, or any action taken or to be taken by the Contributor pursuant to this Agreement or any Assignment Agreement or in connection with the transactions contemplated hereby or thereby. 3.06 Representations Regarding Documents . (a) This Agreement, the Trust Agreements, the Assignment Agreements and the Assigned Documents (as defined in the related Assignment Agreement) (collectively, the " Operative Documents ") constitute all of the material agreements to which the Contributor, the applicable Trustee (as defined in the applicable Trust Agreement) and/or the applicable Lessee (as defined in the applicable Lease), if any, is a party relating to each of the Aircraft (as listed on Schedule 3.06 hereto) that remain in full force and effect as of the Contribution Date. Each such Operative Document is in full force and effect and has not been modified or amended. (b) Each Trust Estate is free and clear of any Asset Encumbrance created or incurred, directly or indirectly, by the Contributor, and, to the knowledge of the Contributor, each Trust Estate is free and clear of any Asset Encumbrance. (c) Each Trustee has good and marketable title to the applicable Aircraft in each case, free and clear of any Asset Encumbrance other than the Master Leasing Agreement dated as of November 13, 1995, by and among the applicable Trustee and PCI Air Management Partners, L.L.C., a Delaware limited liability company, any applicable sublease specified in an Assignment Document, and in the case of Aircraft bearing FAA Registration Nos. N164UA and N165UA, the lien of the related Security Agreement (as defined in the applicable sublease). (d) There is no obligation or covenant to be performed by the Contributor under any Trust Agreement or any other Operative Document and no obligation or covenant of the Contributor which has accrued, on or prior to the date hereof which has not been fully performed, and Contributor shall indemnify and hold harmless the Contributee from and against any claim, loss, liability or expense incurred by Contributee attributable to any such obligation or covenant which has not been so performed or which has so occurred. (e) There are no defaults and no events which, with the giving of notice or lapse of time or both, would constitute a default by the Contributor under any Trust Agreement or any other Operative Document and to the knowledge of the Contributor, there are no material defaults and no events which, with the giving of notice or lapse of time or both, would constitute a default by any Trustee under any Trust Agreement or any other Operative Document to which any Trustee is a party. (f) All rent due and owing as of any Additional Contribution Date under any lease of any Aircraft included in the Trust Estate for any Trust Agreement contributed to Contributee on any Additional Contribution Date for any period subsequent to the date for payment under such lease has not, and will not have, been collected for more than one (1) month in advance and payment thereof has not, and on such Additional Contribution Date will not have, been anticipated, waived, released, discounted, set off or otherwise discharged or compromised; no supplemental rent has,; or on such Additional Contribution Date will have, been paid or is or on such Additional Contribution Date will be due and owing under any such lease; and as of November 30, 1995, the aggregate amount of basic rent scheduled to be due and owing under the three aircraft lease agreements directly or indirectly included in the Additional Assets as items 11, 16 and 17 of Part II of Schedule 1.01(c) attached hereto (which three lease agreements are not covered by a master lease) is $384,389. 3.07 Solvency of Contributor . The Contributor was solvent immediately prior to the execution of this Agreement and will not, as a result of the transactions contemplated hereby, be rendered insolvent. 3.08 Obligations of the Contributor . Other than as specifically set forth in the Trust Agreements and the other Operative Documents, the Contributor has no obligations, duties or liabilities under or with respect thereto. 3.09 No Waiver . Except for consents to which the Contributee is a party and those listed on Schedule 3.09, the Contributor has not entered into or given any written waivers, consents, supplements, or modifications of the Trust Agreements or any other Operative Document and has not entered into or given any waivers or consents with respect to any of the Aircraft. 3.10 No Event of Loss . To the knowledge of the Contributor, neither an "Event of Loss" (as such term is defined in the applicable sublease) nor any event which with the passage of time would constitute such an Event of Loss has occurred with respect to the Aircraft covered by such sublease. 3.11 No Broker . Except for fees payable to Bankers Trust Company, the Contributor is not obligated to pay, and has not retained any, broker or finder or other person who is entitled to, any broker's or finder's fee or other commission based upon the consummation of the transactions contemplated by this Agreement, any other Operative Agreement or any other agreement contemplated thereby. 3.12 AIMC Shares . (a) The authorized capital stock of AIMC consists of 10,000 shares of common stock (the " AIMC Common Stock "), par value $1.00 per share, of which 5,000 shares are issued and outstanding, all of which are the AIMC Shares and are owned of record and beneficially by Contributor. The AIMC Shares have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive rights. There is no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge or other disposition of any shares of AIMC Common Stock or of any other capital stock of AIMC or any securities convertible into, or other rights to acquire, any such shares of AIMC Common Stock or other capital stock of AIMC or (ii) relates to the voting or control of such AIMC Common Stock, capital stock, securities or rights. No person has any right to require AIMC to register any of its securities under the Securities Act of 1933, as amended (the " Securities Act "). (b) AIMC is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as presently conducted. AIMC is duly qualified as a foreign corporation, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease requires it to be so qualified. Attached hereto as Exhibit 3.12(b) is a complete and correct copy of AIMC's certificate of incorporation, as amended to date, certified by the Secretary of the State of Delaware, and AIMC's bylaws, as currently in effect. (c) The transfer of the AIMC Shares to Contributee pursuant to this Agreement will vest in Contributee legal and valid title to the AIMC Shares, free and clear of all Asset Encumbrances. (d) Attached as Exhibit 3.12(d) (i) is a copy of the unaudited balance sheet and income statement of AIMC as of November 1, 1995, which fairly presents the financial position and accurately reflects the assets and liabilities of AIMC as of such date. AIMC has no subsidiaries. AIMC has valid legal and beneficial title to all of the shares of preferred stock set forth on Exhibit 3.12(d) (ii) attached hereto free and clear of all Asset Encumbrances. As of the date hereof, AIMC has net worth of at least $212,307,137. (e) AIMC has no debts, obligations or liabilities of any kind or nature, either direct or indirect, absolute or contingent, matured or unmatured, known or unknown, including, without limitation, liabilities or obligations with respect to any federal, state, local and foreign income, franchise, excise, sales or use taxes. (f) AIMC has complied in all material respects with all laws, statutes, rules, regulations, judgments, decrees and orders applicable to its business or operations including, without limitation, any of the above which relate to the environment. ARTICLE 4. SURVIVAL OF REPRESENTATIONS: INDEMNIFICATION . 4.01 Survival . The representations and warranties of the Contributor contained in Article 3 hereof shall survive the Contribution Date and the delivery and acceptance of the Assignment Agreements. 4.02 Transfer Taxes . The Contributor shall pay, or cause to be paid, all sales taxes, use taxes, transfer taxes, and recording fees (and any interest and penalties related thereto "Taxes") imposed on or applicable to the transfers of the Assets by (i) Contributor to Contributee pursuant to this Agreement, except for Taxes attributable solely to the actions or inactions of Contributee, (ii) Contributee to RRAMP Investments, L.L.C., except for Taxes attributable solely to the actions or inactions of RRAMP Investments, L.L.C., or (iii) RRAMP Investments, L.L.C. to PCI Air Management Partners, L.L.C., except for Taxes attributable solely to the actions or inactions of PCI Air Management Partners, L.L.C. 4.03 Indemnification . Contributor shall indemnify and hold harmless the Contributee RRAMP Investments, L.L.C., and PCI Air Management Partners, L.L.C. from and against any and all claims, losses, liabilities and damages, including, without limitation, amounts paid in settlement, reasonable costs of investigation and reasonable fees and disbursements of counsel, arising out of or resulting from the inaccuracy of any representation or warranty, or the breach of any covenant or agreement, contained herein or in any of the Assignment Agreements or in any instrument or certificate delivered pursuant hereto. ARTICLE 5. MISCELLANEOUS PROVISIONS 5.01 Amendment and Modification . This Agreement may be amended, modified or supplemented only by written agreement of the parties hereto and with the prior written consent of AM-BT Nevada, Inc. ("BT"). 5.02 Waiver of Compliance; Consents . Any failure of a party to comply with any obligation, covenant, agreement or condition herein may be waived by the other party; provided, however, that any such waiver may be made only by a written instrument signed by the party granting such waiver and consented to in writing by BT, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 5.02, with appropriate notice in accordance with Section 5.08 of this Agreement. 5.03 Assignment . This Agreement and all of the provisions hereof shall be binding upon the parties hereto and their respective successors and permitted assigns and shall inure to the benefit of BT, the parties hereto, their respective successors and permitted assigns. Any party may assign any of its rights hereunder, but no such assignment shall relieve it of its primary liability for its obligations hereunder. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person other than BT, the parties hereto, any successors and permitted assigns any rights, remedy or claim under or by reason of this Agreement or any provision herein contained. 5.04 Expenses. In the event that the transactions contemplated by this Agreement are consummated, all fees and expenses (including all fees of counsel and accountants) incurred by any party in connection with the negotiation and execution of this Agreement and any Assignment Agreement shall be borne by the Contributor and BT. Any such fees and expenses not so authorized to be paid by the Contributor and BT shall be borne by the party who incurred them. 5.05 Further Assurances . From time to time, at the request of the Contributor or BT and without further consideration, each party, at its own expense, will execute and deliver such other documents, and take such other action, as the Contributor or the Contributee may reasonably request in order to consummate more effectively the transactions contemplated hereby and to vest in Contributee and its successors good and marketable title to the Assets. 5.06 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to its conflicts of law doctrines). The Contributor and the Contributee each (i) irrevocably submits to the jurisdiction of any New York State court or federal court sitting in New York City in any action arising out of this Agreement or any Assignment Agreement or any instrument or document delivered hereunder or thereunder, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of inconvenient forum, and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court. 5.07 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become a binding Agreement when one or more of the counterparts have been signed by each of the parties and delivered to the other party. 5.08 Notices . All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed by registered or certified mall (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): If to the Contributor: Potomac Capital Investment Corporation 900 19th Street, N.W. Suite 600 Washington, D.C. 20006 Attention: Contracts Administrator If to the Contributee: 1575 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator with a copy to: Sierra Corporate Services 241 Ridge Street Reno, Nevada Attention: and with a copy to: AM-BT Nevada, Inc. c/o Lionel Sawyer & Collins 1700 Bank of America Plaza 300 South Fourth Street Las Vegas, Nevada 89101 5.09 Headings . The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 5.10 Entire Agreement . This Agreement, including the exhibits, schedules, other documents and instruments referred to herein, together with the Assignment Agreements, embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 5.11 Severability . If any one or more provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 5.12 Schedules . All Schedules attached hereto are hereby incorporated herein and made a part hereof as if set forth in full herein. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
		POTOMAC CAPITAL INVESTMENT CORPORATION By: ____________________________ Title:
		AMP FUNDING, L.L.C. By: ____________________________ Title:

SCHEDULE 1.01(a)

SCHEDULE 1.01(b)

12. Trust Agreement (N490US) dated as of March 1, 1984, between First Security Bank, as Owner Trustee, and Suburban Bank.

13. Trust Agreement (N493US) dated as of April 1, 1984, between First Security Bank, as Owner Trustee, and Suburban Bank.

SCHEDULE 1.01(c)

Part I
Original Aircraft Assignment and Assumption Agreements

1. Trust Assignment and Assumption Agreement (N31030), dated as of November 13, 1995, between Potomac Capital Investment Corporation (" PCIC ") and Wilmington Trust Company (" WTC ").

2. Assignment and Assumption Agreement No. 1 (N31030), dated as of November 13, 1995, between PCIC and AMP Funding, L.L.C. (" AMP Funding" ).

3. Trust Assignment and Assumption Agreement (N81026), dated as of November 13, 1995, between PCIC and WTC.

4. Assignment and Assumption Agreement No. 1 (N81026), dated as of November 13, 1995, between PCIC and AMP Funding.

5. Trust Assignment and Assumption Agreement (N81025), dated as of November 13, 1995, between PCIC and WTC.

6. Assignment and Assumption Agreement No. 1 (N81025), dated as of November 13, 1995, between PCIC and AMP Funding.

7. Trust Assignment and Assumption Agreement (N81028), dated as of November 13, 1995, between PCIC and WTC.

8. Assignment and Assumption Agreement No. 1 (N81028), dated as of November 13, 1995, between PCIC and AMP Funding.

9. Trust Assignment and Assumption Agreement (N511P), dated as of November 13, 1995, between PCIC and WTC.

10. Assignment and Assumption Agreement No. 1 (N511P), dated as of November 13, 1995, between PCIC and AMP Funding.

Part II
Additional Aircraft Assignment and Assumption Agreements

1. Assignment and Assumption Agreement No. 1 (N81027), dated as of November __, 1995, between PCIC and WTC.

2. Assignment and Assumption Agreement No. 2 (N81027), dated as of November __, 1995, between PCIC and AMP Funding.

3. Assignment and Assumption Agreement No. 1 (SE-DPP), dated as of November __, 1995, between PCIC and WTC.

4. Assignment and Assumption Agreement No. 2 (SE-DPP), dated as of November __, 1995, between PCIC and AMP Funding.

5. Assignment and Assumption Agreement No. 1 (SE-DPX), dated as of November __, 1995, between PCIC and WTC.

6. Assignment and Assumption Agreement No. 2 (SE-DPX), dated as of November __, 1995, between PCIC and AMP Funding.

7. Assignment and Assumption Agreement No. 1 (N76073), dated as of November __, 1995, between PCIC and WTC.

8. Assignment and Assumption Agreement No. 2 (N76073), dated as of November __,, 1995, between PCIC and AMP Funding.

9. Assignment and Assumption Agreement No. 1 (N14063), dated as of November __, 1995, between PCIC and WTC.

10. Assignment and Assumption Agreement No. 2 (N14063), dated as of November __, 1995, between PCIC and AMP Funding.

11. Assignment and Assumption Agreement No. 1 (N68065), dated as of November __, 1995, between PCIC and WTC.

12. Assignment and Assumption Agreement No. 2 (N68065), dated as of November __, 1995, between PCIC and AMP Funding.

13. Assignment and Assumption Agreement No. 1 (N19072), dated as of November __, 1995, between PCIC and WTC.

14. Assignment and Assumption Agreement No. 2 (N19072), dated as of November __, 1995, between PCIC and AMP Funding.

15. Assignment and Assumption Agreement No. 1 (N164UA), dated as of November __, 1995, between PCIC and AMP Funding.

16. Assignment and Assumption Agreement No. 1 (N165UA), dated as of November __, 1995, between PCIC and AMP Funding.

17. Assignment and Assumption Agreement No. 1 (N83870), dated as of November __, 1995, between PCIC and AMP Funding.

18. Assignment and Assumption Agreement No. 1 (N78019), dated as of November __, 1995, between PCIC and AMP Funding.

19. Assignment and Assumption Agreement No. 1 (N490US), dated as of November __, 1995, between PCIC and AMP Funding.

20. Assignment and Assumption Agreement No. 1 (N493US), dated as of November __, 1995, between PCIC and AMP Funding.

21. Assignment and Assumption Agreement No. 1 (TF-ABZ), dated as of November __, 1995, between PCIC and AMP Funding.

SCHEDULE 1.01(d)
YEAR	TAIL #	TYPE	SN#	LESSEE
1993	N611IFE	MD-11F	48604	Federal Express
1984	PH-BUV	B747-306 Combi	23137	undivided interest-KLM
1986	N521US	B757-251	23209	Northwest Airlines
1985	N122KH	B747-312	23033	Singapore Airlines
Various	N/A	11 Aircraft Engines	Various	ELF Engines
1987	N/A	2 CFM56-3-B2 Engines	Various	America West
1976	N506MC	B747-2D3BF	21252	Atlas Air
1979	N13983	A300	092	N/A

SCHEDULE 3.06 Original Aircraft
Tail No.	Aircraft Type	Airframe Serial Number	Engine Model No.	Engine Serial Number
N31030	L1011-100	1111	RB211-22B	10431 10075 10480
N81026	L1011-100	1104	RB211-22B	10085 10139 10487
N81025	L1011-100	1098	RB211-22B	10432 10434 10202
N81028	L1011-100	1108	RB211-22B	10086 10491 10340
N511P	B747-212B	21162	JT9D-7J	685725 689573 689569 689452
Additional Aircraft
Tail No.	Aircraft Type	Airframe Serial Number	Engine Model No.	Engine Serial Number
N81027	L1011-50	1107	RB211-22B	10107 10161 10339
SE-DPP	L1011-50	1072	RB211-22B	10484 10094 10112
SE-DPX	L1011-50	1091	RB211-22B	10068 10433 10196
N76073	DC10-30	46940	CF6-50C2	517474 455938 517523
N14063	DC10-30	47864	CF6-50C2	455953 455855 517670
N68065	DC10-30	46590	CF6-50C2	517626 517820 517833
N19072	DC10-30	46576	CF6-50C2	455431 517122 517398
N164UA	B747-238B	21657	JT9D-7J	P689504 P689617 P689609 P689528
N165UA	B747-238B	21658	JT9D-7J	P689616 P689619 P689610 P689608
N83870	MD-82	48056	JT8D-217	P708411D P708412D
N78019	B747-238B	20527	JT9D-7A	662347 662358 662892 662367 662202 662382
N490US	F-28-4000	11152	555-15	9605 9613 9621
N493US	F-28-4000	11161	555-15	9604 9679
TF-ABZ	B747-212B	21316	JT9D-7J	662995 662440 662748 685708

Schedule 3.09

Continental Airlines, Inc., DC10-30, N76073, S/N 46940:

Continental Airlines. Inc.. DC10-30, N14063. S/N 47864:

Tax Indemnity Agreement dated as of February 15, 1990, between Continental Airlines and PCI.

Continental Airlines. Inc.. DC10-30, N19072, S/N 46576:

Tax Indemnity Agreement dated as of February 15, 1990, between Continental Airlines and PCI.

Continental Airlines. Inc.. DC10-30, N68065, S/N 46590:

Tax Indemnity Agreement dated as of May 15, 1987, between Continental Airlines and PCI.

Continental Airlines. Inc.. MD-82. N83870. S/N 48056:

Aircraft Purchase Agreement dated as of August 15, 1988, among New York Airlines, Inc., the Trustee, Pegasus Capital Corporation, and Continental Airlines;

Assignment and Purchase Agreement dated as of July 14, 1989, between Pegasus Capital Corporation and PCI;

Assignment of Beneficial Interest dated as of July 28, 1989, between Pegasus Capital Corporation and PCI;

Tax Indemnity Agreement dated as of July 28, 1989, between. Continental Airlines and PCI.

Continental Micronesia. Inc.. B747-238B. N78019. S/N 20527:

Agreement to Lease dated as of March 26, 1990, between PCI, the Trustee and Continental Airlines, Inc.;

Tax Indemnity Agreement dated as of March 26, 1990, between Continental Airlines and PCI;

Aircraft Lease Assignment and Assumption Agreement dated as of April 27, 1993, between Continental Airlines and Continental Micronesia, Inc.;

Sublease Agreement dated as of April 27, 1993, between Continental Micronesia and Continental Airlines.

Trans World Airlines. Inc., L1011-50. N81027. S/N 1107:

International Nederlanden Aviation Lease B.V. ("ING""), L1011-50.SE-DPX. S/N 1091:

Aircraft Lease Agreement 1091 dated as of April 27, 1994, between PCI and ING, as supplemented by that Lease Supplement No. 1 dated as of April 28, 1994.

Internationale Nederlanden Aviation Lease B.V. ("ING"). L1011-50. SE-DPP. S/N 1072:

Aircraft Lease Agreement 1072 dated as of June 9, 1994, between PCI and ING, as supplemented by that Lease Supplement No. 1 dated as of June 9, 1994.

United Air Lines. Inc.. B747-238B. N164UA. S/N 21657:

Participation Agreement dated as of December 1, 1990, between United Air Lines, Inc. and PCI;

First Amended and Restated Lease Agreement dated as of December 1, 1991, between the Trustee and United Air Lines;

SBC Assignment and Assumption Agreement dated as of March 17, 1992, between Swiss Bank Corporation, New York Branch, and The Bank of New York;

NCC Assignment and Assumption Agreement dated as of April 21, 1992, between The Bank of New York and National Canada Corporation;

UBK Assignment and Assumption Agreement dated as of April 21, 1992, between The Bank of New York and The United Bank of Kuwait PLC.

United Air Lines, Inc.. B747-238B. N165UA. S/N 21658:.

Participation Agreement dated as of December 1, 1990, between United Air Lines, Inc. and PCI;

Lease Agreement dated as of August 19, 1991, between Trustee, as Lessor, and United Air Lines, as Lessee, as supplemented by the Lease Supplement No. 1, dated as of August 19, 1991;

Credit Agreement dated as of July 15, 1992, among the Trustee, PCI, The Nippon Credit Bank, Ltd., Los Angeles Agency, as Agent, and The Nippon Credit Bank and Den Norske Bank, as Lenders;

USAir. Inc.. F28-4000, N490US. S/N 11152:

Trust Agreement dated as of March 1, 1984 between Suburban Bank and First Security Bank of Utah, National Association;

Participation Agreement dated as of March 1, 1984 among Trustee, Suburban Bank, C.I.T. Corporation and Empire Airlines, Inc.;

Release dated as of December 31, 1987 by C.I.T./Equipment Financing, Inc.;

Aircraft Lease dated as of March 1, 1984 between Trustee and Empire Airlines, Inc., as supplemented by that Lease Supplement No. 1 dated as of March 1, 1984;

Purchase Agreement dated as of December 30, 1987 between Sovran Bank/Maryland, as successor in interest to Suburban Bank, and PCI.

USAir. Inc.. F28-4000. N493US. S/N 11161:

Trust Agreement dated as of April 1, 1984 between Suburban Bank and First Security Bank of Utah, National Association;

Participation Agreement dated as of April 1, 1984 among Trustee, Suburban Bank, C.I.T. Corporation and Empire Airlines, Inc.;

Release dated as of December 31, 1987 by C.I.T. Group/ Equipment Financing, Inc.;

Purchase Agreement dated as of December 30, 1987 between Sovran Bank/Maryland, as successor in interest to Suburban Bank, and PCI.

     STATE OF OELAWARE
    SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 01/10/1994
       940105092 - 2115369

Exhibit 3.11(b)

RESTATED CERTIFICATE OF INCORPORTION

AIRCRAFT INTERNATIONAL MANGEMENT COMPANY

Aircraft International Management Company, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

3. The text of the Certificate of Incorporation is hereby restated and amended to read in its entirety as follows:

1. The name of the corporation is:

Aircraft International Management Company

3. The nature of the business or purposes of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

5. The corporation is to have perpetual existence.

6. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:

To make, alter or repeal the By-Laws of the corporation.

7. Elections of directors need not be by written ballot unless the By-Laws of the corporation shall so provide.

9. No director shall be personally liable to the corporation or the stockholders for monetary damages for breach of fiduciary duty as a director except

(i) for any breach of his duty of loyalty to the corporation or the stockholders;

(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

(iii) for the unlawful payment of dividends or unlawful stock repurchases (as to which a negligence standard will apply); or

(iv) for any transaction from which the director derived an improper personal benefit.

IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been signed under the seal of the corporation this 6 ^th day of December, 1993.

ATTEST:

/s/ WM. SHAPIRO
Secretary

AIRCRAFT INTERNATIONAL
MANAGEMENT COMPANY

By: /s/ PAUL F. NAUGHTON
President

EXHIBIT 3.12(d)(i) PCI Trial Balance As of 11/01/95
				CURRENT PERIOD
ACCOUNT	SUB	DESCRIPTION	BEGINNING BALANCE	DEBIT	CREDIT	ENDING BALANCE
113000	08	Federal Income Tax Receivabl	-624.00	624.00	0.00	0.00
114002	08	Accounts Receivable - PCI	2,062,174.51	0.00	2 ,062,174.51	0.00
183000	08	Deferred Federal Inc. Tax Rec	89,100.00	0.00	89,100.00	0.00
191004	08	ST Notes Receivable from PCI	4,947.00	0.00	4,947.00	0.00
193000	08	Investment in Preferred Stocks	0.00	212,307,137.00	0.00	212,307,137.00
**Total Assets			2,155,597.51	212,307,761.00	2,156,221.51	212,307,137.00
201002	08	Accounts Payable - PCI	311,307.27	311,307.27	0.00	0.00
254000	08	Deferred FIT Payable - Other	-2,491.00	0.00	2,491.00	0.00
254006	08	DEFERRED F.I.T. - AMT	-162.00	0.00	162.00	0.00
271000	08	Common Stock	10,000.00	0.00	0.00	10,000.00
272000	08	Additional Paid-in Capital	190,000.00	0.00	210,460,193.76	210,650,193.76
274000	08	Retained Earnings	1,647,648.39	0.00	0.00	1,647,648.39
275000	08	YTD Net Income	-705.15	0.00	0.00	-705.15
**Total Liabilities			2,155,597.51	311,307.27	210,462,846.76	212,307,137.00
641000	08	Franchise Tax	130.15	0.00	0.00	130.15
651000	08	Misc. Expense	784.00	0.00	0.00	784.00
999200	08	FIT - Current - Other	-209.00	0.00	0.00	-209.00
**Total Income and Expense			-705.15	0.00	0.00	-705.15

Exhibit 3.12(d)(ii) Aircraft International Management Corporation (AIMC) Preferred Stock Portfolio
Company	Number of Shares	Par Value Per Share	Face Amount	Market Value
Puget Sound	160,000	100	16,000,000	16,800,000
Duke Power	20,000	100	2,000,000	2,125,000
Duke Power	30,000	100	3,000,000	3,217,500
Duke Power	47,000	100	4,700,000	4,888,000
Duke Power	118,350	100	11,835,000	12,781,800
Louisville Gas & Electric	43,100	100	4,310,000	4,396,200
Public Service Gas & Electric	77,500	100	7,750,000	7,711,250
Consolidated Edison	62,500	100	6,250,000	6,500,000
Consolidated Edison	89,000	100	8,900,000	9,256,000
Florida Power & Light	29,080	100	2,908,000	2,973,430
Ford Holdings Inc. Series B	252	100,000	25,200,000	24,822,000
Ford Holdings Series G	228	100,000	22,800,000	22,971,000
Ford Series N	30	100,000	3,000,000	3,120,000
Interstate Power	103,000	50	5,150,000	5,072,750
Southern Cal Edison	49,450	100	4,945,000	5,142,800
Southern Cal Edison	22,000	100	2,200,000	2,354,000
Pacific Gas & Electric	585,900	25	14,647,500	14,793,975
Pacific Gas & Electric	142,000	25	3,550,000	3,621,000
Virginia Electric Power	130,000	100	13,000,000	13,650,000
Appalachian Power	91,400	100	9,140,000	9,083,332
Appalachian Power	100,000	100	10,000,000	10,650,000
New York Slate Electric & Gas	280,000	25	7,000,000	7,350,000
New York State Electric & Gas	67,100	100	6,710,000	6,777,100
Ohio Power Company	122,500	100	12,250,000	12,250,000
TOTAL				212,307,137

				EXHIBIT H
		FORM OF PCI NOTE
$__________				[Date]
For value received, the undersigned (the " *Maker"* ) promises to pay to the order of a ______ a _____( *"Lender"* ), the amount of ________ ($________) together with interest thereon at a rate per annum. equal to_______(_%) in legal and lawful money of the United States of America. Accrued interest shall be payable on March 3 1, June 30, September 30 and December 31 (or if such day is not a Business Day, on the next Business Day thereafter of each year) (in each case, a *"Payment Date"* ). Interest on this Note shall accrue for the applicable period from December 31 up to the next March 3 1, from March 31 up to the next June 30, from June 30 up to the next September 30 and from September 30 up to the next December 31 (each, a *"Quarterly Interest Period"* ) For any interest period which is less than a full Quarterly Interest Period interest shall be computed based on the premise that a year contains 360 days consisting of twelve (12) months of thirty (30) days each and shall be charged on a per them basis. For this Note the term *"Business Day"* means a day of the year on which banks are not required or authorized to close in New York, New York. This Note is due and payable upon [demand] [the earlier of (i) demand and (ii)_______, _____] (the *"Maturity Date"* ). Demand for payment may be made in one or more installments, provided that the aggregate amount of all such demands shall not exceed the face amount hereof [The unpaid principal balance hereof shall be due and payable on the Maturity Date.] This Note may be prepaid, in whole or in part, by the Maker without prepayment penalty. It is expressly provided that upon default in the punctual payment of this Note or any part hereof, as the same shall become due and payable, the entire indebtedness evidenced hereby shall mature, at the option of the Lender. In the event this Note, or any part hereof, is collected through bankruptcy or other judicial proceedings by an attorney or is placed in the hands of an attorney for collection after maturity, then the undersigned agrees and promises to pay a reasonable attorney's fee for collection. The Maker of this Note expressly waives all notices, demands for payment upon the Maturity Date, presentation for payment, protest and notice of protest, as to this Note, and consents that the Lender or other holder of this Note may at any time, and from time to time, upon request of or by agreement with the Maker, extend the maturity hereof or change the time or method of payments hereunder. The Maker of this Note further waives any right to plead the statute of limitations as a defense to any demand upon this Note and, in the event such waiver is declared invalid, Maker hereby agrees to extend the applicable statute of limitations for a period of four years from the date of expiration of the time limited for commencement of an action upon this Note by the applicable statute of limitations. The Maker covenants and agrees that until this Note, together with interest and all other obligations included hereunder, are paid in full, it will not modify to any material extent or substantially terminate the Subscription Agreement dated as of November 30, 1993 between the Maker and Potomac Electric Power Company, except that the Maker may agree to an extension of the termination date of the Subscription Agreement. The Maker will not create, assume or incur or suffer to be created, assumed or incurred or to exist any mortgage, lien, charge, security interest or encumbrance of any kind upon, or pledge of, or subject to the prior payment of any indebtedness, any of its property or assets, whether now owned or hereafter acquired, or acquire or agree to acquire any property or assets subject to any conditional sale agreement or other title retention agreement (the foregoing mortgages, liens, charges, pledges, security interests, encumbrances and priority payments, and the rights of others under conditional sales agreements and other title retention agreements, being herein sometimes collectively called "liens"); provided, however, that the foregoing restrictions will not apply to:
	(i) liens securing taxes, assessments or governmental charges or levies or the claims or demands of materialmen, mechanics, carriers, warehousemen, landlord and other like persons; (ii) liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance, social security and other like laws; (iii) purchase money mortgages or other purchase money liens or conditional sale, lease-purchase or other title retention agreements upon or in respect of property acquired or leased for in the ordinary course of its business by the Maker; (iv) liens on any assets of the Maker or any of its subsidiaries which may constitute "Margin Stock" (as defined in Regulation G of the Board of Governors of the Federal Reserve System); or (v) other mortgages or liens in respect of property owned, acquired or leased by the Maker not permitted by clauses (i) through (iv); provided that the property so, encumbered pursuant to this clause (v) shall not have a market value in excess of 50% of the amount by which the Maker's total assets (on a conditional basis with its subsidiaries) exceeds the encumbrances made as provided in clause (iii) above.
The Maker (including its consolidated subsidiaries) will maintain a minimum tangible net worth (calculated in accordance with generally accepted accounting principles) in effect on the date of this Note of at least $ 100,000,000. The fair market value of investment grade marketable securities owned by the Maker (including its consolidated subsidiaries) will at no time be less than $150,000,000. This Note shall be governed by the laws of the State of New York.
			POTOMAC CAPITAL INVESTMENT CORPORATION By: _____________________________ Name: Title:

CERTIFICATE OF INCORPORATION OF ATE II, INC.
FIRST: The name of the Corporation is ATE II, Inc. SECOND: The registered office of ATE II, Inc. in the State of Delaware is located at 800 King Street, Wilmington, County of New Castle, 19801, and its registered agent shall be Conectiv Resource Partners, Inc., c/o Legal Department. THIRD: The purpose of the Corporation and the nature and objects of the business to be transacted, promoted, conducted or carried out are:
		To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock that the Corporation shall be authorized to issue is Two Thousand Five Hundred (2,500) shares of Common Stock having no par value. FIFTH: The name and mailing address of the Incorporator of the Corporation is:
	Name			Address
	Diana C. DeAngelis			P.O. Box 231
				Wilmington, DE 19899
SIXTH: The names and mailing addresses of the directors who shall serve until the first annual meeting of stockholders or until their successors are elected and qualify are:
	Name			Address
	Howard E. Cosgrove			P.O. Box 231
				Wilmington, DE 19899
	John C. van Roden, Jr.			P.O. Box 231
				Wilmington, DE 19899
	Peter F. Clark			P.O. Box 231
				Wilmington, DE 19899
SEVENTH: The Board of Directors may make, add to, delete from, alter and repeal any By-law of the Corporation. EIGHTH: No director of the Corporation shall be personally liable to the Corporation for monetary damages for breach of fiduciary duty by such director; provided, however, that this Article EIGHTH shall not eliminate or limit the liability of a director to the extent provided by law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. I, the undersigned, being the Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this Certificate of Incorporation, hereby declaring and certifying that this is my act and deed and that the facts herein stated are true and accordingly have hereunto set my hand and seal this 1 ^st day of March, 2002.
			/s/ Diana C. DeAngelis Diana C. DeAngelis

B Y L A W S

OF

ATE INVESTMENT, INC.

1.             OFFICES .

            1.1       Offices . In addition to its registered office in the State of Delaware, the Corporation shall have a corporate office in Wilmington, Delaware, and such other offices, either within or without the State of Delaware, at such locations as the Board of Directors may from time to time determine or the business of the Corporation may require.

2.              SEAL .

            2.1       Seal . The Corporation shall have a seal, which shall have inscribed thereon its name and year of incorporation and the words, "Corporate Seal Delaware."

3.              MEETINGS OF STOCKHOLDERS .

            3.1       Annual Meetings . The annual meeting of stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as shall be determined by the Board of Directors from time to time.

            3.2       Special Meetings . Special meetings of the stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as may be designated by the Chairman of the Board or by the Board of Directors.

            3.3       Notice of Meetings . (a) Notices of meetings of stockholders shall be in writing and shall state the place, date, and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which a meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting.

                   (b)       Such notice shall either be delivered personally, mailed, postage prepaid, or delivered by any other lawful means to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. If mailed, the notice shall be directed to the stockholder at his or her address as it appears on the records of the Corporation. Delivery of any such notice to any officer of a corporation or association or to any member of a partnership shall constitute delivery of such notice to such corporation, association, or partnership.

                   (c)       Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder in writing, whether before or after such meeting is held, or if such stockholder shall sign the minutes or attend the meeting, except that if such stockholder attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, such stockholder shall not be deemed to have waived notice of such meeting.

            3.4       Adjourned Meetings . When a meeting is adjourned to another time or place, unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders may transact any business that might have been transacted at the original meeting. If an adjournment is for more than 30 days, or if after an adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

            3.5       Quorum and Adjournment . Except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, or by these Bylaws, the presence, in person or by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction of business at all meetings of stockholders. If such majority shall not be present or represented at any meeting of stockholders, the stockholders present, although less than a quorum, shall have the power to adjourn the meeting.

            3.6       Vote Required . Except as otherwise provided by law or by the Certificate of Incorporation:

                   (a)       Directors shall be elected by a plurality of the votes present in person or represented by proxy at a meeting of stockholders and entitled to vote in the election of directors, and

                   (b)       whenever any corporate action other than the election of Directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or by proxy at a meeting of stockholders and entitled to vote on the subject matter.

            3.7       Manner of Voting . At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Each stockholder shall be entitled to vote each share of stock having voting power registered in his or her name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting.

            3.8       Stockholder Action Without a Meeting. Except as otherwise provided by law or by the Certificate of Incorporation, any action required to be taken at any meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of the holders to take the action were delivered to the Corporation.

            3.9       Proxies . (a) At any meeting of stockholders, any stockholder may be represented and vote by proxy or proxies. In the event that any form of proxy shall designate two or more persons to act as proxies, a majority of such persons present at the meeting or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by the form of proxy upon all of the persons so designated unless the form of proxy shall otherwise provide.

                   (b)       The Board of Directors may, in advance of any annual or special meeting of the stockholders, prescribe additional regulations concerning proxies and the validation of the same, which are intended to be voted at any such meeting.

            3.10       Presiding Officer and Secretary . The Chairman of the Board shall act as chairman of all meetings of the stockholders. In the absence of the Chairman of the Board, the Vice Chairman of the Board or, in his or her absence, any Director designated by the Chairman of the Board or the Board of Directors shall act as chairman of the meeting.

            The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 5.11(b) of these Bylaws shall act as secretary of all meetings of the stockholders, but in the absence of a designated Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

            3.11       Procedure . At each meeting of stockholders, the chairman of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting and shall determine the order of business and all other matters of procedure. Except to the extent inconsistent with any such rules and regulations as adopted by the Board of Directors, the chairman of the meeting may establish rules, which need not be in writing, to maintain order and safety and for the conduct of the meeting. Without limiting the foregoing, he or she may:

                   (a)       restrict attendance at any time to bona fide stockholders of record and their proxies and other persons in attendance at the invitation of the chairman;

                   (b)       restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting;

                   (c)       adjourn the meeting without a vote of the stockholders, whether or not there is a quorum present; and

                   (d)       make rules governing speeches and debate, including time limits and access to microphones.

The chairman of the meeting shall be entitled to act in his or her absolute discretion and his or her rulings shall not be subject to appeal.

4.              DIRECTORS .

            4.1       Powers and Number . The Board of Directors shall exercise all of the powers of the Corporation except such as are by law, or by the Certificate of Incorporation of this Corporation or by these Bylaws conferred upon or reserved to the stockholders of any class or classes. The number of directors that shall constitute the whole Board of Directors shall be no fewer than three (3) and no greater than nine (9), the exact number of directors to be determined from time to time by resolution adopted by the Board of Directors or the stockholders, and until otherwise determined by the Board of Directors or the stockholders, the number of directors that shall constitute the whole Board of Directors shall be three (3).

            4.1       Resignations . Any Director may resign at any time by giving written notice to the Board of Directors or the Secretary. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective.

            4.2       Presiding Officer and Secretary . The Chairman of the Board shall act as chairman of all meetings of the Board of Directors. In the absence of the Chairman of the Board, the Vice Chairman of the Board, or in the Vice Chairman's absence, the Chief Executive Officer or other person designated by the Board of Directors shall act as chairman of the meeting.

                  The Secretary of the Corporation shall act as secretary of all meetings of the Board of Directors, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 5.11(b) of these Bylaws shall act as secretary of all meetings of the Board of Directors, but in the absence of a designated Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

            4.3       Annual Meetings . The Board of Directors shall meet each year immediately following the annual meeting of stockholders, at the place where such meeting of stockholders has been held, or at such other place as shall be fixed by the person presiding over the meeting of the stockholders, for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation. In the event that in any year Directors are elected by written consent in lieu of an annual meeting of stockholders, the Board of Directors shall meet in such year as soon as practicable after receipt of such written consent by the Corporation at such time and place as shall be fixed by the Chairman of the Board, for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation.

            4.4       Regular Meetings . Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the state of Delaware, as shall from time to time be determined by the Board of Directors. In the absence of any such determination, such meetings shall be held at such times and places, within or without the State of Delaware, as shall be designated by the Chairman of the Board on not less than twelve hours notice to each Director, given verbally, in writing or electronically, whether personally, by telephone (including by message or recording device), by facsimile transmission, by telegram, by telex, by electronic mail or by other electronic means, or on not less than three (3) calendar days' notice to each Director given by mail. Notice given by any of the foregoing means shall be sufficient to constitute notice of a meeting without the necessity of further notice.

            4.5       Special Meetings . Special meetings of the Board of Directors shall be held at the call of the Chairman of the Board at such times and places, within or without the State of Delaware, as he or she shall designate, on not less than twelve hours notice to each Director, given verbally, in writing or electronically, whether personally, by telephone (including by message or recording device), by facsimile transmission, by telegram, by telex, by electronic mail or by other electronic means or on not less than three (3) calendar days' notice to each Director given by mail. Notice given by any of the foregoing means shall be sufficient to constitute notice of a meeting without the necessity of further notice. Special meetings shall be called by the Secretary on like notice at the written request of a majority of the Directors then in office.

            4.6       Quorum and Powers of a Majority . At all meetings of the Board of Directors and of each committee thereof, a majority of the members shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the members present at any meeting at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of law, of the Certificate of Incorporation, or of these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present.

            4.7       Waiver of Notice . Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing, whether before or after such meeting is held, or if he or she shall sign the minutes or attend the meeting, except that if such Director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such Director shall not be deemed to have waived notice of such meeting.

            4.8       Manner of Acting . (a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

                   (b) Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writings are filed with the minutes of proceedings of the Board of Directors or such committee.

            4.9       Compensation . (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors.

                   (b) Each Director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof.

                   (c) Nothing contained in these Bylaws shall be construed to preclude any Director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.

            4.10       Committees . The Board of Directors (or any committee thereof having the power and authority to do so) may designate one or more committees, each committee to consist of one or more Directors, which to the extent provided in the resolution or resolutions designating such committee shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the corporation; provided, however, that no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporation Law of Delaware (the "GCLD") to be submitted to stockholders for approval or (ii) adopting, amending, or repealing any bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member of members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of such absent or disqualified director.

            4.11       Committee Procedure, Limitations of Committee Powers . (a) Except as otherwise provided by these Bylaws, each committee shall adopt its own rules governing the time, place and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 4.6 of these Bylaws with respect to notices of special meetings of the Board of Directors.

                   (b)       Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required.

                   (c)       Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee shall be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee.

5.              OFFICERS .

            5.1       Number . (a) The officers of the Corporation shall include a Chief Executive Officer, a President, one or more Vice Presidents (including one or more Executive Vice Presidents and one or more Senior Vice Presidents if deemed appropriate by the Board of Directors), a Chief Financial Officer, a Secretary, a Treasurer, and a Controller. The Board of Directors shall also elect a Chairman of the Board and may elect a Vice Chairman of the Board. Except for the Chairman of the Board, the Vice Chairman of the Board, and the Chief Executive Officer, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the GCLD.

             (b)       The Chief Executive Officer shall have the power to appoint one or more employees of the Corporation as divisional or departmental vice presidents and fix the duties of such appointees. However, no such divisional or departmental vice president shall be considered an officer of the Corporation.

            5.2       Election of Officers, Qualification and Term . The Chief Executive Officer, the President, any Executive Vice President, any Senior Vice President, the Chief Financial Officer, the Secretary and the Treasurer of the Corporation shall be elected from time to time by the Board of Directors and, except as may otherwise be expressly provided in a contract of employment duly authorized by the Board of Directors, shall hold office at the pleasure of the Board of Directors. The Board of Directors and the Chief Executive Officer also may elect such other officers as the Board of Directors or the Chief Executive Officer may from time to time deem appropriate or necessary.

            5.3       Removal . Any officer elected by the Board of Directors may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the Chairman of the Board or the Chief Executive Officer, by the Chairman of the Board or the Chief Executive Officer.

            5.4       Resignations . Any officer of the Corporation may resign at any time by giving written notice to the Board of Directors or to the Chairman of the Board or to the Chief Executive Officer. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

            5.5       Compensation . The compensation of all officers of the Corporation shall be fixed by or in the manner provided by the Board of Directors from time to time, and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a Director of the Corporation.

            5.6       The Chairman of the Board . The Chairman of the Board shall have the powers and duties customarily and usually associated with the office of the Chairman of the Board and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. The Chairman of the Board shall preside at meetings of the stockholders and of the Board of Directors.

            5.7       Vice Chairman of the Board . The Vice Chairman of the Board, if any, shall have the powers and duties customarily and usually associated with the office of the Vice Chairman of the Board and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors.

            5.8       Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction and management of the affairs and business of the Corporation usually vested in the chief executive officer of a corporation, including, without limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. If at any time the offices of the Chairman of the Board and the Vice Chairman of the Board shall not be filled, or in the event of the temporary absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall have the powers and duties of the Chairman of the Board.

            5.9       The President . The President shall serve as chief operating officer, shall have the powers and duties customarily and usually associated with the office of the President and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            5.10       The Vice Presidents . Each Vice President shall have such powers and duties customarily and usually associated with the office of Vice President and shall have such other powers and perform such other duties as may from time to time be assigned to him or her by the Board of Directors, the Chief Executive Officer, or the President.

            5.11       The Chief Financial Officer . The Chief Financial Officer shall be responsible for the financial affairs of the Corporation, including overseeing the duties performed by the Treasurer of the Corporation. In addition, the Chief Financial Officer shall have such powers and duties customarily and usually associated with the office of the Chief Financial Officer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            5.12       The Secretary and the Assistant Secretary . (a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. In addition, the Secretary shall have such powers and duties customarily and usually associated with the office of Secretary and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors, the Chief Executive Officer, or the President.

                   (b)       Each Assistant Secretary shall have such powers and perform such duties customarily and usually associated with the office of Assistant Secretary and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President, or the Secretary. In case of the absence or disability of the Secretary, the Assistant Secretary designated by the Chief Executive Officer (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary.

            5.13       The Treasurer and the Assistant Treasurer . (a) The Treasurer shall have custody of the Corporation's funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall also maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall see that adequate audits thereof are currently and regularly made. In addition, the Treasurer shall have such powers and duties customarily and usually associated with the office of Treasurer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President or the Chief Financial Officer.

                   (b)       Each Assistant Treasurer shall have such powers and perform such duties customarily and usually associated with the office of Assistant Treasurer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President, or the Treasurer. In case of the absence or disability of the Treasurer, the Assistant Treasurer designated by the Chief Executive Officer (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.

            5.14       Controller . The Controller shall be responsible for maintaining the accounting records and statements, and shall properly account for all monies and obligations due the Corporation and all properties, assets, and liabilities of the Corporation. The Controller shall render to the Chairman of the Board, the President or the Chief Financial Officer such periodic reports covering the results of operations of the Corporation as may be required by either of them or by law. In addition, the Controller shall have such powers and duties customarily and usually associated with the office of Controller and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President or the Chief Financial Officer.

6.              STOCK

            6.1       Certificates . Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder's name and the number of shares evidenced thereby, and shall be signed by the Chairman of the Board or a Vice Chairman, if any, or the Chief Executive Officer or the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.

            6.2       Transfers . Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, provided such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books.

            6.3       Lost, Stolen, or Destroyed Certificates . Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.

            6.4       Registered Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares as the person entitled to exercise the rights of a stockholder and shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the GCLD.

            6.5       Additional Powers of the Board . (a) In addition to those powers set forth in Section 4.1, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock subject to the provisions of the GCLD.

                   (b)       The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.

7.              INDEMNIFICATION

            7.1      Each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or the person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation, as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the GCLD, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expenses, liability, and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of his or her heirs, executors, and administrators; provided, however, that, except as provided in Section 7.2 of this Article 7, the Corporation shall not be required to indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation prior to commencement of such proceeding (or part thereof). In addition to the right to indemnification conferred in this Section 7.1, each person who is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise shall have the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the GCLD requires, the payment of such expenses incurred by a present director or officer in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such person while a director or officer of the Corporation, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such present director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article 7 or otherwise.

            7.2      If a claim under Section 7.1 of this Article 7 is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim (including attorneys' fees). It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the GCLD for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD, nor an actual determination by the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. In any suit brought by the claimant to enforce a right to indemnification or to an advancement of expenses under Section 7.1 of this Article 7, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the claimant is not entitled to be indemnified, or to such advancement of expenses, under this Article 7 or otherwise shall be on the Corporation.

            7.3      The rights with respect to indemnification and advancement of expenses conferred in Sections 7.1 and 7.2 of this Article 7 shall be contract rights.

            7.4      The Corporation may, by any manner permitted by the GCLD, provide indemnification and advancement of expenses to employees and agents of the Corporation.

            7.5      Any indemnification under this Article 7 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD. Such a determination shall be made, with respect to a person who is a director or officer of the Corporation at the time of such determination, (a) by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum; (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (c) if there are no such directors or if such directors so direct, by independent legal counsel (compensated by the Corporation) in a written opinion; or (d) by the stockholders. Such a determination shall be made, with respect to a person who is a former director or officer of the Corporation, who is a present or former employee or agent of the corporation, or who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, in any manner permitted by the GCLD, including in any of the manners set forth above governing such determination with respect to present directors and officers of the Corporation.

            7.6      The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article 7, shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the certificate of incorporation of the Corporation, these bylaws, agreement, vote of stockholders or disinterested directors, or otherwise.

            7.7      The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee, or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any such expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the GCLD.

            7.8      The Corporation may enter into an indemnity agreement with any director, officer, employee, or agent of the Corporation, or of another corporation, partnership, joint venture, trust, or other enterprise, upon terms and conditions that the Board of Directors deems appropriate, as long as the provisions of the agreement are not impermissible under applicable law.

            7.9      Any amendment or repeal of this Article 7 shall not be retroactive in effect.

            7.10      In case any provision in this Article 7 shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to the persons indemnified hereby to the fullest extent permitted by law.

            7.11      The Corporation may, by action of the Board of Directors, authorize one or more officers (i) to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officer or officers deem appropriate under the circumstances, or (ii) to establish policies relating to the indemnification of and advancement of expenses to employees and agents of the Corporation, including, without limitation, policies specifying officers or senior employees (or categories of officers or senior employees) who shall have the power to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officers or senior employees deem appropriate under the circumstances.

8.              MISCELLANEOUS

            8.1       Place and Inspection of Books . (a) The books of the Corporation other than such books as are required by law to be kept within the State of Delaware shall be kept in such place or places either within or without the State of Delaware as the Board of Directors may from time to time determine.

                   (b)       At least ten days before each meeting of stockholders, the officer in charge of the stock ledger of the Corporation shall prepare a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

                   (c)       The Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the accounts and books of the Corporation (except such as may be by law specifically open to inspection or as otherwise provided by these Bylaws) or any of them shall be open to the inspection of the stockholders and the stockholders' rights in respect thereof.

            8.2       Voting Shares in Other Corporations . The Chief Executive Officer, the President, the Chief Financial Officer or any other officer of the Corporation designated by the Board of Directors may vote any and all shares or other interests held by the Corporation in any other corporation, limited partnership, limited liability company, or other business entity.

            8.3       Fiscal Year . The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

            8.4       Gender/Number . As used in these Bylaws, the masculine, feminine, or neuter gender, and the singular or plural number, shall each include the others whenever the context so indicates.

            8.5       Paragraph Titles . The titles of the paragraphs have been inserted as a matter of reference only and shall not control or affect the meaning or construction of any of the terms and provisions hereof.

            8.6       Amendment . These Bylaws may be altered, amended, or repealed by (a) the affirmative vote of the holders of a majority of the voting power represented by the then outstanding shares of voting stock entitled to vote on the amendment, or (b) by resolution adopted by the affirmative vote of not less than a majority of the Directors in office, at any annual or regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of the proposed alteration, amendment, or repeal be contained in written notice of such special meeting. Notwithstanding the foregoing, the amendment of any provision of these Bylaws that requires an affirmative vote in excess of a majority of the Directors in office shall require the affirmative vote of at least the number of directors the affirmative vote of whom is required by such provision.

            8.7       Certificate of Incorporation . Notwithstanding anything to the contrary contained herein, if any provision contained in these Bylaws is inconsistent with or conflicts with a provision of the Certificate of Incorporation, such provision of these Bylaws shall be superseded by the inconsistent provision in the Certificate of Incorporation to the extent necessary to give effect to such provision in the Certificate of Incorporation.

CERTIFICATE OF MERGER OF ATE INVESTMENT, INC. A New Jersey Corporation INTO ATE II, INC. A Delaware Corporation, qualified to do business in New Jersey
TO: Secretary of State State of New Jersey Pursuant to the pertinent provisions of Chapter 10 of the New Jersey Business Corporation Act, the undersigned corporations hereby execute the following Certificate of Merger.
ARTICLE I
ATE Investment, Inc. ("ATE"), a corporation organized and existing under the laws of the State of New Jersey, shall be, and hereby is, merged with and into ATE II, Inc., a corporation organized and existing under the laws of the State of Delaware and ATE II, Inc. shall be the surviving corporation of the merger (hereinafter the "Surviving Corporation"). The name of the Surviving Corporation after the effective date of the merger shall be changed to ATE Investment, Inc.
ARTICLE II
The Plan and Agreement of Merger embodied in Exhibit A hereto (the "Plan of Merger"), was approved by unanimous consent of all of the shareholders and directors of ATE on March 12 ^th , 2002. The Plan and Agreement of Merger embodied in Exhibit A was approved by unanimous consent of all of the shareholders and directors of the Surviving Corporation on March 12 ^th , 2002.
ARTICLE III
As to each corporation whose shareholders are entitled to vote , the number of shares entitled to vote is as follows:
Name of Corporation		Total Number of Shares Entitled to Vote			Total Number of Shares Voting in Favor
ATE Investment, Inc		100			100
ATE II, Inc.		100			100
ARTICLE IV
As to both corporations, the Plan and Agreement of Merger was approved by unanimous written consent without a meeting of all shareholders and directors of each such corporation pursuant to the New Jersey Business Corporation Act and the Delaware General Corporation Law. No shares voted against the merger.
ARTIVLE V
The laws of the State of Delaware, the jurisdiction under which the Surviving Corporation was organized, which are applicable to the merger in this Certificate of Merger, have been, or upon compliance with the applicable Delaware filing and recording requirements will have been, complied with.
ARTICLE VI
The Surviving Corporation hereby agrees that it may be served with process in the State of New Jersey in any proceeding for the enforcement of any obligation of ATE.
ARTICLE VII
The merger shall take effect at 11:59p.m. on March 14, 2002. IN WITNESS WHEREOF, each of the undersigned corporations has caused this Certificate of Merger to be executed in its name by an authorized officer, as of the 12 ^th day of March, 2002.
				ATE II, INC. /s/ John C. van Roden, Jr. By: John C. van Roden, Jr. Title: Senior Vice President ATE INVESTMENT, INC. /s/ John C. van Roden, Jr. By: John C. van Roden, Jr. Title: Senior Vice President
Exhibit A
PLAN AND AGREEMENT OF MERGER OF ATE INVESTMENT, INC. INTO ATE II, INC.
PLAN AND AGREEMENT OF MERGER made this 12 ^th day of March, 2002. between ATE Investment, Inc., a New Jersey corporation (hereinafter "ATE" or "Merging Corporation"), and ATE II, Inc. a Delaware corporation (hereinafter "ATEII" or "Surviving Corporation"). The following Agreement and Plan of Merger is adopted under the appropriate provisions of Section 14A:10-7(4) of the New Jersey Business Corporation Act and Section 252 of the General Corporation Law of the State of Delaware, pursuant to which ATE Investment, Inc., a New Jersey corporation, shall be merged into ATE II, Inc., a Delaware corporation and ATE II, Inc., a Delaware corporation shall be the surviving corporation. NOW THEREFORE, the parties hereto hereby agree as follows:
	(a) The names of the corporations proposing to merge are ATE Investment, Inc., a New Jersey corporation and ATE II, Inc., a Delaware corporation. ATE shall merge, and hereby merges, with and into ATEII, and ATEII shall be, and hereby is, the surviving corporation of such merger. (b) The laws of State of Delaware, the state under which the Surviving Corporation is organized, permit such merger, and the applicable provisions of the laws of said jurisdiction under which the Surviving Corporation is organized have been, or upon compliance with the filing and recording requirements will have been, complied with. (c) The terms and conditions of the proposed merger are as follows: This Plan and Agreement of Merger shall become effective immediately upon compliance with the laws of the States of Delaware and New Jersey and the time of such effectiveness is hereinafter referred to as the "Effective Date". As of the Effective Date, the separate existence and corporate organization of ATE, except insofar as it may be continued by operation of law, shall be terminated and it shall be merged with and into ATEII. As of Effective Date, ATEII shall be the surviving corporation of the merger and shall continue its corporate existence under the laws of the State of Delaware. (d) The Method of converting the shares of the Merging Corporation into shares of the Surviving Corporation shall be as follows:
(i) each share of ATE common stock issued to Atlantic Generation, Inc. and outstanding immediately prior to the Effective Date, shall receive one share of fully paid and non assessable Surviving Corporation common stock. (ii) each share of ATE common stock issued to Conectiv Solutions LLC and outstanding immediately prior to the Effective Date, shall be cancelled.
	(e) Each share of ATEII common stock issued to Conectiv Solutions LLC and outstanding immediately prior to the Effective Date shall remain issued and outstanding common stock of the Surviving Corporation. (f) The following additional provisions also apply to the proposed merger:
(i) Article First of the existing Certificate of Incorporation of ATEII as of the Effective Date shall be amended so that the name of the Surviving Corporation thereafter shall be "ATE Investment, Inc.", and the existing Certificate of Incorporation of ATEII as of the Effective Date, as so amended, shall be the Certificate of Incorporation of the Surviving Corporation following the Effective Date unless and until further amended or repealed in accordance with the provisions thereof and/or applicable law. (ii) the existing By-laws of ATEII on the Effective Date shall be the By-laws of the Surviving Corporation following the Effective Date, unless and until amended or repealed in accordance with the provisions thereof, the Certificate of Incorporation of ATEII, and/or applicable law. (iii) the existing directors and officers of ATEII on the Effective Date shall be the directors and officers, respectively, of the Surviving Corporation on and after the Effective Date until expiration of their current terms and until their successors are elected and qualified, or prior resignation, removal, or death, subject to the Certificate of Incorporation and By-laws of the Surviving Corporation and subsequent actions by stockholders and/or directors of the Surviving Corporation.
	(g) ATEII is qualified to do business in the State of New Jersey. The registered agent for ATEII in the State of New Jersey is the Corporation Trust Company. The address of the Surviving Corporation's registered office in New Jersey is 820 Bear Tavern Road, West Trenton, County of Mercer, New Jersey, 08628. (h) If at any time the Surviving Corporation shall consider or be advised that any acknowledgements or assurances in law or other similar actions are necessary or desirable in order to acknowledge or confirm in and to the Surviving Corporation any right title and interest held by the Merging Corporation held immediately prior to the Effective Date, the Merging Corporation and its proper officers and directors shall, and will, execute and deliver all such acknowledgements or assurances in law and do all things necessary or proper to acknowledge or confirm such right, title, or interest in the Surviving Corporation as shall be necessary to carry out the purposes of this Plan and Agreement of Merger, and the Surviving Corporation and the proper officers and directors thereof are fully authorized to take and all such action in the name of the Merging Corporation or otherwise. At and after the Effective Date, the Surviving Corporation shall succeed to and possess, without further act or deed, all of the estate, rights, privileges, powers and franchises, both public and private and all of the property, real, personal and mixed of the each of the parties hereto; all debts due the Merging Corporation or whatever account shall be vested in the Surviving Corporation; all claims, demands, property, rights, privileges, powers and franchises and every other interest of either of the parties hereto shall be as effectively the property of the Surviving Corporation as they were of the respective parties hereto; the title to any real estate vested by deed or otherwise in the Merging Corporation shall not revert or be in any way impaired by reason of the merger, but shall be vested in the Surviving Corporation; all rights of creditors and all liens upon any property of either of the parties hereto shall be preserved unimpaired, limited in lien to the property affected by such lien as of the Effective Date; all debts, liabilities and duties of the respective parties hereto shall thenceforth attach to the Surviving Corporation and may be enforced against it to the same extent as if such debts, liabilities, and duties had been incurred or contracted by it, and the Surviving Corporation shall indemnify and hold harmless the officers and directors of each of the parties hereto against all such debts, liabilities and duties and against all claims and demands arising out of the merger.
IN WITNESS WHEREOF, each of the parties hereto, pursuant to authority granted by its board of directors, has caused this Plan and Agreement of Merger to be duly executed by an authorized officer.
			ATE II, Inc., a Delaware corporation By: /s/ John C. van Roden, Jr. John C. van Roden, Jr. ATE Investment, Inc., a New Jersey Corporation By: /s/ John C. van Roden, Jr. John C. van Roden, Jr.

CERTIFICATE OF MERGER OF ATE INVESTMENT, INC. a New Jersey Corporation, INTO ATE II, INC. a Delaware Corporation
===================================================================================== ATE II, INC. , a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY: FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows:
NAME		STATE OF INCORPORATION
ATE Investment, Inc.		New Jersey
ATE II, Inc.		Delaware
SECOND: That a Plan and Agreement of Merger among the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations and their respective stockholders in accordance with the requirements of subsection (c) of Section 251 of the General Corporation Law of the State of Delaware (the "GCL") and the applicable provisions of the New Jersey Business Corporation Act. THIRD: That the surviving corporation shall be ATE II, Inc., a Delaware corporation (the "Surviving Corporation"), and the name of the corporation shall be changed to ATE Investment, Inc." so that the name of the Surviving Corporation shall be "ATE Investment, Inc." and said certificate of incorporation of the Corporation as immediately in effect prior to the effective time of the merger, as so amended, and the bylaws of the Corporation as in effect immediately prior to the effective time of the merger shall be the Certificate of Incorporation and bylaws, respectively, of the Surviving Corporation. FIFTH: That the executed agreement of merger is on file at an office of the Surviving Corporation. The address of the office of the Surviving Corporation at which a copy of the executed agreement of merger is on file is 800 King Street, Wilmington, Delaware, 19899. SIXTH: That a copy of the agreement of merger will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of any constituent corporation. SEVENTH: The authorized capital stock of ATE Investment, Inc, the New Jersey corporation is 2,500 shares of common stock, no par value. EIGHTH: That the effective date and time of the merger shall be 11:59p.m. on March 14 ^th , 2002. IN WITNESS WHEREOF, ATE II, Inc. has caused this certificate to be signed by its authorized officer this 12 ^th day of March, 2002.
	ATE II, INC. By: /s/ John C. van Roden, Jr. Name: John C. van Roden, Jr. Title: Senior Vice President

RESTATED CERTIFICATE OF INCORPORATION OF ATLANTIC CITY ELECTRIC COMPANY
A. The present name of the corporation is Atlantic City Electric Company (the "Corporation"). The Corporation was originally formed in New Jersey under an Agreement of Merger between Atlantic City Electric Company, Cape May County Electric Company, Cape May Light & Power Company, Hammonton Electric Light Company and West Jersey Electric Company dated March 5, 1924, filed in the Office of the Secretary of State of New Jersey (the "Secretary of State") on April 28, 1924, as amended and supplemented by all certificates filed with the Secretary of State in accordance with law including the Agreement of Merger, dated as of May 24, 1949 between Atlantic City Electric Company and South Jersey Power & Light Company. B. This Restated Certificate of Incorporation of the Corporation, which both restates and further amends the provisions of the Corporation's Certificate of Incorporation, as amended, was duly adopted in accordance with the provisions of Sections 14A:9-1 and 14A:9-5 of the Business Corporation Act of the State of New Jersey (the "Act") and by the written consent of its sole stockholder in accordance with Section 14A:5-6 of the Act. C. The Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows: A RTICLE I : The name of this Corporation is "Atlantic City Electric Company". A RTICLE II : The Corporation may engage in any activity within the purposes for which corporations may be organized under the Act. ARTICLE III: The number, names and addresses of the directors constituting the current Board of Directors is as follows:
					Name			Address
					John M. Derrick, Jr.			701 Ninth Street, NW Washington, D.C. 20068
					Dennis R. Wraase			701 Ninth Street, NW Washington, D.C. 20068
					William T. Torgerson			701 Ninth Street, NW Washington, D.C. 20068
					Name Andrew W. Williams			Address 701 Ninth Street, NW Washington, D.C. 20068
					Thomas S. Shaw			800 King Street P.O. Box 231 Wilmington, DE 19899-0231
					Joseph M. Rigby			800 King Street P.O. Box 231 Wilmington, DE 19899-0231
A RTICLE IV : The capital stock of the Corporation shall be thirty million seven hundred ninety-nine thousand nine hundred seventy-nine (30,799,979) shares, divided into (a) twenty-five million (25,000,000) shares, par value of $3 per share, of Common Stock, (b) seven hundred ninety-nine thousand nine hundred seventy-nine (799,979) shares, par value of $100 per share, of Cumulative Preferred Stock, (c) two million (2,000,000) shares of No Par Preferred Stock, without par value, and (d) three million (3,000,000) shares of Preference Stock, without par value. The Cumulative Preferred Stock, the No Par Preferred Stock and the Preference Stock may be issued in series as hereinafter provided. The voting powers, designations, preferences, relative, participating, optional or other special rights, qualifications, limitations or restrictions of the above classes of stock and the power of the Board of Directors to cause the Cumulative Preferred Stock, the No Par Preferred Stock and the Preference Stock to be issued in series are as follows:
CUMULATIVE PREFERRED STOCK
	(1) Subject to and in accordance with the provisions of this paragraph and the following paragraphs (2) to (10) hereof, the Board of Directors is herby empowered to cause the Cumulative Preferred Stock to be issued in different series. The shares of different series may vary, as may be determined by the Board of Directors prior to the issue thereof (except in the cases of the existing series of 4% Cumulative Preferred Stock and 4.35% Cumulative Preferred Stock, hereby created), as to: (a) The distinctive serial designation and number of shares of such series; (b) The rate of dividends (within such limits as shall be permitted by law) payable on the shares of the particular series; (c) The prices (not less than the amount limited by law) and terms upon which the shares of the particular series may be redeemed; (d) The amount or amounts which shall be paid to the holders of the shares of the particular series in case of voluntary or involuntary dissolution or any distribution of assets; (e) The terms and amount of sinking fund requirements (if any) for the purchase or redemption of the shares of the particular series. (f) The terms upon which the holders thereof may convert the same into Common Stock. The shares of all series of the Cumulative Preferred Stock shall in all other respects be equal.
	(2) The holders of each series of the Cumulative Preferred Stock at the time outstanding shall be entitled to receive, but only when and as declared by the Board of Directors, out of funds legally available for the payment of dividends, cumulative preferential dividends, at the annual dividend rate for the particular series fixed as herein provided, payable quarter-yearly on dates to be fixed by the Board of Directors, to stockholders of record on the respective dates, not exceeding thirty (30) days and not less than ten (10) days preceding such dividend payment dates, to be fixed by the Board of Directors. No dividends shall be declared on any series of the Cumulative Preferred Stock in respect of any quarter-yearly dividend period unless there shall likewise be declared on all shares of all series of the Cumulative Preferred Stock at the time outstanding, like proportionate dividends, ratably, in proportion to the respective annual dividend rates fixed therefore, in respect of the same quarter-yearly dividend period, to the extent that such shares are entitled to receive dividends for such quarter-yearly dividend period. The dividends on shares of all series of the Cumulative Preferred Stock shall be cumulative. In the case of all shares of each particular series, the dividends on shares of such series shall be cumulative from the date of issue thereof unless the Company shall have established regular quarter-yearly dividend periods with respect to such series, in which case such dividend shall be cumulative from the first day of the current quarter-yearly dividend period in which shares of such series shall have been issued, so that unless dividends on all outstanding shares of each series of the Cumulative Preferred Stock, at the annual dividend rate and from the dates for accumulation thereof fixed as herein provided, shall have been paid for all past quarter-yearly dividend periods, but without interest on cumulative dividends, no dividends shall be paid or declared and no other distribution shall be made on the Common Stock, and no Common Stock shall be purchased or otherwise acquired for value by the Corporation. The holders of the Cumulative Preferred Stock of any series shall not be entitled to receive any dividends thereon other than the dividends referred to in this paragraph (2). (3) The Corporation, by action of its Board of Directors may redeem the whole or any part of any series of the Cumulative Preferred Stock, at any time or from time to time, by paying in cash the redemption price of the shares of the particular series, fixed therefore as herein provided, together with a sum in the case of each share of each series so to be redeemed, computed at the annual dividend rate for the series of which the particular share is a part, from the date from which dividends on such share became cumulative to the date fixed for such redemption, less the aggregate of the dividends theretofore or on such redemption date paid thereon. Notice of every such redemption shall be given by publication at least once in one daily newspaper printed in the English language and of general circulation in Atlantic City, New Jersey, and in one daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, The City of New York, the first publication in such newspapers to be at least thirty (30) days and not more than sixty (60) days prior to the date fixed for such redemption. At least thirty (30) days' and not more than sixty (60) days' previous notice of every such redemption shall also be mailed to the holders of record of the shares of the Cumulative Preferred Stock so to be redeemed, at their respective addresses as the same shall appear on the books of the Corporation; but no failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of the Cumulative Preferred Stock so to be redeemed. In cases of the redemption of a part only of any series of the Cumulative Preferred Stock at the time outstanding, the Corporation shall select by lot the shares so to be redeemed. The Board of Directors shall have full power and authority, subject to the limitations and provisions herein contained, to prescribe the manner in which, and the terms and conditions upon which, the shares of the Cumulative Preferred Stock shall be redeemed from time to time. If such notice of redemption shall have been duly given by publication, and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in Trust for the account of the holders of the shares to be redeemed, so as to be and continue to be available therefor, then, notwithstanding that any certificate for such shares so called for redemption shall not have been surrendered for cancellation, from and after the date fixed for redemption, the shares represented thereby shall no longer be deemed outstanding, the right to receive dividends thereon shall cease to accrue and all rights with respect to such shares so called for redemption shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive, out of the funds so set aside in trust, the amount payable upon redemption thereof, without interest; provided, however, that the Corporation may, after giving notice by publication of any such redemption as hereinbefore provided or after giving to the bank or trust company hereinafter referred to irrevocable authorization to give such notice by publication, and at any time prior to the redemption date specified in such notice, deposit in trust, for the account of the holders of the shares to be redeemed, so as to be and continue to be available therefore, funds necessary for such redemption with a bank or trust company in good standing, organized under the laws of the United States of America or of the State of New York, doing business in the Borough of Manhattan, The City of New York, and having capital, surplus and undivided profits aggregating at least $5,000,000 or a bank or trust company in good standing organized under the laws of the State of New Jersey, doing business in Atlantic City, New Jersey, selected by the Board of Directors of the Corporation and designated in such notice of redemption, and, upon such deposit in trust, all shares with respect to which such deposit shall have been made shall no longer be deemed to be outstanding, and all rights with respect to such shares shall forthwith cease and terminate, except only the right of the holders thereof to receive at any time from and after the date of such deposit, the amount payable upon the redemption thereof, without interest. Nothing herein contained shall limit any right of the Corporation to purchase or otherwise acquire any shares of the Cumulative Preferred Stock. The redemption of Cumulative Preferred Stock of any series convertible into Common Stock may be accomplished by notice by mail rather than by publication, and the holders of the convertible stock shall, after the mailing of a notice of redemption, continue to be able to convert up until the date fixed for redemption. (4) Before any amount shall be paid to, or any assets distributed among, the holders of the Common Stock upon any liquidation, dissolution or winding up of the Corporation, and after paying or providing for the payment of all creditors of the Corporation, the holders of each series of the Cumulative Preferred Stock at the time outstanding shall be entitled to be paid in cash the amount for the particular series fixed therefor as herein provided, together with a sum in the case of each share of each series, computed at the annual dividend rate for the series of which the particular share is a part, from the date from which dividends on such share became cumulative to the date fixed for the payment of such distributive amount, less the aggregate of the dividends theretofore or on such date paid thereon; but no payments on account of such distributive amounts shall be made to the holders of any series of the Cumulative Preferred Stock unless there shall likewise be paid at the same time to the holders of each other series of the Cumulative Preferred Stock at the time outstanding like proportionate distributive amounts, ratably, in proportion to the full distributive amounts to which they are respectively entitled as herein provided. The holders of the Cumulative Preferred Stock of any series shall not be entitled to receive any amounts with respect thereto upon any liquidation, dissolution or winding up of the Corporation other than the amounts referred to in this paragraph. Neither the consolidation or merger of the Corporation with any other corporation or corporations, nor the sale or transfer by the Corporation of all or any part of its assets, shall be deemed to be a liquidation, dissolution or winding up of the Corporation. (5) Whenever the full dividends on all series of the Cumulative Preferred Stock at the time outstanding for all past quarter-yearly dividend periods shall have been paid or declared and set apart for payment, then such dividends (payable in cash, stock or otherwise), as may be determined by the Board of Directors may be declared and paid on the Common Stock, but only out of funds legally available for the payment of dividends; provided, however, that so long as any shares of the Cumulative Preferred Stock of any series are outstanding, the Company shall not pay any dividends on or make any other distribution to the holders of its Common Stock if, after giving effect to such payment or distribution, the capital of the Corporation represented by its Common Stock together with its surplus as then stated on its books of account shall, in the aggregate, be less than the involuntary liquidating value of the then outstanding shares of Cumulative Preferred Stock. (6) In the event of any liquidation, dissolution or winding up of the Corporation, all assets and funds of the Corporation remaining after paying or providing for the payment of all creditors of the Corporation and after paying or providing for the payment to the holders of shares of all series of the Cumulative Preferred Stock of the full distributive amounts to which they are respectively entitled as herein provided, shall be divided among and paid to the holders of the Common Stock according to their respective rights and interests. (7) (A) So long as any shares of the Cumulative Preferred Stock of any series are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of at least two-thirds of the total number of shares of the Cumulative Preferred Stock then outstanding:
		(a) Create or authorize any stock ranking prior to or (other than a series of the Cumulative Preferred Stock) ranking on a parity with the Cumulative Preferred Stock as to dividends or distributions, or create or authorize any obligation or security convertible into shares of any such stock; or (b) Amend, alter, change or repeal any of the express terms of the Cumulative Preferred Stock or of any series of the Cumulative Preferred Stock then outstanding in a manner substantially prejudicial to the holders thereof; provided, however, that if any such amendment, alteration, change or repeal would be substantially prejudicial to the holders of one or more, but not all, of the series of the Cumulative Preferred Stock at the time outstanding, such consent of the holders of two-thirds of the total number of shares of all series prejudicially affected shall be required.
	(B) So long as any shares of the Cumulative Preferred Stock of any series are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of a majority of the total number of shares of the Cumulative Preferred Stock then outstanding:
		(a) Increase the total authorized amount of the Cumulative Preferred Stock; or (b) Merge or consolidate with or into any other corporation or corporations, unless such merger or consolidation, or the issuance and assumption of all securities to be issued or assumed in connection with any such merger or consolidation, shall have been ordered, approved, or permitted by the Securities and Exchange Commission under the provisions of the Public Utility Holding Company Act of 1935 or by any successor commission or regulatory authority of the United States of America having jurisdiction in the premises; provided that the provisions of this clause (b) shall not apply to a purchase or other acquisition by the Corporation of franchises or assets of another corporation in any manner which does not involve a merger or consolidation; or (c) Issue, sell or otherwise dispose of any shares of the Cumulative Preferred Stock or of any other class of stock ranking prior to or on a parity with the Cumulative Preferred Stock as to dividends or distributions, unless the net income of the Corporation, determined in accordance with generally accepted accounting practices to be available for the payment of dividends for a period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the issuance, sale or disposition of such stock, is at least equal to twice the annual dividend requirements on all outstanding shares of the Cumulative Preferred Stock and of all other classes of stock ranking prior to or on a parity with the Cumulative Preferred Stock as to dividends or distributions, including the shares proposed to be issued, and unless the gross income of the Corporation for said period, determined in accordance with generally accepted accounting practices (but in any event after deducting the amount for said period charged by the Corporation on its books to depreciation expense) to be available for the payment of interest, shall have been at least one and one-half times the sum of (i) the annual interest charges on all interest bearing indebtedness of the Corporation and (ii) the annual dividend requirements on all outstanding shares of the Cumulative Preferred Stock and of all other classes of stock ranking prior to or on a parity with the Cumulative Preferred Stock as to dividends or distributions, including the shares proposed to be issued.
	(8) (A) Every holder of the Common Stock shall have one vote for each share of Common Stock held by such holder. No holder of the Cumulative Preferred Stock, No Par Preferred Stock or Preference Stock shall be entitled to vote at any meeting of stockholders or at any election of the Corporation or otherwise to participate in any action taken by the Corporation or the stockholders thereof, except for those purposes, if any, for which said right to vote or otherwise to participate cannot be denied or waived under the laws of the State of New Jersey and except as otherwise provided in paragraphs (7), (8) and (10) (c) hereof. (B) If and when dividends payable on the Cumulative Preferred Stock shall be in default in an amount equivalent to four (4) full quarter-yearly dividends on all shares of all series of the Cumulative Preferred Stock at the time outstanding, and until all dividends in default on the Cumulative Preferred Stock shall have been paid, the holders of all shares of the Cumulative Preferred Stock, voting separately as one class, shall be entitled to elect the smallest number of Directors necessary to constitute a majority of the full Board of Directors, and the holders of the Common Stock, voting separately as a class, shall be entitled to elect the remaining Directors of the Corporation. The terms of office of all persons who may be Directors of the Corporation at the time shall terminate upon the election of a majority of the Board of Directors by the holders of the Cumulative Preferred Stock, whether or not the holders of the Common Stock shall then have elected the remaining Directors of the Corporation. (C) If and when all dividends then in default on the Cumulative Preferred Stock at the time outstanding shall be paid (and such dividends shall be declared and paid out of any funds legally available therefore as soon as reasonably practicable), the Cumulative Preferred Stock shall thereupon be divested of any special right with respect to the election of Directors provided in sub-paragraph (B) hereof, and the voting power of the Common Stock shall revert to the status existing before the occurrence of such default; but always subject to the same provisions for vesting such special rights in the Cumulative Preferred Stock in case of further like default or defaults in dividends thereon. Upon the termination of any such special right the terms of office of all persons who may have been elected Directors of the Corporation by vote of the holders of the Cumulative Preferred Stock, as a class, pursuant to such special right shall forthwith terminate. (D) In case of any vacancy in the Board of Directors occurring among the Directors elected by the holders of the Cumulative Preferred Stock, as a class, pursuant to subparagraph (B) hereof, the holders of the Cumulative Preferred Stock then outstanding and entitled to vote may elect a successor to hold office for the unexpired term of the Director whose place shall be vacant. In case of a vacancy in the Board of Directors occurring among the Directors elected by the holders of the Common Stock, as a class, pursuant to subparagraph (B) hereof, the holders of the Common Stock then outstanding and entitled to vote may elect a successor to hold office for the unexpired term of the Director whose place shall be vacant. In all other cases, any vacancy occurring among the Directors shall be filled by the vote of a majority of the remaining Directors. (E) Whenever the holders of the Cumulative Preferred Stock, as a class, become entitled to elect Directors of the Corporation pursuant to either subparagraphs (B) or (D) hereof, or whenever the holders of the Common Stock, as a class, become entitled to elect Directors of the Corporation pursuant to either subparagraphs (B) or (D) hereof, a meeting of the holders of the Cumulative Preferred Stock or of the Common Stock, as the case may be, shall be held at any time thereafter upon call by the holders of not less than 1,000 shares of the Cumulative Preferred Stock or of the Common Stock, as the case may be, or upon call by the Secretary of the Corporation at the request in writing of any stockholder addressed to him at the principal office of the Corporation. At all meetings of stockholders held for the purpose of electing directors during such times as the holders of shares of the Cumulative Preferred Stock shall have the special right, voting separately as one class, to elect directors pursuant to either subparagraphs (B) or (D) hereof, the presence in person or by proxy of the holders of a majority of the outstanding shares of the Common Stock shall be required to constitute a quorum of such class for the election of directors, and the presence in person or by proxy of the holders of a majority of the outstanding shares of the Cumulative Preferred Stock shall be required to constitute a quorum of such class for the election of directors; provided, however, that the absence of a quorum of the holders of stock of either such class shall not prevent the election at any such meeting of adjournment thereof of directors by the other such class if the necessary quorum of the holders of stock of such other class is present in person or by proxy at such meeting; and provided further that in the absence of a quorum of the holders of stock of either such class, a majority of those holders of the stock of such class who are present in person or by proxy shall have power to adjourn the election of the directors to be elected by such class from time to time without notice other than announcement at the meeting until the holders of the requisite number of shares of such class shall be present in person or by proxy. (F) Except when some mandatory provision of law shall be Controlling and except as otherwise provided in clause (b) of paragraph (7)(A) hereof, whenever shares of two or more series of the Cumulative Preferred Stock are outstanding, no particular series of the Cumulative Preferred Stock shall be entitled to vote as a separate series on any matter and all shares of the Cumulative Preferred Stock of all series shall be deemed to constitute but one class for any purpose for which a vote of the stockholders of the Corporation by classes may now or hereafter be required. (9) The existing series of such Cumulative Preferred Stock, designated as "4% Cumulative Preferred Stock," consists and shall consist of 55,000 shares of the par value of $100 per share. (10) The preferences, rights, qualifications, limitations and restrictions of the shares of the 4% Cumulative Preferred Stock, in the respects in which the shares of such series vary from shares of other series of the Cumulative Preferred Stock, are and shall be as follows:
		(a) The annual dividend rate for such series shall be 4% per annum; (b) The redemption price for such series shall be $107.50 per share until May 1, 1949, and on and after May 1, 1949, $105.50 per share; (c) The preferential amounts to which the holders of shares of such series shall be entitled upon any liquidation, dissolution or winding up of the Corporation shall be:
				$104.50 per share, upon any voluntary liquidation, dissolution or winding up of the Corporation, except that if such voluntary liquidation, dissolution or winding up of the Corporation shall have been approved by the vote in favor thereof of the holders of a majority of the total number of shares of the 4% Cumulative Preferred Stock then outstanding, given at a meeting called for that purpose, the amount so payable on such voluntary liquidation, dissolution, or winding up shall be $100 per share; or $100 per share, in the event of any involuntary liquidation, dissolution or winding up of the Corporation; and
		(d) There shall not be any sinking fund provided for the purchase or redemption of shares of the 4% Cumulative Preferred Stock.
	(11) The existing series of such Cumulative Preferred Stock, designated as "4.35% Cumulative Preferred Stock," consists and shall consist of 15,000 shares of the par value of $100 per share. (12) The preferences, rights, qualifications, limitations and restrictions of the shares of the 4.35% Cumulative Preferred Stock, in the respects in which the shares of such series vary from shares of other series of the Cumulative Preferred Stock, are and shall be as follows:
		(a) The annual dividend rate for such series shall be 4.35% per annum; (b) The redemption price for such series shall be $104 per share until June 1, 1954, and on and after June 1, 1954, $102 per share until June 1, 1959, and on and after June 1, 1959, $101 per share; (c) The preferential amounts to which holders of shares of such series shall be entitled upon any liquidation, dissolution or winding up of the Corporation shall be:
				Upon any voluntary liquidation, dissolution or winding up of the Corporation, the redemption price in effect at the time thereof, except that if such voluntary liquidation, dissolution or winding up of the Corporation shall have been approved by the vote in favor thereof of the holders of a majority of the total number of shares of the 4.35% Cumulative Preferred Stock then outstanding, given at a meeting called for that purpose, the amount so payable on such voluntary liquidation, dissolution or winding up shall be $100 per share; or
						$100 per share, in the event of any involuntary liquidation, dissolution or winding up of the Corporation; and
		(d) There shall not be any sinking fund provided for the purchase or redemption of shares of the 4.35% Cumulative Preferred Stock.
	(13) The Corporation hereby classifies $5,000,000 par value of the Cumulative Preferred Stock as a series of such Cumulative Preferred Stock which shall be designated as '5% Cumulative Preferred Stock', consisting of 50,000 shares, of the par value of $100 per share, (14) The preferences, rights, qualifications, limitations and restrictions of the shares of the 5% Cumulative Preferred Stock, in the respects in which the shares of such series vary from shares of other series of the Cumulative Preferred Stock, are and shall be as follows:
		(a) The annual dividend rate for such series shall be 5% per annum; (b) The redemption price for such series shall be $106 per share until August 1, 1965, and on and after August 1, 1965, $104 per share until August 1, 1970, and on and after August 1, 1970, $102 per share until August 1, 1975, and on and after August 1, 1975, $100 per share; provided, however, that prior to August 1, 1970, none of the shares of such series shall be redeemed, directly or indirectly, out of the proceeds of the sale, or in anticipation of the sale, of any debt securities or borrowed funds, nor shall any of the shares of such series be redeemed prior to August 1, 1970, directly or indirectly, out of the proceeds of the sale, or in anticipation of the sale, of any class of stock ranking senior to the Common Stock of the Corporation if such stock is entitled to dividends at an annual rate of less than 5%; (c) The preferential amounts to which holders of shares of such series shall be entitled upon any liquidation, dissolution or winding up of the Corporation shall be: upon any voluntary liquidation, dissolution or winding up of the Corporation, the redemption price in effect at the time thereof; or
				$100 per share, in the event of any involuntary liquidation, dissolution or winding up of the Corporation; and
		(d) There shall not be any sinking fund provided for the purchase or redemption of shares of the 5% Cumulative Preferred Stock.
	(15) The Corporation hereby classifies $7,200,000 par value of the Cumulative Preferred Stock as a series of such Cumulative Preferred Stock which shall be designated as '4.10% Cumulative Preferred Stock,' consisting of 72,000 shares, of the par value of $100 per share. (16) The preferences, rights, qualifications, limitations and restrictions of the shares of the 4.10% Cumulative Preferred Stock, in the respects in which the shares of such series vary from shares of other series of the Cumulative Preferred Stock, are and shall be as follows:
		(a) The annual dividend rate for such series shall be 4.10% per annum; (b) The redemption price for such series shall be $104 per share until August 1, 1959, and on and after August 1, 1959, $103 per share until August 1, 1964, and on and after August 1, 1964, $102 per share until August 1, 1969, and on and after August 1, 1969, $101 per share; (c) The preferential amounts to which holders of shares of such series shall be entitled upon any liquidation, dissolution, or winding up of the Corporation shall be: upon any voluntary liquidation, dissolution or winding up of the Corporation, the redemption price in effect at the time thereof; or
			$100 per share, in the event of any involuntary liquidation, dissolution or winding up of the Corporation; and
		(d) There shall not be any sinking fund provided for the purchase or redemption of shares of the 4.10% Cumulative Preferred Stock.
	(17) The Corporation hereby classifies $5,000,000 par value of the Cumulative Preferred Stock as a series of such Cumulative Preferred Stock which shall be designated as '4.75% Cumulative Preferred Stock,' consisting of 50,000 shares, of the par value of $100 per share. (18) The preferences, rights, qualification, limitations and restrictions of the shares of the 4.75% Cumulative Preferred Stock, in the respects in which the shares of such series vary from shares of other series of the Cumulative Preferred Stock, are and shall be as follows:
		(a) The annual dividend rate for such series shall be 4.75% per annum; (b) The redemption price for such series shall be $105.50 per share until April 1, 1963, and on and after April 1, 1963, $104 per share until April 1, 1968, and on and after April 1, 1968, $102.50 per share until April 1, 1973, and on and after April 1, 1973, $101 per share; (c) The preferential amounts to which holders of shares of such series shall be entitled upon any liquidation, dissolution, or winding up of the Corporation shall be: upon any voluntary liquidation, dissolution or winding up of the Corporation, the redemption price in effect at the time thereof; or
				$100 per share, in the event of any involuntary liquidation, dissolution or winding up of the Corporation; and
		(d) There shall not be any sinking fund provided for the purchase or redemption of shares of the 4.75% Cumulative Preferred Stock.
	(19) The Corporation hereby classifies $3,600,000 par value of the Cumulative Preferred Stock as a series of such Cumulative Preferred Stock which shall be designated as '4.35% Cumulative Preferred Stock, 2nd Series' consisting of 36,000 shares, of the par value of $100 per share. (20) The preferences, rights, qualifications, limitations and restrictions of the shares of the 4.35% Cumulative Preferred Stock, 2nd Series, in the respects in which the shares of such series vary from shares of other series of the Cumulative Preferred Stock, are and shall be as follows:
		(a) The annual dividend rate for such series shall be 4.35% per annum; (b) The redemption price for such series shall be $104.50 per share until June 1, 1957, and on and after June 1, 1957, $103 per share until June 1, 1958, and on and after June 1, 1958, $102 per share until June 1, 1959, and on and after June 1, 1959, $101 per share; (c) The preferential amounts to which holders of shares of such series shall be entitled upon any liquidation, dissolution, or winding up of the Corporation shall be: upon any voluntary liquidation, dissolution or winding up of the Corporation, the redemption price in effect at the time thereof, except that if such voluntary liquidation, dissolution or winding up of the Corporation shall have been approved by the vote in favor thereof of the holders of a majority of the total number of shares of the 4.35% Cumulative Preferred Stock, 2nd Series, then outstanding, given at a meeting called for that purpose, the amount so payable on such voluntary liquidation, dissolution or winding up shall be $100 per share; or
				$100 per share, in the event of any involuntary liquidation, dissolution or winding up of the Corporation; and
		(d) There shall not be any sinking fund provided for the purchase or redemption of shares of the 4.35% Cumulative Preferred Stock, 2nd Series.
NO PAR PREFERRED STOCK
	Subject to and in accordance with the provisions hereof and herein referred to, the Board of Directors is hereby empowered to cause the No Par Preferred Stock to be issued in different series. The shares of different series may vary, as may be determined by the Board of Directors prior to the issue thereof, as to:
		(a) The distinctive serial designation and number of shares of such series; (b) The rate of dividends (within such limits as shall be permitted by law) payable on the shares of the particular series; (c) The prices (not less than the amount limited by law) and terms upon which the shares of the particular series may be redeemed; (d) The amount or amounts which shall be paid to the holders of the shares of the particular series in case of voluntary or involuntary dissolution or any distribution of assets; (e) The terms and amount of sinking fund requirements (if any) for the purchase or redemption of the shares of the particular series; (f) The terms upon which the holders thereof may convert the same into Common Stock.
	Except as herein permitted, the shares of all series of the No Par Preferred Stock shall in all respects be equal. Shares of any series of No Par Preferred Stock may be issued for such consideration, having a value not less than the aggregate preferential amount payable upon such shares in the event of involuntary liquidation, dissolution or winding up of the Corporation, as may be fixed by the Board of Directors prior to the time of such issuance and, except as otherwise determined by the Board of Directors in accordance with the provisions of the Act applicable thereto, the entire amount of such consideration shall be stated capital. Paragraphs (2) through (8), inclusive, heretofore set forth in this Article IV following the heading "Cumulative Preferred Stock" shall be applicable in all respects to the No Par Preferred Stock, and any reference therein, or hereafter set forth following the heading "Preference Stock," to the term "Cumulative Preferred Stock" shall in each instance include, within the meaning of that term, the No Par Preferred Stock. In applying said paragraphs (2) through (8), the Cumulative Preferred Stock, with a par value of $100 per share, and the No Par Preferred Stock, shall be entitled to vote as a single class for the purposes provided in paragraphs (7) and (8) thereof. In any such case the holders of shares of Cumulative Preferred Stock, with a par value of $100 per share, shall be entitled to cast one vote for each such share. In any such case, and in any case not so provided where the holders of the No Par Preferred Stock shall be entitled to vote their shares pursuant to the Act, the holders of shares of the No Par Preferred Stock shall be entitled to cast for each such share one or more vote(s) or fraction of one vote as shall bear the same relationship to one vote as the preferential amount to which the holder of such share shall be entitled, exclusive of accrued dividends, in the event of involuntary liquidation, dissolution or winding up of the Corporation, bears to $100. In any such vote the references in said paragraph (7) to "two-thirds" or to a "majority" of a total number of shares outstanding or prejudicially affected, shall be deemed to refer to two-thirds or a majority, as the case may be, of the votes entitled to be cast by holders of the total number of shares outstanding or prejudicially affected.
7.8% NO PAR PREFERRED STOCK
	The Corporation hereby classifies 700,000 shares of the No Par Preferred Stock as a series of such No Par Preferred Stock, which shall be designated as '$7.80 No Par Preferred Stock. Pursuant to authority contained in Article IV of the Agreement of Merger forming this Corporation, as amended, the preferences, rights, qualifications, limitations and restrictions of the shares of the $7.80 No Par Preferred Stock (herein called the 'New Series'), in the respects in which the shares of such series vary from shares of other series of the No Par Preferred Stock, are and shall be as follows:
		(a) Dividends. The annual cumulative dividend rate for the New Series shall be $7.80 per share per annum. (b) Sinking Fund. A sinking fund shall be established for the benefit of the shares of the New Series. So long as there shall remain outstanding any shares of the New Series, the Corporation, after full cumulative dividends upon the outstanding No Par Preferred Stock and Cumulative Preferred Stock of all series for all past quarter-yearly dividend periods have been paid or set aside, shall redeem as and for a sinking fund for the retirement of the New Series, out of funds legally available therefor, 115,000 shares of the New Series on May 1 in each of the years 2001 through 2005 and 125,000 shares of the New Series on May 1, 2006. The Corporation's obligation to make redemption for the sinking fund on any such May 1 shall be cumulative so that if on any such May 1 the sinking fund obligation is not discharged in full, then such sinking fund obligation, to the extent not discharged, shall become an additional sinking fund obligation for each succeeding May 1 until discharged in full. At its option, the Corporation may redeem through the sinking fund on May 1 in each such year not more than 115,000 additional shares of the New Series. The price at which shares of the New Series shall be called for redemption through the sinking fund shall be $100 per share. The Corporation's obligation to make redemption for the sinking fund may be discharged, in whole or in part, by the application for any shares of the New Series purchased or otherwise acquired by the Corporation on or before such date. (c) Optional Redemption. Shares of the New Series shall be redeemable in whole or in part at the option of the Corporation at any time on or after May 1, 2006 at a price of $100 per share. (d) Liquidation Rights. The preferential amount to which holders of shares of the New Series shall be entitled upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation shall be $100 per share. (e) No Conversion Privilege. The shares of the New Series shall not have any rights to convert the same into and/or purchase stock of any other series or class of any other securities, or any special rights other than those specified herein. (f) Stated Capital. The stated capital of each share of the New Series shall be $100.
PREFERENCE STOCK
	(1) Subject to and in accordance with the provisions of this paragraph and the following paragraphs (2) to (8) hereof, the Board of Directors is hereby empowered to cause the Preference Stock to be issued in different series. The shares of different series may vary, as may be determined by the Board of Directors prior to the issue thereof as to:
		(a) The distinctive serial designation and number of shares of such series; (b) The rate of dividends (within such limits as shall be permitted by law) payable on the shares of the particular series; (c) The prices (not less than the amount limited by law) and terms upon which the shares of the particular series may be redeemed; (d) The amount or amounts which shall be paid to the holders of the shares of the particular series in case of voluntary or involuntary dissolution or any distribution of assets; (e) The terms and amount of sinking fund requirements (if any) for the purchase or redemption of the shares of the particular series; (f) The terms upon which the holders thereof may convert the same into Common Stock. The shares of all series of the Preference Stock shall in all other respects be equal.
	(2) Subject to the prior payment, or the declaration and setting apart for payment, of all past quarter-yearly dividends on each series of Cumulative Preferred Stock at the time outstanding at the annual dividend rates thereon and from the dates for accumulation thereof, the holders of each series of the Preference Stock at the time outstanding shall be entitled to received, but only when and as declared by the Board of Directors, out of funds legally available for the payment of dividends, cumulative preferential dividends, at the annual dividend rate for the particular series fixed as herein provided, payable quarter-yearly on dates to be fixed by the Board of Directors, to stockholders of record on the respective dates, not exceeding thirty (30) days and not less than ten (10) days preceding such dividend payment dates, to be fixed by the Board of Directors. No dividends shall be declared on any series of the Preference Stock in respect of any quarter-yearly dividend period unless there shall likewise be declared on all shares of all series of the Preference Stock at the time outstanding, like proportionate dividends, ratably, in proportion to the respective annual dividend rates fixed therefore, in respect of the same quarter-yearly dividend period, to the extent that such shares are entitled to receive dividends for such quarter-yearly dividend period. The dividends on shares of all series of the Preference Stock shall be cumulative. In the case of all shares of each particular series, the dividends on shares of such series shall be cumulative from the date of issue thereof unless the Company shall have established regular quarter-yearly dividend periods with respect to such series, in which case such dividends shall be cumulative from the first day of the current quarter-yearly dividend period in which shares of such series shall have been issued, so that unless dividends on all outstanding shares of each series of the Preference Stock, at the annual dividend rate and from the dates for accumulation thereof fixed as herein provided, shall have been paid, or declared and set apart for payment, for all past quarter-yearly dividend periods, but without interest on cumulative dividends, no dividends shall be paid or declared and no other distribution shall be made on the Common Stock, and no Common Stock shall be purchased or otherwise acquired for value by the Corporation. The holders of the Preference Stock of any series shall not be entitled to receive any dividends thereon other than the dividends referred to in this paragraph (2). (3) The Corporation by action of its Board of Directors, may redeem the whole or any part of any series of the Preference Stock, at any time or from time to time, by paying in cash the redemption price of the shares of the particular series, fixed therefore as herein provided, together with a sum in the case of each share of each series so to be redeemed computed at the annual dividend rate for the series of which the particular share is a part, from the date from which dividends on such share became cumulative to the date fixed for such redemption, less the aggregate of the dividends theretofore or on such redemption date paid thereon. Notice of every such redemption shall be given by publication at least once in one daily newspaper printed in the English language and of general circulation in Atlantic City, New Jersey, and in one daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, The City of New York, the first publication in such newspapers to be at least thirty (30) days prior to the date fixed for such redemption. At least thirty (30) days' previous notice of every such redemption shall also be mailed to the holders of record of the shares of the Preference Stock so to be redeemed, at their respective addresses as the same shall appear on the books of the Corporation; but no failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of the Preference Stock so to be redeemed. The Board of Directors shall have full power and authority, subject to the limitations and provisions herein contained, to prescribe the manner in which, and the terms and conditions upon which, the shares of the Preference Stock shall be redeemed from time to time. If such notice of redemption shall have been duly given by publication, and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the account of the holders of the shares to be redeemed, so as to be and continue to be available therefore, then, notwithstanding that any certificate for such shares so called for redemption shall not have been surrendered for cancellation, from and after the date fixed for redemption, the shares represented thereby shall no longer be deemed outstanding, the right to receive dividends thereon shall cease to accrue and all rights with respect to such shares so called for redemption shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive, out of the funds so set aside in trust, the amount payable upon redemption thereof, without interest; provided, however, that the Corporation may, after giving notice by publication of any such redemption as hereinbefore provided or after giving to the bank or trust company hereinafter referred to irrevocable authorization to give such notice by publication, and at any time prior to the redemption date specified in such notice, deposit in trust, for the account of the holders of the shares to be redeemed, so as to be and continue to be available therefore, funds necessary for such redemption with a bank or trust company in good standing, organized under the laws of the United States of America or of the State of New York, doing business in the Borough of Manhattan, The City of New York, and having capital, surplus and undivided profits aggregating at least $5,000,000, or a bank or trust company in good standing organized under the laws of the State of New Jersey, doing business in Atlantic City, New Jersey, selected by the Board of Directors of the Corporation and designated in such notice of redemption, and, upon such deposit in trust, all shares with respect to which such deposit shall have been made shall no longer be deemed to be outstanding, and all rights with respect to such shares shall forthwith cease and terminate, except only the right of the holders thereof to receive at any time from and after the date of such deposit, the amount payable upon the redemption thereof, without interest. Nothing herein contained shall limit any right of the Corporation to purchase or otherwise acquire any shares of the Preference Stock; provided, however, that the Corporation may not purchase, redeem or otherwise acquire for value any shares of Preference Stock, if, at the time of such redemption, purchase or other acquisition for value, all past quarter-yearly dividends on each series of Cumulative Preferred Stock and each series of Preference Stock at the time outstanding have not been paid, or declared and set apart for payment, in full at the annual dividend rates thereon and from the dates for accumulation thereof. The redemption of Preference Stock of any series convertible into Common Stock may be accomplished by notice by mail rather than by publication, and the holders of the convertible stock shall, after the mailing of a notice of redemption, continue to be able to convert up until the date fixed for redemption. (4) Before any amount shall be paid to, or any assets distributed among, the holders of the Common Stock upon any liquidation, dissolution or winding up of the Corporation, and after paying or providing for the payment of all creditors of the Corporation and of all amounts payable to the holders of each series of Cumulative Preferred Stock upon such liquidation, dissolution or winding up of the Corporation, the holders of each series of the Preference Stock at the time outstanding shall be entitled to be paid in cash the amount for the particular series fixed therefore as herein provided, together with a sum in the case of each share of each series, computed at the annual dividend rate for the series of which the particular share is a part, from the date from which dividends on such share became cumulative to the date fixed for the payment of such distributive amount, less the aggregate of the dividends theretofore or on such date paid thereon; but no payments on account of such distributive amounts shall be made to the holders of any series of the Preference Stock unless there shall likewise be paid at the same time to the holders of each other series of the Preference Stock at the time outstanding like proportionate distributive amounts, ratably, in proportion to the full distributive amounts to which they are respectively entitled as herein provided. The holders of the Preference Stock of any series shall not be entitled to receive any amounts with respect thereto upon any liquidation, dissolution or winding up of the Corporation other than the amounts referred to in this paragraph. Neither the consolidation or merger of the Corporation with any other corporation or corporations, nor the sale or transfer by the Corporation of all or any part of its assets, shall be deemed to be a liquidation, dissolution or winding up of the Corporation. (5) Whenever the full dividends on all series of the Preference Stock at the time outstanding for all past quarter-yearly dividend periods shall have been paid or declared and set apart for payment, then such dividends (payable in cash, stock or otherwise), as may be determined by the Board of Directors may be declared and paid on the Common Stock, but only out of funds legally available for the payment of dividends. (6) Notwithstanding the provisions of paragraph (6) of the provisions relating to the Cumulative Preferred Stock in this Article IV, in the event of any liquidation, dissolution or winding up of the Corporation, all assets and funds of the Corporation remaining after paying or providing for the payment of all creditors of the Corporation and after paying or providing for the payment to the holders of shares of all series of the Cumulative Preferred Stock and Preference Stock of the full distributive amounts to which they are respectively entitled as herein provided, shall be divided among and paid to the holders of the Common Stock according to their respective rights and interests. (7) (A) So long as any shares of the Preference Stock of any series are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of at least two-thirds of the total number of shares of the Preference Stock then outstanding create or authorize any new class of stock (other than the Cumulative Preferred Stock) ranking prior to, or (other than a series of the Preference Stock) ranking on a parity with, the Preference Stock, as to dividends or distributions, or create or authorize any obligation or security convertible into shares of any such stock. (B) So long as any shares of the Preference Stock of any series are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of a majority of the total number of shares of the Preference Stock then outstanding increase the total authorized amount of the Preference Stock or (other than the Cumulative Preferred Stock) of any other class of stock ranking prior to, or ranking on a parity with, the Preference Stock as to dividends or distributions. (8) (A) No holder of the Preference Stock shall be entitled to vote at any meeting of stockholders or at any election of the Corporation or otherwise to participate in any action taken by the Corporation or the stockholders thereof, except for those purposes, if any, for which said right to vote or otherwise to participate cannot be denied or waived under the laws of the State of New Jersey and except as otherwise provided in paragraphs (7) and (8) hereof. (B) If and when dividends payable on the Preference Stock shall be in default in an amount equivalent to six (6) full quarter-yearly dividends on all shares of all series of the Preference Stock at the time outstanding, and until all dividends in default on the Preference Stock shall have been paid, the holders of all shares of the Preference Stock, voting separately as one class, shall be entitled to elect two (2) Directors to the Board of Directors. If (a) by the terms of this subsection (B) the holders of the Preference Stock are entitled to elect two Directors, (b) by the terms of this Agreement, the holders of the shares of Cumulative Preferred Stock shall be entitled to elect a majority of the full Board of Directors, and (c) the full Board of Directors consists of fewer than seven members, the number of members of the Board of Directors shall be increased to seven. If (a) by the terms of this subsection (B) the holders of the Preference Stock are entitled to elect two Directors and (b) the full Board of Directors consists of fewer than three members, the number of members of the Board of Directors shall be increased to three. The holders of the Common Stock, voting separately as a class, shall be entitled to elect the remaining Directors of the Corporation not elected by the holders of the Cumulative Preferred Stock or the holders of the Preference Stock. The terms of office of all persons who may be Directors of the Corporation, elected by the holders of the Common Stock, at the time shall terminate upon the election of two Directors by the holders of the Preference Stock, whether or not the holders of the Common Stock shall then have elected the remaining Directors of the Corporation. (C) If and when all dividends then in default on the Preference Stock at the time outstanding shall be paid (and such dividends shall be declared and paid out of any funds legally available therefore as soon as reasonably practicable), the Preference Stock shall thereupon be divested of any special right with respect to the election of Directors provided in subparagraph (B) hereof, and the voting power of the Common Stock shall revert to the status existing before the occurrence of such default; but always subject to the same provisions for vesting such special rights in the Preference Stock in case of further like default or defaults in dividends thereon. Upon the termination of any such special right the terms of office of all persons who may have elected Directors of the Corporation by vote of the holders of the Preference Stock, as a class, pursuant to such special right shall forthwith terminate. (D) In case of any vacancy in the Board of Directors occurring among the Directors elected by the holders of the Preference Stock, as a class, pursuant to subparagraph (B) hereof, the holders of the Preference Stock then outstanding and entitled to vote may elect a successor to hold office for the unexpired term of the Director whose place shall be vacant. In case of a vacancy in the Board of Directors occurring among the Directors elected by the holders of the Common Stock, as a class, pursuant to subparagraph (B) hereof, the holders of the Common Stock then outstanding and entitled to vote may elect a successor to hold office for the unexpired term of the Director whose place shall be vacant. In all other cases, any vacancy occurring among the Directors shall be filled by the vote of a majority of the remaining Directors. (E) Whenever the holders of the Preference Stock, as a class, become entitled to elect Directors of the Corporation pursuant to either subparagraphs (B) or (D) hereof, or whenever the holders of the Common Stock, as a class, become entitled to elect Directors of the Corporation pursuant to either subparagraphs (B) or (D) hereof, a meeting of the holders of the Preference Stock or of the Common Stock, as the case may be, shall be held at any time thereafter upon call by the holders of not less than 1,000 shares of the Preference Stock or of the Common Stock, as the case may be, or upon call by the Secretary of the Corporation at the request in writing of any stockholder addressed to him at the principal office of the Corporation. At all meetings of stockholders held for the purpose of electing directors during such times as the holder of shares of the Preference Stock shall have the special right, voting separately as one class, to elect directors pursuant to either subparagraph (B) or (D) hereof, the presence in person or by proxy of the holders of a majority of the outstanding shares of the Common Stock shall be required to constitute a quorum of such class for the election of directors, and the presence in person or by proxy of the holders of a majority of the outstanding shares of the Preference Stock shall be required to constitute a quorum of such class for the election of directors; provided, however, that the absence of a quorum of the holders of stock of either such class shall not present the election at any such meeting or adjournment thereof of directors by the other such class if the necessary quorum of the holders of stock of such other class is present in person or by proxy at such meeting; and provided further that in the absence of a quorum of the holders of stock of either such class, a majority of those holders of the stock of such class who are present in person or by proxy shall have power to adjourn the election of the directors to be elected by such class from time to time without notice other than announcement at the meeting until the holders of the requisite number of shares of such class shall be present in person or by proxy. (F) Except when some mandatory provision of law shall be controlling, whenever shares of two or more series of the Preference Stock are outstanding, no particular series of the Preference Stock shall be entitled to vote as a separate series on any matter and all shares of the Preference Stock of all series shall be deemed to constitute but one class for any purpose for which a vote of the stockholders of the Corporation by classes may now or hereafter be required.
COMMON STOCK
	Each share of the Common Stock shall be equal in all respects to every other share of the Common Stock. Upon any issue for money or other consideration of any stock of the Corporation, whether authorized by this agreement or upon subsequent increase of capital, no holder of stock irrespective of the kind of such stock shall have any preemptive or other right to subscribe for, purchase or receive any proportionate or other share of the stock so issued, but the Board of Directors may dispose of all or any portion of such stock as and when it may determine free of any such rights, whether by offering the same to stockholders or by sale or other disposition as said Board may deem advisable.
CONVERTIBLE BONDS, DEBENTURES OR OTHER OBLIGATIONS
	Subject to such limitations as may be elsewhere in this Agreement of Merger imposed, the Corporation may issue bonds, debentures or other obligations convertible into stock of any class, or bearing warrants or other evidences of optional rights to purchase, or subscribe, or both, to stock of any class, upon the terms, in the manner and under the conditions fixed by resolution of the Board of Directors prior to the issue thereof, and the Board of Directors is hereby given the authority so to make all such determinations and issuances.
A RTICLE V : In furtherance and not in limitation of the powers conferred by the laws of the State of New Jersey, the Board of Directors is expressly authorized to make, alter and repeal the by-laws of the Corporation, subject to the power of the stockholders of the Corporation to alter or repeal any by-law whether adopted by them or otherwise. A RTICLE VI : A person who is or was a director or an officer of the Corporation shall not be personally liable to the Corporation or its shareholders for damages for breach of any duty owed to the Corporation or its shareholders, except that this Article VI shall not relieve such person from liability for any breach of duty based upon an act or omission (a) in breach of such person's duty of loyalty to the Corporation or its shareholders, (b) not in good faith or involving a knowing violation of law or (c) resulting in receipt by such person of an improper personal benefit. Any modification, repeal or supersession of this Article VI shall not adversely affect any right or protection of any such person for or with respect to any act or omission occurring prior to the time of such modification, repeal or supersession. A RTICLE VII : Unless and except to the extent that the by-laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. A RTICLE VIII : The Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, and other provisions authorized by the laws of the State of New Jersey at the time in force may be added or inserted, in the manner now or hereafter prescribed by law, subject to the vote of stockholders in certain circumstances as specifically set forth in this Restated Certificate of Incorporation; and all rights, preferences and privileges of any nature conferred upon stockholders, directors or any other persons by and pursuant to this Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this Article. A RTICLE IX : The address of the Corporation's registered office in the State of New Jersey is The Corporation Trust Company, 820 Bear Tavern Road, West Trenton, NJ 08628. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, Atlantic City Electric Company has caused this Restated Certificate of Incorporation to be executed by Joseph M. Rigby, its President and CEO, as of the 8th day of August, 2002.
							Atlantic City Electric Company By:/s/ Joseph M. Rigby Name: Joseph M. Rigby Title: President and CEO

THE CERTIFICATE REQUIRED TO BE FILED WITH THE ARTICLES OF RESTATEMENT OF CERTIFICATE OF INCORPORATION OF ATLANTIC CITY ELECTRIC COMPANY
1.	The name of the corporation is ATLANTIC CITY ELECTRIC COMPANY (the "Corporation").
2.	The Certificate of Incorporation of the Corporation are restated and attached hereto as Exhibit A .
3.	The Restated Certificate of Incorporation of the Corporation, which both restates and further amends the provisions of the Corporation's Certificate of Incorporation, as amended, was duly adopted by the sole shareholder in accordance with the provisions of Section 14A:9-5 of the Business Corporation Act of the State of New Jersey (the "Act") on the 8th day of August, 2002.
4.	The Restated Certificate of Incorporation contains amendments that require shareholder approval and have been approved by the unanimous written consent of the sole shareholder of the Corporation in accordance with Section 14A:5-6(1) of the Act.
5	The certificate of restatement shall become effective at 5 o'clock p.m. on August 8, 2002.
[SIGNATURE PAGE FOLLOWS]
Dated: August 8, 2002		ATLANTIC CITY ELECTRIC COMPANY, a corporation incorporated under the laws of the State of New Jersey By: /s/ Joseph M. Rigby Name: Joseph M. Rigby Title: President and CEO

ATLANTIC CITY ELECTRIC COMPANY
(a New Jersey Corporation)

----
AMENDED AND RESTATED BYLAWS
----

ARTICLE I

OFFICES

Section 1. Offices . The registered office shall be in the State of New Jersey. The Corporation may have offices at such other places both within and without the State of New Jersey as the Board of Directors may from time to time determine or as may be necessary or convenient to the business of the Corporation.

ARTICLE II

MEETINGS OF STOCKHOLDERS

            Section 1. Annual Meeting . The annual meeting of the stockholders of the Corporation shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. In lieu of holding an annual meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote communication.

            Section 2. Special Meetings . Special meetings of the stockholders of the Corporation shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. In lieu of holding a special meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any special meeting of stockholders may be held solely by means of remote communication.

            Section 3. Notice of Meetings and Record Date . (a) The Corporation shall give notice of any annual or special meeting of stockholders. Notices of meetings of the stockholders shall state the place, if any, date, and hour of the meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. In the case of a special meeting, the notice shall state the purpose or purposes for which the meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting. Unless otherwise provided by applicable law or the Certificate of Incorporation, notice shall be given to each stockholder entitled to vote at such meeting not fewer than ten days or more than sixty days before the date of the meeting.

                                                                                                                                                            Adopted August 8, 2000

                   (b)      Notice to stockholders may be given by writing in paper form or solely in the form of electronic transmission as permitted by this subsection (b). If given by writing in paper form, notice may be delivered personally, may be delivered by mail, or, with the consent of the stockholder entitled to receive notice, may be delivered by facsimile telecommunication or any of the other means of electronic transmission specified in this subsection (b). If mailed, such notice shall be delivered by postage prepaid envelope directed to each stockholder at such stockholder's address as it appears in the records of the Corporation. Any notice to stockholders given by the Corporation shall be effective if delivered or given by a form of electronic transmission to which the stockholder to whom the notice is given has consented. Notice given pursuant to this subsection shall be deemed given: (1) if by facsimile telecommunication, when directed to a facsimile telecommunication number at which the stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (3) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by personal delivery, by mail, or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

                   (c)       Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder either in a writing signed by such stockholder or by electronic transmission, whether such waiver is given before or after such meeting is held. If such a waiver is given by electronic transmission, the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder.

                   (d)       In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty or fewer than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

            Section 4. Quorum and Adjournment . Except as otherwise required by law, by the Certificate of Incorporation of the Corporation, or by these Bylaws, the presence, in person or represented by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If such majority shall not be present or represented at any meeting of the stockholders, the stockholders present, although less than a quorum, shall have the power to adjourn the meeting to another time and place.

            Section 5. Adjourned Meetings . When a meeting is adjourned to another time and place, if any, unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the date, time, and place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the stockholders may transact any business that might have been transacted at the original meeting. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided , however , that the Board of Directors may fix a new record date for the adjourned meeting. If an adjournment is for more than 30 days or, if after an adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

            Section 6. Vote Required . Except as otherwise provided by law or by the Certificate of Incorporation:

                   (a)       Directors shall be elected by a plurality in voting power of the shares present in person or represented by proxy at a meeting of the stockholders and entitled to vote in the election of directors; and

                   (b)       Whenever any corporate action other than the election of directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or represented by proxy at a meeting of stockholders and entitled to vote on the subject matter.

            Section 7. Manner of Voting; Proxies . (a) At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Each stockholder shall be entitled to vote each share of stock having voting power and registered in such stockholder's name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting.

                   (b)       Each person entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute valid means by which a stockholder may grant such authority:

       (1)       A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or the stockholder's authorized officer, director, employee, or agent signing such writing or causing such person's signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; and

       (2)       A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person or persons who will be the holder of the proxy or to an agent of the proxyholder(s) duly authorized by such proxyholder(s) to receive such transmission; provided , however , that any such telegram, cablegram, or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram, or other electronic transmission was authorized by the stockholder. If it is determined that any such telegram, cablegram, or other electronic transmission is valid, the inspectors or, if there are no inspectors, such other persons making that determination, shall specify the information upon which they relied.

Any copy, facsimile telecommunication, or other reliable reproduction of a writing or electronic transmission authorizing a person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or electronic transmission for any and all purposes for which the original writing or electronic transmission could be used; provided , however , that such copy, facsimile telecommunication, or other reproduction shall be a complete reproduction of the entire original writing or electronic transmission.

            Section 8. Remote Communication . For the purposes of these Bylaws, if authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders may, by means of remote communication:

             (A)       participate in a meeting of stockholders; and

             (B)       be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation.

            Section 9. Stockholder Action Without a Meeting . (a) Except as otherwise provided by law or by the Certificate of Incorporation, any action required to be taken at any meeting of stockholders of the Corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of [New Jersey], its principal place of business, or an officer or agent of the Corporation having custody of the book or books in which meetings of stockholders are recorded; provided , however , that delivery made to the Corporation's registered office in the State of [New Jersey] shall be by hand or by certified mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of the holders to take the action were delivered to the Corporation.

                   (b)       A telegram, cablegram, or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed, and dated for the purposes of these Bylaws, provided that any such telegram, cablegram, or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (A) that the telegram, cablegram, or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (B) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram, or electronic transmission. Any consent by means of telegram, cablegram, or other electronic transmission shall be deemed to have been signed on the date on which such telegram, cablegram, or electronic transmission was transmitted. No consent given by telegram, cablegram, or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the Corporation by delivery to its registered office in the State of [New Jersey], its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a Corporation's registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram, or other electronic transmission may be otherwise delivered to the principal place of business of the Corporation or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent, and in the manner provided by resolution of the Board of Directors of the Corporation.

                   (c)       Any copy, facsimile, or other reliable reproduction of a consent in writing (or reproduction in paper form of a consent by telegram, cablegram, or electronic transmission) may be substituted or used in lieu of the original writing (or original reproduction in paper form of a consent by telegram, cablegram, or electronic transmission) for any and all purposes for which the original consent could be used, provided that such copy, facsimile, or other reproduction shall be a complete reproduction of the entire original writing (or original reproduction in paper form of a consent by telegram, cablegram, or electronic transmission).

                   (d)       In order to determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directions. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action of the Board of Directors is required by applicable law, the Certificate of Incorporation, or these Bylaws, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner set forth in subsections (a) and (b) of this Section 9. If no record date has been fixed by the Board of Directors and prior action of the Board of Directors is required by applicable law, the Certificate of Incorporation, or these Bylaws, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

ARTICLE III

DIRECTORS

            Section 1. Number . The number of directors that shall constitute the whole Board of Directors initially shall be one (1), and thereafter shall be such number of directors to be determined from time to time by resolution adopted by the Board of Directors.

            Section 2. Powers . The Board of Directors shall exercise all of the powers of the Corporation except such as are by applicable law, by the Certificate of Incorporation of this Corporation, or by these Bylaws conferred upon or reserved to the stockholders of any class or classes or series thereof.

            Section 3. Resignations and Removal . (a) Any director may resign at any time by giving written notice in writing or by electronic transmission to the Board of Directors or the Secretary; provided , however , that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective.

                   (b)       Except as otherwise may be provided in the Certificate of Incorporation, any director or the entire Board of Directors may be removed with or without cause, by the holders of capital stock having a majority in voting power of the shares entitled to vote in the election of directors.

            Section 4. Regular Meetings . Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the State of [Delaware], as shall from time to time be determined by the Board of Directors, such determination to constitute the only notice of such regular meetings to which any director shall be entitled. In the absence of any such determination, such meetings shall be held, upon notice to each director in accordance with Section 7 of this Article III, at such times and places, within or without the State of [Delaware], as shall be designated by the Chairman of the Board.

            Section 5. Special Meetings . Special meetings of the Board of Directors shall be held at the call of the Chairman of the Board at such times and places, within or without the State of [Delaware], as he or she shall designate, upon notice to each director in accordance with Section 7 of this Article III. Special meetings shall be called by the Secretary on like notice at the written request of a majority of the directors then in office.

            Section 6. Notice . Notice of any regular (if required) or special meeting of the Board of Directors may be given verbally in person, verbally by telephone (including by leaving verbal notice on a message or recording device), or in writing. If in writing, notice shall be delivered personally, by mail, by facsimile transmission (directed to the facsimile transmission number for which the director has consented to receive notice), by telegram, by electronic mail (directed to such electronic mail address to which the director has consented to receive notice), or by other form of electronic transmission pursuant to which the director has consented to receive notice. If notice is given verbally in person, verbally by telephone, or in writing by personal delivery, by facsimile transmission, by telegram, by electronic mail, or by other form of electronic transmission pursuant to which the director has consented to receive notice, then such notice shall be given on not less than twenty-four hours' notice to each director. If written notice is delivered by mail, then it shall be given on not less than three (3) calendar days' notice to each director.

            Section 7. Waiver of Notice . Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing or by electronic transmission, whether before or after such meeting is held, or if he or she shall sign the minutes or attend the meeting, except that if such director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such director shall not be deemed to have waived notice of such meeting. If waiver of notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director.

            Section 8. Quorum and Powers of a Majority . At all meetings of the Board of Directors and of each committee thereof, a majority of the members of the Board of Directors or of such committee shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting of the Board of Directors or a committee thereof at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of law, of the Certificate of Incorporation, or of these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present.

            Section 9. Manner of Acting . (a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

                   (b)       Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee; provided however , that such electronic transmission or transmissions must either set forth or be submitted with information from which it can be determined that the electronic transmission or transmissions were authorized by the director. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

            Section 10. Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more directors, which to the extent provided in said resolution or resolutions shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation (including the power and authority to designate other committees of the Board of Directors); provided, however, that no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the [Business Corporation Act of the State of New Jersey] to be submitted to stockholders for approval or (ii) adopting, amending, or repealing any Bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of such absent or disqualified director.

            Section 11. Committee Procedure, Limitations of Committee Powers . (a) Except as otherwise provided by these Bylaws, each committee shall adopt its own rules governing the time, place, and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 6 of this Article III with respect to notices of meetings of the Board of Directors.

                   (b)       Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required.

                   (c)       Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee shall be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee.

            Section 12. Vacancies and Newly-Created Directorships . Unless otherwise provided in the Certificate of Incorporation or in these Bylaws, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Unless otherwise provided in the Certificate of Incorporation or these Bylaws, when one or more directors shall resign from the Board, effective at a future date, a majority of directors then in office, including those who have resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.

            Section 13. Compensation . (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors.

                   (b)       Each director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof.

                   (c)       Nothing contained in these Bylaws shall be construed to preclude any director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.

ARTICLE IV

OFFICERS

            Section 1. Number . The officers of the Corporation shall include a President, one or more Vice Presidents (including one or more Executive Vice Presidents and one or more Senior Vice Presidents if deemed appropriate by the Board of Directors), a Secretary, and a Treasurer. The Board of Directors also may elect such other officers as the Board of Directors may from time to time deem appropriate or necessary.

            Section 2. Election of Officers, Term, and Qualifications . The officers of the Corporation shall be elected from time to time by the Board of Directors and, except as may otherwise be expressly provided in a contract of employment duly authorized by the Board of Directors, shall hold office at the pleasure of the Board of Directors. Except for the Chairman of the Board and the Vice Chairman of the Board, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the [Business Corporation Act of the State of New Jersey].

            Section 3. Removal . Any officer elected by the Board of Directors may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the Chairman of the Board, by the Chairman of the Board.

            Section 4. Resignations . Any officer of the Corporation may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Chairman of the Board; provided , however , that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the officer. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

            Section 5. Salaries . The salaries of all officers of the Corporation shall be fixed by the Board of Directors from time to time, and no officer shall be prevented from receiving such salary by reason of the fact that he or she also is a director of the Corporation.

            Section 6. Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction and management of affairs and business of the Corporation usually vested in the chief executive officer of a corporation, including, without limitation, all powers necessary to direct and control the organizational reporting relationships within the Corporation. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. If at any time the offices of the Chairman of the Board and the Vice Chairman of the Board shall not be filled, or in the event of the temporary absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall have the powers and duties of the Chairman of the Board.

            Section 7. The President . The President shall serve as the chief operating officer of the Corporation. The President shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties customarily and usually associated with the office of the President and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            Section 8. The Vice Presidents . Each Vice President if any shall be elected, shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors or the President.

            Section 9. The Secretary and Assistant Secretaries . (a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. The Secretary shall have all such further powers and duties as are customarily and usually associated with the position of Secretary or as may from time to time be assigned to him or her by the Board of Directors or the President.

                   (b)       Each Assistant Secretary shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the President, or the Secretary. In the case of absence or disability of the Secretary, the Assistant Secretary designated by the President (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary.

            Section 10. The Treasurer and Assistant Treasurers . (a) The Treasurer shall have custody of the Corporation's funds and securities, shall be responsible for maintaining the Corporation's accounting records and statements, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer also shall maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall assure that adequate audits thereof are currently and regularly made. The Treasurer shall have all such further powers and duties as are customarily and usually associated with the position of Treasurer or as may from time to time be assigned to him or her by the Board of Directors or the President.

                   (b)       Each Assistant Treasurer shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors or the Treasurer. In the case of absence or disability of the Treasurer, the Assistant Treasurer designated by the President (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.

ARTICLE V

STOCK

            Section 1. Certificates . The shares of capital stock of the Corporation shall be represented by certificates, unless the Board of Directors provides by resolution or resolutions that some or all of the shares of any class or classes, or series thereof, of the Corporation's capital stock shall be uncertificated. Notwithstanding the adoption of any such resolution or resolutions by the Board of Directors providing for uncertificated shares, to the extent required by law, every holder of capital stock of the Corporation represented by certificates, and upon request, every holder of uncertificated shares, shall be entitled to a certificate representing such shares. Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder's name and the number of shares evidenced thereby, and shall be signed by the Chairman of the Board or a Vice Chairman, if any, or the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. If any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.

            Section 2. Transfers . Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer; provided , however , that such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law, or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books.

            Section 3. Lost, Stolen, or Destroyed Certificates . Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.

            Section 4. Registered Stockholders . The names and addresses of the holders of record of the shares of each class and series of the Corporation's capital stock, together with the number of shares of each class and series held by each record holder and the date of issue of such shares, shall be entered on the books of the Corporation. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of capital stock of the Corporation as the person entitled to exercise the rights of a stockholder, including, without limitation, the right to vote in person or by proxy at any meeting of the stockholders of the Corporation. The Corporation shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the [Business Corporation Act of the State of New Jersey].

            Section 5. Additional Powers of the Board . (a) In addition to those powers set forth in Section 2 of Article III, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock, subject to the provisions of the [Business Corporation Act of the State of New Jersey], the Certificate of Incorporation, and these Bylaws.

                   (b)       The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.

ARTICLE VI

INDEMNIFICATION

            Section 1. Indemnification . (a) The Corporation shall indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter, a "Proceeding"), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of Corporation as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan (collectively, "Another Enterprise").

                   (b)       The Corporation may indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of Another Enterprise.

            Section 2. Advancement of Expenses . (a) With respect to any person made or threatened to be made a party to any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of Another Enterprise, the Corporation shall pay the expenses (including attorneys' fees) incurred by such person in defending any such Proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided , however , that any advancement of expenses shall be made only upon receipt of an undertaking (hereinafter an "undertaking") by such person to repay all amounts advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "Final Adjudication") that such person is not entitled to be indemnified for such expenses under this Article VI or otherwise. Anything herein to the contrary notwithstanding, with respect to a Proceeding (or part thereof) initiated against the Corporation by a director or officer of the Corporation (or by a person serving at the request of the Corporation as a director or officer of Another Enterprise), the Corporation shall not be required to indemnify or to pay the expenses (including attorneys' fees) incurred by such person in prosecuting such Proceeding (or part thereof) or in defending any counterclaim, cross-claim, affirmative defense, or like claim of the Corporation in connection with such Proceeding (or part thereof) in advance of the final disposition of such Proceeding (or part thereof) unless such Proceeding was authorized by the Board of Directors of the Corporation.

                   (b)       With respect to any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of Another Enterprise, the Corporation may, in its discretion and upon such terms and conditions, if any, as the Corporation deems appropriate, pay the expenses (including attorneys' fees) incurred by such person in defending any such Proceeding in advance of its final disposition.

            Section 3. Contract Rights . With respect to any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of Another Enterprise, the rights to indemnification and to the advancement of expenses conferred in Sections 1(a) and 2(a) of this Article VI shall be contract rights.

            Section 4. Claims . (a) If (X) a claim under Section 1(a) of this Article VI with respect to any right to indemnification is not paid in full by the Corporation within sixty days after a written demand has been received by the Corporation or (Y) a claim under Section 2(a) of this Article VI with respect to any right to the advancement of expenses is not paid in full by the Corporation within twenty days after a written demand has been received by the Corporation, then the person seeking to enforce a right to indemnification or to an advancement of expenses, as the case may be, may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim.

                   (b)       If successful in whole or in part in any suit brought pursuant to Section 4(a) of this Article VI, or in a suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the person seeking to enforce a right to indemnification or an advancement of expenses hereunder or the person from whom the Corporation sought to recover an advancement of expenses, as the case may be, shall be entitled to be paid by the Corporation the reasonable expenses (including attorneys' fees) of prosecuting or defending such suit.

                   (c)       In any suit brought by a person seeking to enforce a right to indemnification hereunder (but not a suit brought by a person seeking to enforce a right to an advancement of expenses hereunder), it shall be a defense that the person seeking to enforce a right to indemnification has not met any applicable standard for indemnification under applicable law. With respect to any suit brought by a person seeking to enforce a right to indemnification or right to advancement of expenses hereunder or any suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), neither (i) the failure of the Corporation to have made a determination prior to commencement of such suit that indemnification of such person is proper in the circumstances because such person has met the applicable standards of conduct under applicable law, nor (ii) an actual determination by the Corporation that such person has not met such applicable standards of conduct, shall create a presumption that such person has not met the applicable standards of conduct or, in a case brought by such person seeking to enforce a right to indemnification, be a defense to such suit.

                   (d)       In any suit brought by a person seeking to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the burden shall be on the Corporation to prove that the person seeking to enforce a right to indemnification or to an advancement of expenses or the person from whom the Corporation seeks to recover an advancement of expenses is not entitled to be indemnified, or to such an advancement of expenses, under this Article VI or otherwise.

            Section 5. Non-Exclusive Rights . The indemnification and advancement of expenses provided in this Article VI shall not be deemed exclusive of any other rights to which any person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.

            Section 6. Insurance . The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI or otherwise.

ARTICLE VII

MISCELLANEOUS

            Section 1. Books and Records . (a) Any books or records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method; provided , however , that the books and records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any books or records so kept upon the request of any person entitled to inspect such records pursuant to the Certificate of Incorporation, these Bylaws, or the provisions of the [Business Corporation Act of the State of New Jersey].

                   (b)       It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of the stock ledger to prepare and make, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the stockholder's name. Nothing contained in this subsection (b) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine such list.

                   (c)       Except to the extent otherwise required by law, or by the Certificate of Incorporation, or by these Bylaws, the Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the stock ledger, books, records, and accounts of the Corporation, or any of them, shall be open to inspection by the stockholders and the stockholders' rights, if any, in respect thereof. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine the stock ledger, the books, records, or accounts of the Corporation.

            Section 2. Voting Shares in Other Business Entities . The President or any other officer of the Corporation designated by the Board of Directors may vote any and all shares of stock or other equity interest held by the Corporation in any other corporation or other business entity, and may exercise on behalf of the Corporation any and all rights and powers incident to the ownership of such stock or other equity interest.

            Section 3. Record Date for Distributions and Other Actions . In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution, or allotment of any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of capital stock, or for the purpose of any other lawful action, except as may otherwise be provided in these Bylaws, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing such record date is adopted, and shall not be more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

            Section 4. Fiscal Year . The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

            Section 5. Electronic Transmission . For purposes of these Bylaws, "electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

            Section 6. Amendment . These Bylaws may be altered, amended, or repealed at any meeting of the Board of Directors, or at any meeting of the stockholders of the Corporation.

END OF BYLAWS

			STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 04/20/1999991153815 - 2697010
CERTIFICATE TO RESTORE TO GOOD STANDING A DELAWARE LIMITED LIABILITY COMPANY PURSUANT TO TITLE 6,. SEC. 18-1107
1.	Name of Limited Liability Company: CARBON COMPOSITE LLC
2	Date of original filing with Delaware Secretary of State: DECEMBER 19, 1996
I, John D. McCallum, Authorized Parson of the above named limited liability company do hereby certify that this limited liability company is paying all annual taxes, penalties and interest due to the State of Delaware.
I do hereby request this limited liability company be restored to Good Standing.
		/s/ JOHN D. McCALLUM Authorized Person John D. McCallum Type name

	STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:05 AM 04/20/1999 991153818 - 2697010
CERTIFICATE OF AMENDMENT OF CARBON COMPOSITE LLC A LIMITED LIABILITY COMPANY
FIRST: The name of the limited liability company is:
CARBON COMPOSITE LLC
SECOND: The Certificate of Formation of the limited liability company is hereby amended as follows:
Its registered office in the State of Delaware is to be located at 1013 Centre Road, in the City of Wilmington, County of New Castle, 19805; and its registered agent at such address is Corporation Service Company.
IN WITNESS WHEREOF, the undersigned, has executed, signed and acknowledged this Certificate of Amendment this 1st day of April, A. D. 1999.
/s/ JOHN D. McCALLUM Authorized person
John D. McCallum Type name

CONECTIV - - - - AMENDED AND RESTATED BYLAWS - - - - ARTICLE I OFFICES
Section 1. Offices . The registered office shall be in the State of Delaware. The Corporation may have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or as may be necessary or convenient to the business of the Corporation.
ARTICLE II MEETINGS OF STOCKHOLDERS
Section 1. Annual Meeting . The annual meeting of the stockholders of the Corporation shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. In lieu of holding an annual meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote communication. Section 2. Special Meetings . Special meetings of the stockholders of the Corporation shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. In lieu of holding a special meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any special meeting of stockholders may be held solely by means of remote communication. Section 3. Notice of Meetings and Record Date . (a) The Corporation shall give notice of any annual or special meeting of stockholders. Notices of meetings of the stockholders shall state the place, if any, date, and hour of the meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. In the case of a special meeting, the notice shall state the purpose or purposes for which the meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting. Unless otherwise provided by applicable law or the Certificate of Incorporation, notice shall be given to each stockholder entitled to vote at such meeting not fewer than ten days or more than sixty days before the date of the meeting. Adopted July 29, 2002 (b) Notice to stockholders may be given by writing in paper form or solely in the form of electronic transmission as permitted by this subsection (b). If given by writing in paper form, notice may be delivered personally, may be delivered by mail, or, with the consent of the stockholder entitled to receive notice, may be delivered by facsimile telecommunication or any of the other means of electronic transmission specified in this subsection (b). If mailed, such notice shall be delivered by postage prepaid envelope directed to each stockholder at such stockholder's address as it appears in the records of the Corporation. Any notice to stockholders given by the Corporation shall be effective if delivered or given by a form of electronic transmission to which the stockholder to whom the notice is given has consented. Notice given pursuant to this subsection shall be deemed given: (1) if by facsimile telecommunication, when directed to a facsimile telecommunication number at which the stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (3) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by personal delivery, by mail, or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein. (c) Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder either in a writing signed by such stockholder or by electronic transmission, whether such waiver is given before or after such meeting is held. If such a waiver is given by electronic transmission, the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder. (d) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty or fewer than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Section 4. Quorum and Adjournment . Except as otherwise required by law, by the Certificate of Incorporation of the Corporation, or by these Bylaws, the presence, in person or represented by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If such majority shall not be present or represented at any meeting of the stockholders, the stockholders present, although less than a quorum, shall have the power to adjourn the meeting to another time and place. Section 5. Adjourned Meetings . When a meeting is adjourned to another time and place, if any, unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the date, time, and place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the stockholders may transact any business that might have been transacted at the original meeting. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided , however , that the Board of Directors may fix a new record date for the adjourned meeting. If an adjournment is for more than 30 days or, if after an adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting. Section 6. Vote Required . Except as otherwise provided by law or by the Certificate of Incorporation: (a) Directors shall be elected by a plurality in voting power of the shares present in person or represented by proxy at a meeting of the stockholders and entitled to vote in the election of directors; and (b) Whenever any corporate action other than the election of directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or represented by proxy at a meeting of stockholders and entitled to vote on the subject matter. Section 7. Manner of Voting; Proxies . (a) At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Each stockholder shall be entitled to vote each share of stock having voting power and registered in such stockholder's name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting. (b) Each person entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute valid means by which a stockholder may grant such authority:
	(1) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or the stockholder's authorized officer, director, employee, or agent signing such writing or causing such person's signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; and (2) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person or persons who will be the holder of the proxy or to an agent of the proxyholder(s) duly authorized by such proxyholder(s) to receive such transmission; provided , however , that any such telegram, cablegram, or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram, or other electronic transmission was authorized by the stockholder. If it is determined that any such telegram, cablegram, or other electronic transmission is valid, the inspectors or, if there are no inspectors, such other persons making that determination, shall specify the information upon which they relied.
Any copy, facsimile telecommunication, or other reliable reproduction of a writing or electronic transmission authorizing a person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or electronic transmission for any and all purposes for which the original writing or electronic transmission could be used; provided , however , that such copy, facsimile telecommunication, or other reproduction shall be a complete reproduction of the entire original writing or electronic transmission. Section 8. Remote Communication . For the purposes of these Bylaws, if authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders may, by means of remote communication: (A) participate in a meeting of stockholders; and (B) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation. Section 9. Stockholder Action Without a Meeting . (a) Except as otherwise provided by law or by the Certificate of Incorporation, any action required to be taken at any meeting of stockholders of the Corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book or books in which meetings of stockholders are recorded; provided , however , that delivery made to the Corporation's registered office in the State of Delaware shall be by hand or by certified mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of the holders to take the action were delivered to the Corporation. (b) A telegram, cablegram, or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed, and dated for the purposes of these Bylaws, provided that any such telegram, cablegram, or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (A) that the telegram, cablegram, or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (B) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram, or electronic transmission. Any consent by means of telegram, cablegram, or other electronic transmission shall be deemed to have been signed on the date on which such telegram, cablegram, or electronic transmission was transmitted. No consent given by telegram, cablegram, or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a Corporation's registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram, or other electronic transmission may be otherwise delivered to the principal place of business of the Corporation or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent, and in the manner provided by resolution of the Board of Directors of the Corporation. (c) Any copy, facsimile, or other reliable reproduction of a consent in writing (or reproduction in paper form of a consent by telegram, cablegram, or electronic transmission) may be substituted or used in lieu of the original writing (or original reproduction in paper form of a consent by telegram, cablegram, or electronic transmission) for any and all purposes for which the original consent could be used, provided that such copy, facsimile, or other reproduction shall be a complete reproduction of the entire original writing (or original reproduction in paper form of a consent by telegram, cablegram, or electronic transmission). (d) In order to determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directions. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action of the Board of Directors is required by applicable law, the Certificate of Incorporation, or these Bylaws, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner set forth in subsections (a) and (b) of this Section 9. If no record date has been fixed by the Board of Directors and prior action of the Board of Directors is required by applicable law, the Certificate of Incorporation, or these Bylaws, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
ARTICLE III DIRECTORS
Section 1. Number . The number of directors that shall constitute the whole Board of Directors initially shall be one (1), and thereafter shall be such number of directors to be determined from time to time by resolution adopted by the Board of Directors. Section 2. Powers . The Board of Directors shall exercise all of the powers of the Corporation except such as are by applicable law, by the Certificate of Incorporation of this Corporation, or by these Bylaws conferred upon or reserved to the stockholders of any class or classes or series thereof. Section 3. Resignations and Removal . (a) Any director may resign at any time by giving written notice in writing or by electronic transmission to the Board of Directors or the Secretary; provided , however , that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective. (b) Except as otherwise may be provided in the Certificate of Incorporation, any director or the entire Board of Directors may be removed with or without cause, by the holders of capital stock having a majority in voting power of the shares entitled to vote in the election of directors. Section 4. Regular Meetings . Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the State of Delaware, as shall from time to time be determined by the Board of Directors, such determination to constitute the only notice of such regular meetings to which any director shall be entitled. In the absence of any such determination, such meetings shall be held, upon notice to each director in accordance with Section 7 of this Article III, at such times and places, within or without the State of Delaware, as shall be designated by the Chairman of the Board. Section 5. Special Meetings . Special meetings of the Board of Directors shall be held at the call of the Chairman of the Board at such times and places, within or without the State of Delaware, as he or she shall designate, upon notice to each director in accordance with Section 7 of this Article III. Special meetings shall be called by the Secretary on like notice at the written request of a majority of the directors then in office. Section 6. Notice . Notice of any regular (if required) or special meeting of the Board of Directors may be given verbally in person, verbally by telephone (including by leaving verbal notice on a message or recording device), or in writing. If in writing, notice shall be delivered personally, by mail, by facsimile transmission (directed to the facsimile transmission number for which the director has consented to receive notice), by telegram, by electronic mail (directed to such electronic mail address to which the director has consented to receive notice), or by other form of electronic transmission pursuant to which the director has consented to receive notice. If notice is given verbally in person, verbally by telephone, or in writing by personal delivery, by facsimile transmission, by telegram, by electronic mail, or by other form of electronic transmission pursuant to which the director has consented to receive notice, then such notice shall be given on not less than twenty-four hours' notice to each director. If written notice is delivered by mail, then it shall be given on not less than three (3) calendar days' notice to each director. Section 7. Waiver of Notice . Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing or by electronic transmission, whether before or after such meeting is held, or if he or she shall sign the minutes or attend the meeting, except that if such director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such director shall not be deemed to have waived notice of such meeting. If waiver of notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director. Section 8. Quorum and Powers of a Majority . At all meetings of the Board of Directors and of each committee thereof, a majority of the members of the Board of Directors or of such committee shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting of the Board of Directors or a committee thereof at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of law, of the Certificate of Incorporation, or of these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present. Section 9. Manner of Acting . (a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. (b) Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee; provided however , that such electronic transmission or transmissions must either set forth or be submitted with information from which it can be determined that the electronic transmission or transmissions were authorized by the director. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Section 10. Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more directors, which to the extent provided in said resolution or resolutions shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation (including the power and authority to designate other committees of the Board of Directors); provided, however, that no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporation Law of the State of Delaware to be submitted to stockholders for approval or (ii) adopting, amending, or repealing any Bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of such absent or disqualified director. Section 11. Committee Procedure, Limitations of Committee Powers . (a) Except as otherwise provided by these Bylaws, each committee shall adopt its own rules governing the time, place, and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 6 of this Article III with respect to notices of meetings of the Board of Directors. (b) Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required. (c) Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee shall be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee. Section 12. Vacancies and Newly-Created Directorships . Unless otherwise provided in the Certificate of Incorporation or in these Bylaws, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Unless otherwise provided in the Certificate of Incorporation or these Bylaws, when one or more directors shall resign from the Board, effective at a future date, a majority of directors then in office, including those who have resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective. Section 13. Compensation . (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors. (b) Each director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof. (c) Nothing contained in these Bylaws shall be construed to preclude any director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.
ARTICLE IV OFFICERS
Section 1. Number . The officers of the Corporation shall include a President, one or more Vice Presidents (including one or more Executive Vice Presidents and one or more Senior Vice Presidents if deemed appropriate by the Board of Directors), a Secretary, and a Treasurer. The Board of Directors also may elect such other officers as the Board of Directors may from time to time deem appropriate or necessary. Section 2. Election of Officers, Term, and Qualifications . The officers of the Corporation shall be elected from time to time by the Board of Directors and, except as may otherwise be expressly provided in a contract of employment duly authorized by the Board of Directors, shall hold office at the pleasure of the Board of Directors. Except for the Chairman of the Board and the Vice Chairman of the Board, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the General Corporation Law of the State of Delaware. Section 3. Removal . Any officer elected by the Board of Directors may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the Chairman of the Board, by the Chairman of the Board. Section 4. Resignations . Any officer of the Corporation may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Chairman of the Board; provided , however , that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the officer. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5. Salaries . The salaries of all officers of the Corporation shall be fixed by the Board of Directors from time to time, and no officer shall be prevented from receiving such salary by reason of the fact that he or she also is a director of the Corporation. Section 6. Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction and management of affairs and business of the Corporation usually vested in the chief executive officer of a corporation, including, without limitation, all powers necessary to direct and control the organizational reporting relationships within the Corporation. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. If at any time the offices of the Chairman of the Board and the Vice Chairman of the Board shall not be filled, or in the event of the temporary absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall have the powers and duties of the Chairman of the Board. Section 7. The President . The President shall serve as the chief operating officer of the Corporation. The President shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties customarily and usually associated with the office of the President and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer. Section 8. The Vice Presidents . Each Vice President if any shall be elected, shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors or the President. Section 9. The Secretary and Assistant Secretaries . (a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. The Secretary shall have all such further powers and duties as are customarily and usually associated with the position of Secretary or as may from time to time be assigned to him or her by the Board of Directors or the President. (b) Each Assistant Secretary shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the President, or the Secretary. In the case of absence or disability of the Secretary, the Assistant Secretary designated by the President (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary. Section 10. The Treasurer and Assistant Treasurers . (a) The Treasurer shall have custody of the Corporation's funds and securities, shall be responsible for maintaining the Corporation's accounting records and statements, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer also shall maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall assure that adequate audits thereof are currently and regularly made. The Treasurer shall have all such further powers and duties as are customarily and usually associated with the position of Treasurer or as may from time to time be assigned to him or her by the Board of Directors or the President. (b) Each Assistant Treasurer shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors or the Treasurer. In the case of absence or disability of the Treasurer, the Assistant Treasurer designated by the President (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.
ARTICLE V STOCK
Section 1. Certificates . The shares of capital stock of the Corporation shall be represented by certificates, unless the Board of Directors provides by resolution or resolutions that some or all of the shares of any class or classes, or series thereof, of the Corporation's capital stock shall be uncertificated. Notwithstanding the adoption of any such resolution or resolutions by the Board of Directors providing for uncertificated shares, to the extent required by law, every holder of capital stock of the Corporation represented by certificates, and upon request, every holder of uncertificated shares, shall be entitled to a certificate representing such shares. Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder's name and the number of shares evidenced thereby, and shall be signed by the Chairman of the Board or a Vice Chairman, if any, or the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. If any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue. Section 2. Transfers . Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer; provided , however , that such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law, or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books. Section 3. Lost, Stolen, or Destroyed Certificates . Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed. Section 4. Registered Stockholders . The names and addresses of the holders of record of the shares of each class and series of the Corporation's capital stock, together with the number of shares of each class and series held by each record holder and the date of issue of such shares, shall be entered on the books of the Corporation. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of capital stock of the Corporation as the person entitled to exercise the rights of a stockholder, including, without limitation, the right to vote in person or by proxy at any meeting of the stockholders of the Corporation. The Corporation shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the General Corporation Law of the State of Delaware. Section 5. Additional Powers of the Board . (a) In addition to those powers set forth in Section 2 of Article III, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock, subject to the provisions of the General Corporation Law of the State of Delaware, the Certificate of Incorporation, and these Bylaws. (b) The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.
ARTICLE VI INDEMNIFICATION
Section 1. Indemnification . (a) The Corporation shall indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter, a "Proceeding"), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of Corporation as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan (collectively, "Another Enterprise"). (b) The Corporation may indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of Another Enterprise. Section 2. Advancement of Expenses . (a) With respect to any person made or threatened to be made a party to any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of Another Enterprise, the Corporation shall pay the expenses (including attorneys' fees) incurred by such person in defending any such Proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided , however , that any advancement of expenses shall be made only upon receipt of an undertaking (hereinafter an "undertaking") by such person to repay all amounts advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "Final Adjudication") that such person is not entitled to be indemnified for such expenses under this Article VI or otherwise. Anything herein to the contrary notwithstanding, with respect to a Proceeding (or part thereof) initiated against the Corporation by a director or officer of the Corporation (or by a person serving at the request of the Corporation as a director or officer of Another Enterprise), the Corporation shall not be required to indemnify or to pay the expenses (including attorneys' fees) incurred by such person in prosecuting such Proceeding (or part thereof) or in defending any counterclaim, cross-claim, affirmative defense, or like claim of the Corporation in connection with such Proceeding (or part thereof) in advance of the final disposition of such Proceeding (or part thereof) unless such Proceeding was authorized by the Board of Directors of the Corporation. (b) With respect to any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of Another Enterprise, the Corporation may, in its discretion and upon such terms and conditions, if any, as the Corporation deems appropriate, pay the expenses (including attorneys' fees) incurred by such person in defending any such Proceeding in advance of its final disposition. Section 3. Contract Rights . With respect to any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of Another Enterprise, the rights to indemnification and to the advancement of expenses conferred in Sections 1(a) and 2(a) of this Article VI shall be contract rights. Section 4. Claims . (a) If (X) a claim under Section 1(a) of this Article VI with respect to any right to indemnification is not paid in full by the Corporation within sixty days after a written demand has been received by the Corporation or (Y) a claim under Section 2(a) of this Article VI with respect to any right to the advancement of expenses is not paid in full by the Corporation within twenty days after a written demand has been received by the Corporation, then the person seeking to enforce a right to indemnification or to an advancement of expenses, as the case may be, may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. (b) If successful in whole or in part in any suit brought pursuant to Section 4(a) of this Article VI, or in a suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the person seeking to enforce a right to indemnification or an advancement of expenses hereunder or the person from whom the Corporation sought to recover an advancement of expenses, as the case may be, shall be entitled to be paid by the Corporation the reasonable expenses (including attorneys' fees) of prosecuting or defending such suit. (c) In any suit brought by a person seeking to enforce a right to indemnification hereunder (but not a suit brought by a person seeking to enforce a right to an advancement of expenses hereunder), it shall be a defense that the person seeking to enforce a right to indemnification has not met any applicable standard for indemnification under applicable law. With respect to any suit brought by a person seeking to enforce a right to indemnification or right to advancement of expenses hereunder or any suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), neither (i) the failure of the Corporation to have made a determination prior to commencement of such suit that indemnification of such person is proper in the circumstances because such person has met the applicable standards of conduct under applicable law, nor (ii) an actual determination by the Corporation that such person has not met such applicable standards of conduct, shall create a presumption that such person has not met the applicable standards of conduct or, in a case brought by such person seeking to enforce a right to indemnification, be a defense to such suit. (d) In any suit brought by a person seeking to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the burden shall be on the Corporation to prove that the person seeking to enforce a right to indemnification or to an advancement of expenses or the person from whom the Corporation seeks to recover an advancement of expenses is not entitled to be indemnified, or to such an advancement of expenses, under this Article VI or otherwise. Section 5. Non-Exclusive Rights . The indemnification and advancement of expenses provided in this Article VI shall not be deemed exclusive of any other rights to which any person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person. Section 6. Insurance . The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI or otherwise.
ARTICLE VII MISCELLANEOUS
Section 1. Books and Records . (a) Any books or records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method; provided , however , that the books and records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any books or records so kept upon the request of any person entitled to inspect such records pursuant to the Certificate of Incorporation, these Bylaws, or the provisions of the General Corporation Law of the State of Delaware. (b) It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of the stock ledger to prepare and make, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the stockholder's name. Nothing contained in this subsection (b) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine such list. (c) Except to the extent otherwise required by law, or by the Certificate of Incorporation, or by these Bylaws, the Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the stock ledger, books, records, and accounts of the Corporation, or any of them, shall be open to inspection by the stockholders and the stockholders' rights, if any, in respect thereof. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine the stock ledger, the books, records, or accounts of the Corporation. Section 2. Voting Shares in Other Business Entities . The President or any other officer of the Corporation designated by the Board of Directors may vote any and all shares of stock or other equity interest held by the Corporation in any other corporation or other business entity, and may exercise on behalf of the Corporation any and all rights and powers incident to the ownership of such stock or other equity interest. Section 3. Record Date for Distributions and Other Actions . In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution, or allotment of any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of capital stock, or for the purpose of any other lawful action, except as may otherwise be provided in these Bylaws, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing such record date is adopted, and shall not be more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto. Section 4. Fiscal Year . The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine. Section 5. Electronic Transmission . For purposes of these Bylaws, "electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process. Section 6. Amendment . These Bylaws may be altered, amended, or repealed at any meeting of the Board of Directors, or at any meeting of the stockholders of the Corporation. END OF BYLAWS

RESTATED CERTIFICATE OF INCORPORATION OF CONECTIV
A. The present name of the corporation is Conectiv. The corporation was originally incorporated under the name DS, Inc., which name was changed to Conectiv, Inc. on December 24, 1996 and to Conectiv on March 1, 1998. The original certificate of incorporation was filed with the Secretary of State of the State of Delaware on August 8, 1996. B. This Restated Certificate of Incorporation of the corporation, which both restates and further amends the provisions of the corporation's Certificate of Incorporation, as amended, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware and by the written consent of its sole stockholder in accordance with Section 228 of the General Corporation Law of the State of Delaware. C. The Certificate of Incorporation of the corporation is hereby amended and restated to read in its entirety as follows: FIRST : The name of this Corporation is "Conectiv" (the "Corporation"). SECOND : The address of the Corporation's registered office in the State of Delaware is 800 King Street in the City of Wilmington, County of New Castle, 19801. The name of its registered agent at such address is Conectiv Resource Partners, Inc. c/o Legal Department. THIRD : The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH : The total number of shares of stock that the Corporation shall have authority to issue shall be One Thousand (1,000) shares of Common Stock, par value one cent ($0.01) per share. FIFTH : In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter and repeal the by-laws of the Corporation, subject to the power of the stockholders of the Corporation to alter or repeal any by-law whether adopted by them or otherwise. SIXTH : Unless and except to the extent that the by-laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. SEVENTH : The Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this article. EIGHTH : LIMITATION ON DIRECTOR LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS SECTION I. LIMITED LIABILITY. A person who is or was a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the DGCL, or (d) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. The elimination and limitation of liability provided herein shall continue after a director has ceased to occupy such position as to acts or omissions occurring during such director's term or terms of office, and no amendment, repeal or modification of this Article IX shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment, repeal or modification. SECTION II. RIGHT TO INDEMNIFICATION. 1. Each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a " proceeding "), by reason of the fact that he or she, or the person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expenses, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in this Article VIII, Section II, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if authorized by the Board of Directors of the Corporation. Any indemnification under this Article VIII, Section II (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standard set forth in the DGCL. Such a determination shall be made (a) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; (b) by independent legal counsel (compensated by the Corporation) in a written opinion; (c) by the stockholders; or (d) in any other manner permitted by the DGCL. In addition to the right to indemnification conferred in this Article VIII, Section II, each of the above persons shall have the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided , however , that, if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section II or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers. The right to indemnification and to an advancement of expenses conferred in this Article VIII, Section II, shall be a contract right. 2. If a claim under paragraph 1 of this Section II is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim (including attorneys' fees). It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. In any suit brought by the claimant to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the claimant is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII or otherwise shall be on the Corporation. 3. The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article VIII, Section II, shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. 4. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL. 5. The Corporation may enter into an indemnity agreement with any director, officer, employee or agent of the Corporation, or of another corporation, partnership, joint venture, trust or other enterprise, upon terms and conditions that the Board of Directors deems appropriate, as long as the provisions of the agreement are not impermissible under applicable law. 6. Any amendment or repeal of this Article VIII, Section II, shall not be retroactive in effect. 7. In case any provision in this Article VIII, Section II, shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to the persons indemnified hereby to the fullest extent permitted by law. 8. The Corporation may, by action of the Board of Directors, authorize one or more officers to grant rights to indemnification and advancement of expenses to employees or agents of the Corporation on such terms and conditions as such officer or officers deem appropriate under the circumstances. NINTH: That the effective date and time of the merger shall be 4:01 p.m. on August 1, 2002. IN WITNESS WHEREOF, Conectiv has caused this Restated Certificate of Incorporation to be executed by Thomas S. Shaw, its President, as of the 1 ^st day of August, 2002.
	Conectiv By: /s/ Thomas S. Shaw Name: Thomas S. Shaw Title: President

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF CONECTIV BETHLEHEM, INC. Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware
Conectiv Bethlehem, Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows: 1. The name of the corporation is Conectiv Bethlehem, Inc. (the "Corporation"). The original Certificate of Incorporation was filed with the Secretary of the State of the State of Delaware on August 1, 2001. 2. This Amended and Restated Certificate of Incorporation amends and restates the original Certificate of Incorporation of the Corporation and has been adopted and approved in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware. 3. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as follows: FIRST: The name of the corporation is Conectiv Bethlehem, Inc. SECOND: The registered office of Conectiv Bethlehem, Inc. in the State of Delaware is located at 800 King Street, Wilmington, County of New Castle, 19801, and its registered agent at such office shall be Conectiv Resource Partners, Inc., c/o Legal Department. THIRD: The purposes of the Corporation and the nature and objects of the business to be transacted, promoted, conducted or carried out are: (i) to develop, construct, test, install, start up, own, operate and finance an approximately 1090 MW electric generating facility on a single site in Lower Saucon Township and the City of Bethlehem, Pennsylvania; (ii) to carry out all of its obligations and exercise all of its rights under the agreements, instruments, promissory notes, certificates, financing statements or documents entered into for the accomplishment of the above-mentioned purposes; and (iii) to engage in any lawful act or activity and to exercise any powers permitted under the laws of Delaware that, in either case, are incidental to and necessary or convenient for the accomplishment of the above-mentioned purposes. FOURTH: The total number of shares of stock that the Corporation shall be authorized to issue is One Thousand (1,000) shares of Common Stock having a par value of One Dollar ($1.00) per share. FIFTH: The Board of Directors may make, add to, delete from, alter and repeal any By-law of the Corporation. SIXTH: No director of the Corporation shall be personally liable to the Corporation for monetary damages for breach of fiduciary duty by such director; provided, however, that this Article SIXTH shall not eliminate or limit the liability of a director to the extent provided by law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated Certificate of Incorporation to be executed by its Senior Vice President this 21 day of June 2002.
	CONECTIV BETHLEHEM, INC. By: /s/ Barbara S. Graham Name: Barbara S. Graham Title: Senior Vice President

CERTIFICATE OF CONVERSION FROM A CORPORATION TO A LIMITED LIABILITY COMPANY PURSUANT TO SECTION 266 OF THE DELAWARE GENERAL CORPORATION LAW ("DGCL") AND SECTION 18-214 OF THE DELAWARE LIMITED LIABILITY COMPANY ACT ("LLC ACT")
1. The date on which the original Certificate of Incorporation for Conectiv Bethlehem, Inc. was filed with the Secretary of State of Delaware is August 1, 2001 . 2. The name of the corporation immediately prior to filing this Certificate of Conversion is Conectiv Bethlehem, Inc. 3. The name of the limited liability company into which the corporation is herein being converted is Conectiv Bethlehem, LLC . 4. The conversion has been approved in accordance with the provisions of Section 266 of the DGCL and Section 18-214 of the LLC Act. 5. The effective date of the conversion of Conectiv Bethlehem, Inc. to a limited liability company shall be the date on which this Certificate of Conversion is filed in the Office of the Secretary of State of the State of Delaware. Executed as of July 30, 2002:
	By: /s/ Philip S. Reese Authorized Officer Name: Philip S. Reese Print or Type Name

CERTIFICATE OF FORMATION OF CONECTIV BETHLEHEM, LLC
The undersigned, an authorized natural person, in order to form a limited liability company under Section 18-201 of the Delaware Limited Liability Company Act, hereby certifies as follows: Section 1. Name . The name of the limited liability company is Conectiv Bethlehem, LLC (the "Company"). Section 2. Registered Office and Registered Agent . The address of the Company's registered office in the State of Delaware is 800 King Street, Wilmington, in the County of New Castle, 19801; and its registered agent at such office shall be Conectiv Resource Partners, Inc. c/o Legal Department. Section 3. Purpose . The purpose and the nature and objects of the business to be transacted, promoted, conducted or carried out by the Company are: (i) to develop, construct, test, install, start up, own, operate and finance an approximately 1090 MW electric generating facility on a single site in Lower Saucon Township and the City of Bethlehem, Pennsylvania; (ii) to carry out all of its obligations and exercise all of its rights under the agreements, instruments, promissory notes, certificates, financing statements or documents entered into for the accomplishment of the above-mentioned purposes; and (iii) to engage in any lawful act or activity and to exercise any powers permitted under the laws of Delaware that, in either case, are incidental to and necessary or convenient for the accomplishment of the above-mentioned purposes. Section 4. Limitation on Personal Liability of Members and Managers . The debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no member or manager of the Company shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member or acting as a manager of the Company. IN WITNESS WHEREOF, the undersigned, an authorized natural person of the Company, hereby certifies that the facts stated herein are true as of July 30, 2002.
	/s/ Nina J. Clements Nina J. Clements Authorized Person

CERTIFICATE OF INCORPORATION OF DCI-BURNEY HOLDING, INC.
FIRST: The name of the Corporation is DCI-Burney Holding, Inc. SECOND: The registered office of DCI-Burney Holding, Inc. in the State of Delaware is located at 800 King Street, Wilmington, County of New Castle, 19801, and its registered agent shall be Conectiv Resource Partners, Inc., c/o Legal Department. THIRD: The purpose of the Corporation and the nature and objects of the business to be transacted, promoted, conducted or carried out are:
		To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock that the Corporation shall be authorized to issue is One Thousand (1,000) shares of Common Stock having a par value of One Dollar ($1.00) per share. FIFTH: The name and mailing address of the Incorporator of the Corporation is:
	Name Diana C. DeAngelis			Address P.O. Box 231 Wilmington, DE 19899
SIXTH: The names and mailing addresses of the directors who shall serve until the first annual meeting of stockholders or until their successors are elected and qualify are:
	Name Howard E. Cosgrove			Address P.O. Box 231 Wilmington, DE 19899
	John C. van Roden, Jr.			P.O. Box 231 Wilmington, DE 19899
	Peter F. Clark			P.O. Box 231 Wilmington, DE 19899
SEVENTH: The Board of Directors may make, add to, delete from, alter and repeal any By-law of the Corporation. EIGHTH: No director of the Corporation shall be personally liable to the Corporation for monetary damages for breach of fiduciary duty by such director; provided, however, that this Article EIGHTH shall not eliminate or limit the liability of a director to the extent provided by law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. The Corporation shall indemnify its directors, officers, employees and agents against expenses, judgment, fines and amounts paid in settlement actually and reasonably incurred by them by reason of their serving in such capacity to the fullest extent permitted by the Delaware General Corporation Law. I, the undersigned, being the Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this Certificate of Incorporation, hereby declaring and certifying that this is my act and deed and that the facts herein stated are true and accordingly have hereunto set my hand and seal this 5 ^th day of October, 2000.
			/s/ Diana C. DeAngelis Diana C. DeAngelis

CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF DCI-BURNEY HOLDING, INC. Pursuant to Section 242 Of the General Corporation Law Of the State of Delaware
DCI-Burney Holding, Inc., a corporation duly organized and validly existing under and by virtue of the General Corporation Law of the State of Delaware ("GCL"), does hereby certify that: 1. The Board of Directors of DCI-Burney Holding, Inc. (the "Company") duly adopted by Unanimous Written Consent pursuant to Section 141 of the GCL, all in accordance with Section 242 of the GCL, the following resolutions setting forth proposed amendments to the Certificate of Incorporation of the Company, declaring said amendments to be advisable and submitting them to the sole stockholder of the Company for consideration thereof:
	RESOLVED, That the Certificate of Incorporation of the Company be, and hereby is, amended by deleting the title and the first paragraph defining the name of the Company and substituting in lieu thereof the following:
	"CERTIFICATE OF INCORPORATION OF CONECTIV PENNSYLVANIA GENERATION, INC."
	FIRST:	The name of the Corporation is Conectiv Pennsylvania Generation, Inc.
	FURTHER RESOLVED, That the amendment to the Certificate of Incorporation to delete the last sentence of Article EIGHTH be, and hereby is, approved and adopted; and
2. In accordance with the provisions of Sections 228 and 242 of the GCL, the amendments were adopted by the sole shareholder of the Company without a meeting, pursuant to the written consent of the shareholder. IN WITNESS WHEREOF, the Company has caused this certificate to be executed by its Senior Vice President and Chief Financial Officer and attested to by its Assistant Secretary this 16th day of January, 2002.
			DCI-Burney Holding, Inc. By: /s/ John C. van Roden, Jr. John C. van Roden, Jr. Senior Vice President and Chief Financial Officer
Attest: By: /s/ Nina J. Clements Nina J. Clements, Asst. Secretary

B Y L A W S
OF
CONECTIV PENNSYLVANIA GENERATION, INC.

1.             OFFICES .

            1.1       Offices . In addition to its registered office in the State of Delaware, the Corporation shall have a corporate office in Wilmington, Delaware, and such other offices, either within or without the State of Delaware, at such locations as the Board of Directors may from time to time determine or the business of the Corporation may require.

2.              SEAL .

            2.1       Seal . The Corporation shall have a seal, which shall have inscribed thereon its name and year of incorporation and the words, "Corporate Seal Delaware."

3.              MEETINGS OF STOCKHOLDERS .

             3.1       Annual Meetings . The annual meeting of stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as shall be determined by the Board of Directors from time to time.

            3.2       Special Meetings . Special meetings of the stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as may be designated by the Chairman of the Board or by the Board of Directors.

            3.3       Notice of Meetings . (a) Notices of meetings of stockholders shall be in writing and shall state the place, date, and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which a meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting.

                   (b)       Such notice shall either be delivered personally, mailed, postage prepaid, or delivered by any other lawful means to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. If mailed, the notice shall be directed to the stockholder at his or her address as it appears on the records of the Corporation. Delivery of any such notice to any officer of a corporation or association or to any member of a partnership shall constitute delivery of such notice to such corporation, association, or partnership.

                   (c)       Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder in writing, whether before or after such meeting is held, or if such stockholder shall sign the minutes or attend the meeting, except that if such stockholder attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, such stockholder shall not be deemed to have waived notice of such meeting.

            3.4       Adjourned Meetings . When a meeting is adjourned to another time or place, unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders may transact any business that might have been transacted at the original meeting. If an adjournment is for more than 30 days, or if after an adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

            3.5       Quorum and Adjournment . Except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, or by these Bylaws, the presence, in person or by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction of business at all meetings of stockholders. If such majority shall not be present or represented at any meeting of stockholders, the stockholders present, although less than a quorum, shall have the power to adjourn the meeting.

            3.6       Vote Required . Except as otherwise provided by law or by the Certificate of Incorporation:

                   (a)       Directors shall be elected by a plurality of the votes present in person or represented by proxy at a meeting of stockholders and entitled to vote in the election of directors, and

                   (b)       whenever any corporate action other than the election of Directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or by proxy at a meeting of stockholders and entitled to vote on the subject matter.

            3.7       Manner of Voting . At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Each stockholder shall be entitled to vote each share of stock having voting power registered in his or her name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting.

            3.8       Stockholder Action Without a Meeting. Except as otherwise provided by law or by the Certificate of Incorporation, any action required to be taken at any meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of the holders to take the action were delivered to the Corporation.

            3.9       Proxies . (a) At any meeting of stockholders, any stockholder may be represented and vote by proxy or proxies. In the event that any form of proxy shall designate two or more persons to act as proxies, a majority of such persons present at the meeting or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by the form of proxy upon all of the persons so designated unless the form of proxy shall otherwise provide.

                   (b)       The Board of Directors may, in advance of any annual or special meeting of the stockholders, prescribe additional regulations concerning proxies and the validation of the same, which are intended to be voted at any such meeting.

            3.10       Presiding Officer and Secretary . The Chairman of the Board shall act as chairman of all meetings of the stockholders. In the absence of the Chairman of the Board, the Vice Chairman of the Board or, in his or her absence, any Director designated by the Chairman of the Board or the Board of Directors shall act as chairman of the meeting.

            The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 5.11(b) of these Bylaws shall act as secretary of all meetings of the stockholders, but in the absence of a designated Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

            3.11       Procedure . At each meeting of stockholders, the chairman of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting and shall determine the order of business and all other matters of procedure. Except to the extent inconsistent with any such rules and regulations as adopted by the Board of Directors, the chairman of the meeting may establish rules, which need not be in writing, to maintain order and safety and for the conduct of the meeting. Without limiting the foregoing, he or she may:

                   (a)       restrict attendance at any time to bona fide stockholders of record and their proxies and other persons in attendance at the invitation of the chairman;

                   (b)       restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting;

                   (c)       adjourn the meeting without a vote of the stockholders, whether or not there is a quorum present; and

                   (d)       make rules governing speeches and debate, including time limits and access to microphones.

The chairman of the meeting shall be entitled to act in his or her absolute discretion and his or her rulings shall not be subject to appeal.

4.              DIRECTORS .

            4.1       Powers and Number . The Board of Directors shall exercise all of the powers of the Corporation except such as are by law, or by the Certificate of Incorporation of this Corporation or by these Bylaws conferred upon or reserved to the stockholders of any class or classes. The number of directors that shall constitute the whole Board of Directors shall be no fewer than three (3) and no greater than nine (9), the exact number of directors to be determined from time to time by resolution adopted by the Board of Directors or the stockholders, and until otherwise determined by the Board of Directors or the stockholders, the number of directors that shall constitute the whole Board of Directors shall be three (3).

            4.1       Resignations . Any Director may resign at any time by giving written notice to the Board of Directors or the Secretary. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective.

            4.2       Presiding Officer and Secretary . The Chairman of the Board shall act as chairman of all meetings of the Board of Directors. In the absence of the Chairman of the Board, the Vice Chairman of the Board, or in the Vice Chairman's absence, the Chief Executive Officer or other person designated by the Board of Directors shall act as chairman of the meeting.

            The Secretary of the Corporation shall act as secretary of all meetings of the Board of Directors, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 5.11(b) of these Bylaws shall act as secretary of all meetings of the Board of Directors, but in the absence of a designated Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

            4.3       Annual Meetings . The Board of Directors shall meet each year immediately following the annual meeting of stockholders, at the place where such meeting of stockholders has been held, or at such other place as shall be fixed by the person presiding over the meeting of the stockholders, for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation. In the event that in any year Directors are elected by written consent in lieu of an annual meeting of stockholders, the Board of Directors shall meet in such year as soon as practicable after receipt of such written consent by the Corporation at such time and place as shall be fixed by the Chairman of the Board, for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation.

            4.4       Regular Meetings . Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the state of Delaware, as shall from time to time be determined by the Board of Directors. In the absence of any such determination, such meetings shall be held at such times and places, within or without the State of Delaware, as shall be designated by the Chairman of the Board on not less than twelve hours notice to each Director, given verbally, in writing or electronically, whether personally, by telephone (including by message or recording device), by facsimile transmission, by telegram, by telex, by electronic mail or by other electronic means, or on not less than three (3) calendar days' notice to each Director given by mail. Notice given by any of the foregoing means shall be sufficient to constitute notice of a meeting without the necessity of further notice.

            4.5       Special Meetings . Special meetings of the Board of Directors shall be held at the call of the Chairman of the Board at such times and places, within or without the State of Delaware, as he or she shall designate, on not less than twelve hours notice to each Director, given verbally, in writing or electronically, whether personally, by telephone (including by message or recording device), by facsimile transmission, by telegram, by telex, by electronic mail or by other electronic means or on not less than three (3) calendar days' notice to each Director given by mail. Notice given by any of the foregoing means shall be sufficient to constitute notice of a meeting without the necessity of further notice. Special meetings shall be called by the Secretary on like notice at the written request of a majority of the Directors then in office.

            4.6       Quorum and Powers of a Majority . At all meetings of the Board of Directors and of each committee thereof, a majority of the members shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the members present at any meeting at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of law, of the Certificate of Incorporation, or of these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present.

            4.7       Waiver of Notice . Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing, whether before or after such meeting is held, or if he or she shall sign the minutes or attend the meeting, except that if such Director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such Director shall not be deemed to have waived notice of such meeting.

            4.8       Manner of Acting . (a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

                   (b)       Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writings are filed with the minutes of proceedings of the Board of Directors or such committee.

            4.9       Compensation . (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors.

                   (b)       Each Director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof.

                   (c)       Nothing contained in these Bylaws shall be construed to preclude any Director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.

            4.10       Committees . The Board of Directors (or any committee thereof having the power and authority to do so) may designate one or more committees, each committee to consist of one or more Directors, which to the extent provided in the resolution or resolutions designating such committee shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the corporation; provided, however, that no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporation Law of Delaware (the "GCLD") to be submitted to stockholders for approval or (ii) adopting, amending, or repealing any bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member of members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of such absent or disqualified director.

            4.11       Committee Procedure, Limitations of Committee Powers . (a) Except as otherwise provided by these Bylaws, each committee shall adopt its own rules governing the time, place and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 4.6 of these Bylaws with respect to notices of special meetings of the Board of Directors.

                   (b)       Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required.

                   (c)       Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee shall be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee.

5.              OFFICERS .

            5.1       Number . (a) The officers of the Corporation shall include a Chief Executive Officer, a President, one or more Vice Presidents (including one or more Executive Vice Presidents and one or more Senior Vice Presidents if deemed appropriate by the Board of Directors), a Chief Financial Officer, a Secretary, a Treasurer, and a Controller. The Board of Directors shall also elect a Chairman of the Board and may elect a Vice Chairman of the Board. Except for the Chairman of the Board, the Vice Chairman of the Board, and the Chief Executive Officer, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the GCLD.

                   (b)       The Chief Executive Officer shall have the power to appoint one or more employees of the Corporation as divisional or departmental vice presidents and fix the duties of such appointees. However, no such divisional or departmental vice president shall be considered an officer of the Corporation.

            5.2       Election of Officers, Qualification and Term . The Chief Executive Officer, the President, any Executive Vice President, any Senior Vice President, the Chief Financial Officer, the Secretary and the Treasurer of the Corporation shall be elected from time to time by the Board of Directors and, except as may otherwise be expressly provided in a contract of employment duly authorized by the Board of Directors, shall hold office at the pleasure of the Board of Directors. The Board of Directors and the Chief Executive Officer also may elect such other officers as the Board of Directors or the Chief Executive Officer may from time to time deem appropriate or necessary.

            5.3       Removal . Any officer elected by the Board of Directors may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the Chairman of the Board or the Chief Executive Officer, by the Chairman of the Board or the Chief Executive Officer.

            5.4       Resignations . Any officer of the Corporation may resign at any time by giving written notice to the Board of Directors or to the Chairman of the Board or to the Chief Executive Officer. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

            5.5       Compensation . The compensation of all officers of the Corporation shall be fixed by or in the manner provided by the Board of Directors from time to time, and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a Director of the Corporation.

            5.6       The Chairman of the Board . The Chairman of the Board shall have the powers and duties customarily and usually associated with the office of the Chairman of the Board and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. The Chairman of the Board shall preside at meetings of the stockholders and of the Board of Directors.

            5.7       Vice Chairman of the Board . The Vice Chairman of the Board, if any, shall have the powers and duties customarily and usually associated with the office of the Vice Chairman of the Board and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors.

            5.8       Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction and management of the affairs and business of the Corporation usually vested in the chief executive officer of a corporation, including, without limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. If at any time the offices of the Chairman of the Board and the Vice Chairman of the Board shall not be filled, or in the event of the temporary absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall have the powers and duties of the Chairman of the Board.

            5.9       The President . The President shall serve as chief operating officer, shall have the powers and duties customarily and usually associated with the office of the President and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            5.10       The Vice Presidents . Each Vice President shall have such powers and duties customarily and usually associated with the office of Vice President and shall have such other powers and perform such other duties as may from time to time be assigned to him or her by the Board of Directors, the Chief Executive Officer, or the President.

            5.11       The Chief Financial Officer . The Chief Financial Officer shall be responsible for the financial affairs of the Corporation, including overseeing the duties performed by the Treasurer of the Corporation. In addition, the Chief Financial Officer shall have such powers and duties customarily and usually associated with the office of the Chief Financial Officer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            5.12       The Secretary and the Assistant Secretary . (a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. In addition, the Secretary shall have such powers and duties customarily and usually associated with the office of Secretary and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors, the Chief Executive Officer, or the President.

                   (b)       Each Assistant Secretary shall have such powers and perform such duties customarily and usually associated with the office of Assistant Secretary and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President, or the Secretary. In case of the absence or disability of the Secretary, the Assistant Secretary designated by the Chief Executive Officer (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary.

            5.13       The Treasurer and the Assistant Treasurer . (a) The Treasurer shall have custody of the Corporation's funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall also maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall see that adequate audits thereof are currently and regularly made. In addition, the Treasurer shall have such powers and duties customarily and usually associated with the office of Treasurer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President or the Chief Financial Officer.

                   (b)       Each Assistant Treasurer shall have such powers and perform such duties customarily and usually associated with the office of Assistant Treasurer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President, or the Treasurer. In case of the absence or disability of the Treasurer, the Assistant Treasurer designated by the Chief Executive Officer (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.

            5.14       Controller . The Controller shall be responsible for maintaining the accounting records and statements, and shall properly account for all monies and obligations due the Corporation and all properties, assets, and liabilities of the Corporation. The Controller shall render to the Chairman of the Board, the President or the Chief Financial Officer such periodic reports covering the results of operations of the Corporation as may be required by either of them or by law. In addition, the Controller shall have such powers and duties customarily and usually associated with the office of Controller and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President or the Chief Financial Officer.

6.              STOCK

            6.1       Certificates . Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder's name and the number of shares evidenced thereby, and shall be signed by the Chairman of the Board or a Vice Chairman, if any, or the Chief Executive Officer or the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.

            6.2       Transfers . Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, provided such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books.

            6.3       Lost, Stolen, or Destroyed Certificates . Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.

            6.4       Registered Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares as the person entitled to exercise the rights of a stockholder and shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the GCLD.

            6.5       Additional Powers of the Board . (a) In addition to those powers set forth in Section 4.1, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock subject to the provisions of the GCLD.

                   (b)       The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.

7.              INDEMNIFICATION

            7.1      Each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or the person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation, as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the GCLD, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expenses, liability, and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of his or her heirs, executors, and administrators; provided, however, that, except as provided in Section 7.2 of this Article 7, the Corporation shall not be required to indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation prior to commencement of such proceeding (or part thereof). In addition to the right to indemnification conferred in this Section 7.1, each person who is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise shall have the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the GCLD requires, the payment of such expenses incurred by a present director or officer in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such person while a director or officer of the Corporation, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such present director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article 7 or otherwise.

            7.2      If a claim under Section 7.1 of this Article 7 is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim (including attorneys' fees). It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the GCLD for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD, nor an actual determination by the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. In any suit brought by the claimant to enforce a right to indemnification or to an advancement of expenses under Section 7.1 of this Article 7, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the claimant is not entitled to be indemnified, or to such advancement of expenses, under this Article 7 or otherwise shall be on the Corporation.

            7.3      The rights with respect to indemnification and advancement of expenses conferred in Sections 7.1 and 7.2 of this Article 7 shall be contract rights.

            7.4      The Corporation may, by any manner permitted by the GCLD, provide indemnification and advancement of expenses to employees and agents of the Corporation.

            7.5      Any indemnification under this Article 7 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD. Such a determination shall be made, with respect to a person who is a director or officer of the Corporation at the time of such determination, (a) by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum; (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (c) if there are no such directors or if such directors so direct, by independent legal counsel (compensated by the Corporation) in a written opinion; or (d) by the stockholders. Such a determination shall be made, with respect to a person who is a former director or officer of the Corporation, who is a present or former employee or agent of the corporation, or who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, in any manner permitted by the GCLD, including in any of the manners set forth above governing such determination with respect to present directors and officers of the Corporation.

            7.6      The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article 7, shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the certificate of incorporation of the Corporation, these bylaws, agreement, vote of stockholders or disinterested directors, or otherwise.

            7.7      The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee, or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any such expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the GCLD.

            7.8      The Corporation may enter into an indemnity agreement with any director, officer, employee, or agent of the Corporation, or of another corporation, partnership, joint venture, trust, or other enterprise, upon terms and conditions that the Board of Directors deems appropriate, as long as the provisions of the agreement are not impermissible under applicable law.

            7.9      Any amendment or repeal of this Article 7 shall not be retroactive in effect.

            7.10      In case any provision in this Article 7 shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to the persons indemnified hereby to the fullest extent permitted by law.

            7.11      The Corporation may, by action of the Board of Directors, authorize one or more officers (i) to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officer or officers deem appropriate under the circumstances, or (ii) to establish policies relating to the indemnification of and advancement of expenses to employees and agents of the Corporation, including, without limitation, policies specifying officers or senior employees (or categories of officers or senior employees) who shall have the power to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officers or senior employees deem appropriate under the circumstances.

8.              MISCELLANEOUS

            8.1       Place and Inspection of Books . (a) The books of the Corporation other than such books as are required by law to be kept within the State of Delaware shall be kept in such place or places either within or without the State of Delaware as the Board of Directors may from time to time determine.

                   (b)       At least ten days before each meeting of stockholders, the officer in charge of the stock ledger of the Corporation shall prepare a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

                   (c)       The Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the accounts and books of the Corporation (except such as may be by law specifically open to inspection or as otherwise provided by these Bylaws) or any of them shall be open to the inspection of the stockholders and the stockholders' rights in respect thereof.

                  8.2       Voting Shares in Other Corporations . The Chief Executive Officer, the President, the Chief Financial Officer or any other officer of the Corporation designated by the Board of Directors may vote any and all shares or other interests held by the Corporation in any other corporation, limited partnership, limited liability company, or other business entity.

             8.3       Fiscal Year . The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

            8.4       Gender/Number . As used in these Bylaws, the masculine, feminine, or neuter gender, and the singular or plural number, shall each include the others whenever the context so indicates.

            8.5       Paragraph Titles . The titles of the paragraphs have been inserted as a matter of reference only and shall not control or affect the meaning or construction of any of the terms and provisions hereof.

            8.6       Amendment . These Bylaws may be altered, amended, or repealed by (a) the affirmative vote of the holders of a majority of the voting power represented by the then outstanding shares of voting stock entitled to vote on the amendment, or (b) by resolution adopted by the affirmative vote of not less than a majority of the Directors in office, at any annual or regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of the proposed alteration, amendment, or repeal be contained in written notice of such special meeting. Notwithstanding the foregoing, the amendment of any provision of these Bylaws that requires an affirmative vote in excess of a majority of the Directors in office shall require the affirmative vote of at least the number of directors the affirmative vote of whom is required by such provision.

            8.7       Certificate of Incorporation . Notwithstanding anything to the contrary contained herein, if any provision contained in these Bylaws is inconsistent with or conflicts with a provision of the Certificate of Incorporation, such provision of these Bylaws shall be superseded by the inconsistent provision in the Certificate of Incorporation to the extent necessary to give effect to such provision in the Certificate of Incorporation.

B Y L A W S

OF

DELAWARE OPERATING SERVICES COMPANY

            6.1       Certificates . Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder's name and the number of shares evidenced thereby, and shall be signed by the Chairman of the Board or a Vice Chairman, if any, or the Chief Executive Officer or the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.

            6.2       Transfers . Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, provided such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books.

            6.3       Lost, Stolen, or Destroyed Certificates . Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.

            6.4       Registered Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares as the person entitled to exercise the rights of a stockholder and shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the GCLD.

            6.5       Additional Powers of the Board . (a) In addition to those powers set forth in Section 4.1, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock subject to the provisions of the GCLD.

                   (b)       The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.

7.              INDEMNIFICATION

            7.1      Each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or the person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation, as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the GCLD, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expenses, liability, and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of his or her heirs, executors, and administrators; provided, however, that, except as provided in Section 7.2 of this Article 7, the Corporation shall not be required to indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation prior to commencement of such proceeding (or part thereof). In addition to the right to indemnification conferred in this Section 7.1, each person who is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise shall have the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the GCLD requires, the payment of such expenses incurred by a present director or officer in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such person while a director or officer of the Corporation, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such present director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article 7 or otherwise.

            7.2      If a claim under Section 7.1 of this Article 7 is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim (including attorneys' fees). It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the GCLD for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD, nor an actual determination by the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. In any suit brought by the claimant to enforce a right to indemnification or to an advancement of expenses under Section 7.1 of this Article 7, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the claimant is not entitled to be indemnified, or to such advancement of expenses, under this Article 7 or otherwise shall be on the Corporation.

            7.3      The rights with respect to indemnification and advancement of expenses conferred in Sections 7.1 and 7.2 of this Article 7 shall be contract rights.

            7.4      The Corporation may, by any manner permitted by the GCLD, provide indemnification and advancement of expenses to employees and agents of the Corporation.

            7.5      Any indemnification under this Article 7 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD. Such a determination shall be made, with respect to a person who is a director or officer of the Corporation at the time of such determination, (a) by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum; (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (c) if there are no such directors or if such directors so direct, by independent legal counsel (compensated by the Corporation) in a written opinion; or (d) by the stockholders. Such a determination shall be made, with respect to a person who is a former director or officer of the Corporation, who is a present or former employee or agent of the corporation, or who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, in any manner permitted by the GCLD, including in any of the manners set forth above governing such determination with respect to present directors and officers of the Corporation.

            7.6      The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article 7, shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the certificate of incorporation of the Corporation, these bylaws, agreement, vote of stockholders or disinterested directors, or otherwise.

            7.7      The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee, or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any such expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the GCLD.

            7.8      The Corporation may enter into an indemnity agreement with any director, officer, employee, or agent of the Corporation, or of another corporation, partnership, joint venture, trust, or other enterprise, upon terms and conditions that the Board of Directors deems appropriate, as long as the provisions of the agreement are not impermissible under applicable law.

            7.9Any amendment or repeal of this Article 7 shall not be retroactive in effect.

            7.10      In case any provision in this Article 7 shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to the persons indemnified hereby to the fullest extent permitted by law.

            7.11      The Corporation may, by action of the Board of Directors, authorize one or more officers (i) to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officer or officers deem appropriate under the circumstances, or (ii) to establish policies relating to the indemnification of and advancement of expenses to employees and agents of the Corporation, including, without limitation, policies specifying officers or senior employees (or categories of officers or senior employees) who shall have the power to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officers or senior employees deem appropriate under the circumstances.

8.              MISCELLANEOUS

            8.1       Place and Inspection of Books . (a) The books of the Corporation other than such books as are required by law to be kept within the State of Delaware shall be kept in such place or places either within or without the State of Delaware as the Board of Directors may from time to time determine.

                   (b)       At least ten days before each meeting of stockholders, the officer in charge of the stock ledger of the Corporation shall prepare a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

                   (c)       The Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the accounts and books of the Corporation (except such as may be by law specifically open to inspection or as otherwise provided by these Bylaws) or any of them shall be open to the inspection of the stockholders and the stockholders' rights in respect thereof.

            8.2       Voting Shares in Other Corporations . The Chief Executive Officer, the President, the Chief Financial Officer or any other officer of the Corporation designated by the Board of Directors may vote any and all shares or other interests held by the Corporation in any other corporation, limited partnership, limited liability company, or other business entity.

            8.3       Fiscal Year . The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

            8.4       Gender/Number . As used in these Bylaws, the masculine, feminine, or neuter gender, and the singular or plural number, shall each include the others whenever the context so indicates.

            8.5       Paragraph Titles . The titles of the paragraphs have been inserted as a matter of reference only and shall not control or affect the meaning or construction of any of the terms and provisions hereof.

            8.6       Amendment . These Bylaws may be altered, amended, or repealed by (a) the affirmative vote of the holders of a majority of the voting power represented by the then outstanding shares of voting stock entitled to vote on the amendment, or (b) by resolution adopted by the affirmative vote of not less than a majority of the Directors in office, at any annual or regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of the proposed alteration, amendment, or repeal be contained in written notice of such special meeting. Notwithstanding the foregoing, the amendment of any provision of these Bylaws that requires an affirmative vote in excess of a majority of the Directors in office shall require the affirmative vote of at least the number of directors the affirmative vote of whom is required by such provision.

            8.7       Certificate of Incorporation . Notwithstanding anything to the contrary contained herein, if any provision contained in these Bylaws is inconsistent with or conflicts with a provision of the Certificate of Incorporation, such provision of these Bylaws shall be superseded by the inconsistent provision in the Certificate of Incorporation to the extent necessary to give effect to such provision in the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF DELAWARE OPERATING SERVICES COMPANY
FIRST: The name of the corporation is Delaware Operating Services Company. SECOND: The registered office of Delaware Operating Services Company in the State of Delaware is located at 800 King Street, Wilmington, County of New Castle, 19801, and its registered agent at such office shall be Conectiv Resource Partners, Inc., c/o Legal Department. THIRD: The purpose of the Corporation and the nature and objects of the business to be transacted, promoted, conducted or carried out are:
		To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock that the Corporation shall be authorized to issue is One Thousand (1,000) shares of Common Stock having a par value of One Dollar ($1.00) per share. FIFTH: The name and mailing address of the Incorporator of the Corporation is:
	Name			Address
	Diana C. DeAngelis			P.O. Box 231 Wilmington, DE 19899
SIXTH: The names and mailing addresses of the directors who shall serve until the first annual meeting of stockholders or until their successors are elected and qualify are:
	Name Thomas S. Shaw			Address P.O. Box 231 Wilmington, DE 19899
	Barbara S. Graham			P.O. Box 231 Wilmington, DE 19899
	James P. Lavin			P.O. Box 231 Wilmington, DE 19899
SEVENTH: The Board of Directors may make, add to, delete from, alter and repeal any By-law of the Corporation. EIGHTH: No director of the Corporation shall be personally liable to the Corporation for monetary damages for breach of fiduciary duty by such director; provided, however, that this Article EIGHTH shall not eliminate or limit the liability of a director to the extent provided by law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. I, the undersigned, being the Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this Certificate of Incorporation, hereby declaring and certifying that this is my act and deed and that the facts stated herein are true and accordingly have hereunto set my hand and seal this 19th day of December, 2002.
			/s/ Diana C. DeAngelis Diana C. DeAngelis

ARTICLES OF RESTATEMENT OF CERTIFICATE AND ARTICLES OF INCORPORATION OF DELMARVA POWER & LIGHT COMPANY
1.	The name of the Corporation is DELMARVA POWER & LIGHT COMPANY.
2.	The Certificate and Articles of Incorporation of the Corporation as restated and attached hereto as Exhibit A .
3.	The Restated Certificate and Articles of Incorporation of the Corporation, which both restates and further amends the provisions of the Corporation's Certificate and Articles of Incorporation, as amended, was duly adopted in accordance with the provisions of Sections 13.10707 and 13.1-711 of the Virginia Stock Corporation Act.
4.	The Restated Certificate and Articles of Incorporation contains amendments that require shareholder approval and have been approved by unanimous consent of the shareholders of the Corporation in accordance with Section 13.1-657 of the Virginia Stock Corporation Act.
5.	The certificate of restatement shall become effective at 4 o'clock p.m. on August 8, 2002.
Dated: August 8, 2002		DELMARVA POWER & LIGHT COMPANY, a corporation Incorporated under the laws of Virginia And Delaware By: /s/ Thomas S. Shaw Name: Thomas S. Shaw Title: Chief Executive Officer

DELMARVA POWER & LIGHT COMPANY ----- AMENDED AND RESTATED BYLAWS ----- ARTICLE I OFFICES
Section 1. Offices . There shall be one registered office in the State of Delaware and one registered office in the Commonwealth of Virginia. The Corporation may have offices at such other places both within and without the State of Delaware and within and without the Commonwealth of Virginia as the Board of Directors may from time to time determine or as may be necessary or convenient to the business of the Corporation.
ARTICLE II MEETINGS OF STOCKHOLDERS
Section 1. Annual Meeting . The annual meeting of the stockholders of the Corporation shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware and within or without the Commonwealth of Virginia as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Section 2. Special Meetings . Special meetings of the stockholders of the Corporation shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware and within and without the Commonwealth of Virginia as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Section 3. Notice of Meetings and Record Date . (a) The Corporation shall give notice of any annual or special meeting of stockholders. Notices of meetings of the stockholders shall state the place, if any, date, and hour of the meeting. In the case of a special meeting, the notice shall state the purpose or purposes for which the meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting. Unless otherwise provided by applicable law or the Certificate and Articles of Incorporation (the "Certificate of Incorporation"), notice shall be given to each stockholder entitled to vote at such meeting not fewer than ten days or more than sixty days before the date of the meeting. (b) Notice to stockholders may be given by writing in paper form or solely in the form of electronic transmission as permitted by this subsection (b). If given by writing in paper form, notice may be delivered personally, may be delivered by mail, or, with the consent of the stockholder entitled to receive notice, may be delivered by facsimile telecommunication or any of the other means of electronic transmission specified in this subsection (b). If mailed, such notice shall be delivered by postage prepaid envelope directed to each stockholder at such stockholder's address as it appears in the records of the Corporation. Any notice to stockholders given by the Corporation shall be effective if delivered or given by a form of electronic transmission to which the stockholder to whom the notice is given has consented. Notice given pursuant to this subsection shall be deemed given: (1) if by facsimile telecommunication, Adopted August 8, 2002 when directed to a facsimile telecommunication number at which the stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (3) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other form of electronic transmission, when consented to by the stockholder. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by personal delivery, by mail, or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein. (c) Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder in a writing signed by such stockholder, whether such waiver is given before or after such meeting is held. (d) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty or fewer than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Section 4. Quorum and Adjournment . Except as otherwise required by law, by the Certificate of Incorporation of the Corporation, or by these Bylaws, the presence, in person or represented by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If such majority shall not be present or represented at any meeting of the stockholders, the stockholders present, although less than a quorum, shall have the power to adjourn the meeting to another time and place. Section 5. Adjourned Meetings . When a meeting is adjourned to another time and place, if any, unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the date, time, and place are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the stockholders may transact any business that might have been transacted at the original meeting. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided , however , that the Board of Directors may fix a new record date for the adjourned meeting. If an adjournment is for more than 30 days or, if after an adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting. Section 6. Vote Required . Except as otherwise provided by law or by the Certificate of Incorporation: (a) Directors shall be elected by a plurality in voting power of the shares present in person or represented by proxy at a meeting of the stockholders and entitled to vote in the election of directors; and (b) Whenever any corporate action other than the election of directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or represented by proxy at a meeting of stockholders and entitled to vote on the subject matter. Section 7. Manner of Voting; Proxies . (a) At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Each stockholder shall be entitled to vote each share of stock having voting power and registered in such stockholder's name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting. (b) Each person entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after eleven months from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute valid means by which a stockholder may grant such authority:
	(1) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or the stockholder's authorized officer, director, employee, or agent signing such writing or causing such person's signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; and (2) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person or persons who will be the holder of the proxy or to an agent of the proxyholder(s) duly authorized by such proxyholder(s) to receive such transmission; provided , however , that any such telegram, cablegram, or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram, or other electronic transmission was authorized by the stockholder. If it is determined that any such telegram, cablegram, or other electronic transmission is valid, the inspectors or, if there are no inspectors, such other persons making that determination, shall specify the information upon which they relied.
Any copy, facsimile telecommunication, or other reliable reproduction of a writing or electronic transmission authorizing a person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or electronic transmission for any and all purposes for which the original writing or electronic transmission could be used; provided , however , that such copy, facsimile telecommunication, or other reproduction shall be a complete reproduction of the entire original writing or electronic transmission. Section 8. Stockholder Action Without a Meeting . (a) Except as otherwise provided by law or by the Certificate of Incorporation, any action required to be taken at any meeting of stockholders of the Corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing setting forth the action so taken, shall be signed by the holders of all of the outstanding stock and shall be delivered to the Secretary of the Corporation; provided , however , that such delivery shall be by hand or by certified mail, return receipt requested. (b) A telegram, cablegram, or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed, and dated for the purposes of these Bylaws, provided that any such telegram, cablegram, or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (A) that the telegram, cablegram, or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (B) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram, or electronic transmission. Any consent by means of telegram, cablegram, or other electronic transmission shall be deemed to have been signed on the date on which such telegram, cablegram, or electronic transmission was transmitted. No consent given by telegram, cablegram, or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the Secretary of the Corporation. Delivery made to the Secretary of the Corporation shall be made by hand or by certified or registered mail, return receipt requested. (c) Any copy, facsimile, or other reliable reproduction of a consent in writing (or reproduction in paper form of a consent by telegram, cablegram, or electronic transmission) may be substituted or used in lieu of the original writing (or original reproduction in paper form of a consent by telegram, cablegram, or electronic transmission) for any and all purposes for which the original consent could be used, provided that such copy, facsimile, or other reproduction shall be a complete reproduction of the entire original writing (or original reproduction in paper form of a consent by telegram, cablegram, or electronic transmission). (d) In order to determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directions. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be the date on which the first Stockholder signs such written consent.
ARTICLE III DIRECTORS
Section 1. Number . The number of directors that shall constitute the whole Board of Directors initially shall be one (1), and thereafter shall be such number of directors to be determined from time to time by resolution adopted by the Board of Directors. Section 2. Powers . The Board of Directors shall exercise all of the powers of the Corporation except such as are by applicable law, by the Certificate of Incorporation of this Corporation, or by these Bylaws conferred upon or reserved to the stockholders of any class or classes or series thereof. Section 3. Resignations and Removal . (a) Any director may resign at any time by giving written notice to the Board of Directors or the Secretary; provided , however , that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective. (b) Except as otherwise may be provided in the Certificate of Incorporation, any director or the entire Board of Directors may be removed with or without cause, by the holders of capital stock having a majority in voting power of the shares entitled to vote in the election of directors. Section 4. Regular Meetings . Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the State of Delaware and within or without the Commonwealth of Virginia, as shall from time to time be determined by the Board of Directors, such determination to constitute the only notice of such regular meetings to which any director shall be entitled. In the absence of any such determination, such meetings shall be held, upon notice to each director in accordance with Section 7 of this Article III, at such times and places, within or without the State of Delaware and within or without the Commonwealth of Virginia, as shall be designated by the Chairman of the Board. Section 5. Special Meetings . Special meetings of the Board of Directors shall be held at the call of the Chairman of the Board at such times and places, within or without the State of Delaware and within or without the Commonwealth of Virginia, as he or she shall designate, upon notice to each director in accordance with Section 7 of this Article III. Special meetings shall be called by the Secretary on like notice at the written request of a majority of the directors then in office. Section 6. Notice . Notice of any regular (if required) or special meeting of the Board of Directors may be given verbally in person, verbally by telephone (including by leaving verbal notice on a message or recording device), or in writing. If in writing, notice shall be delivered personally, by mail, by facsimile transmission (directed to the facsimile transmission number for which the director has consented to receive notice), by telegram, by electronic mail (directed to such electronic mail address to which the director has consented to receive notice), or by other form of electronic transmission pursuant to which the director has consented to receive notice. If notice is given verbally in person, verbally by telephone, or in writing by personal delivery, by facsimile transmission, by telegram, by electronic mail, or by other form of electronic transmission pursuant to which the director has consented to receive notice, then such notice shall be given on not less than twenty-four hours' notice to each director. If written notice is delivered by mail, then it shall be given on not less than three (3) calendar days' notice to each director. Section 7. Waiver of Notice . Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing, whether before or after such meeting is held, or if he or she shall sign the minutes or attend the meeting, except that if such director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such director shall not be deemed to have waived notice of such meeting. Section 8. Quorum and Powers of a Majority . At all meetings of the Board of Directors and of each committee thereof, a majority of the members of the Board of Directors or of such committee shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting of the Board of Directors or a committee thereof at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of law, of the Certificate of Incorporation, or of these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present. Section 9. Manner of Acting . (a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. (b) Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee; provided however , that such electronic transmission or transmissions must either set forth or be submitted with information from which it can be determined that the electronic transmission or transmissions were authorized by the director. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Section 10. Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more directors, which to the extent provided in said resolution or resolutions shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, except as otherwise provided by the General Corporation Law of the State of Delaware or the Stock Corporation Act of the Commonwealth of Virginia. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of such absent or disqualified director. Section 11. Committee Procedure, Limitations of Committee Powers . (a) Except as otherwise provided by these Bylaws, each committee shall adopt its own rules governing the time, place, and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 6 of this Article III with respect to notices of meetings of the Board of Directors. (b) Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required. (c) Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee shall be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee. Section 12. Vacancies and Newly-Created Directorships . Unless otherwise provided in the Certificate of Incorporation or in these Bylaws, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Unless otherwise provided in the Certificate of Incorporation or these Bylaws, when one or more directors shall resign from the Board, effective at a future date, a majority of directors then in office, including those who have resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective. Section 13. Compensation . (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors. (b) Each director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof. (c) Nothing contained in these Bylaws shall be construed to preclude any director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.
ARTICLE IV OFFICERS
Section 1. Number . The officers of the Corporation shall include a President, one or more Vice Presidents (including one or more Executive Vice Presidents and one or more Senior Vice Presidents if deemed appropriate by the Board of Directors), a Secretary, and a Treasurer. The Board of Directors also may elect such other officers as the Board of Directors may from time to time deem appropriate or necessary. Section 2. Election of Officers, Term, and Qualifications . The officers of the Corporation shall be elected from time to time by the Board of Directors and, except as may otherwise be expressly provided in a contract of employment duly authorized by the Board of Directors, shall hold office at the pleasure of the Board of Directors. Except for the Chairman of the Board and the Vice Chairman of the Board, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the General Corporation Law of the State of Delaware and the Stock Corporation Act of the Commonwealth of Virginia. Section 3. Removal . Any officer elected by the Board of Directors may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the Chairman of the Board, by the Chairman of the Board. Section 4. Resignations . Any officer of the Corporation may resign at any time by giving notice to the Board of Directors or to the Chairman of the Board. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5. Salaries . The salaries of all officers of the Corporation shall be fixed by the Board of Directors from time to time, and no officer shall be prevented from receiving such salary by reason of the fact that he or she also is a director of the Corporation. Section 6. Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction and management of affairs and business of the Corporation usually vested in the chief executive officer of a corporation, including, without limitation, all powers necessary to direct and control the organizational reporting relationships within the Corporation. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. If at any time the offices of the Chairman of the Board and the Vice Chairman of the Board shall not be filled, or in the event of the temporary absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall have the powers and duties of the Chairman of the Board. Section 7. The President . The President shall serve as the chief operating officer of the Corporation. The President shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties customarily and usually associated with the office of the President and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer. Section 8. The Vice Presidents . Each Vice President if any shall be elected, shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors or the President. Section 9. The Secretary and Assistant Secretaries . (a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. The Secretary shall have all such further powers and duties as are customarily and usually associated with the position of Secretary or as may from time to time be assigned to him or her by the Board of Directors or the President. (b) Each Assistant Secretary shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the President, or the Secretary. In the case of absence or disability of the Secretary, the Assistant Secretary designated by the President (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary. Section 10. The Treasurer and Assistant Treasurers . (a) The Treasurer shall have custody of the Corporation's funds and securities, shall be responsible for maintaining the Corporation's accounting records and statements, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer also shall maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall assure that adequate audits thereof are currently and regularly made. The Treasurer shall have all such further powers and duties as are customarily and usually associated with the position of Treasurer or as may from time to time be assigned to him or her by the Board of Directors or the President. (b) Each Assistant Treasurer shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors or the Treasurer. In the case of absence or disability of the Treasurer, the Assistant Treasurer designated by the President (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.
ARTICLE V STOCK
Section 1. Certificates . The shares of capital stock of the Corporation shall be represented by certificates, unless the Board of Directors provides by resolution or resolutions that some or all of the shares of any class or classes, or series thereof, of the Corporation's capital stock shall be uncertificated. Notwithstanding the adoption of any such resolution or resolutions by the Board of Directors providing for uncertificated shares, to the extent required by law, every holder of capital stock of the Corporation represented by certificates, and upon request, every holder of uncertificated shares, shall be entitled to a certificate representing such shares. Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder's name and the number of shares evidenced thereby, and shall be signed by the Chairman of the Board or a Vice Chairman, if any, or the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. If any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue. Section 2. Transfers . Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer; provided , however , that such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law, or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books. Section 3. Lost, Stolen, or Destroyed Certificates . Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed. Section 4. Registered Stockholders . The names and addresses of the holders of record of the shares of each class and series of the Corporation's capital stock, together with the number of shares of each class and series held by each record holder and the date of issue of such shares, shall be entered on the books of the Corporation. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of capital stock of the Corporation as the person entitled to exercise the rights of a stockholder, including, without limitation, the right to vote in person or by proxy at any meeting of the stockholders of the Corporation. The Corporation shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the General Corporation Law of the State of Delaware and the Stock Corporation Act of the Commonwealth of Virginia. Section 5. Additional Powers of the Board . (a) In addition to those powers set forth in Section 2 of Article III, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock, subject to the provisions of the General Corporation Law of the State of Delaware and the Stock Corporation Act of the Commonwealth of Virginia, the Certificate of Incorporation, and these Bylaws. (b) The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.
ARTICLE VI INDEMNIFICATION
Section 1. Indemnification . (a) The Corporation shall indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter, a "Proceeding"), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of Corporation as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan (collectively, "Another Enterprise"). (b) The Corporation may indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of Another Enterprise. Section 2. Advancement of Expenses . (a) With respect to any person made or threatened to be made a party to any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of Another Enterprise, the Corporation shall pay the expenses (including attorneys' fees) incurred by such person in defending any such Proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided , however , that any advancement of expenses shall be made only upon (i) receipt of a written statement from such person of his or her good faith belief that he or she has met the standard of conduct under applicable law, (ii) receipt of an undertaking (hereinafter an "undertaking") by such person to repay all amounts advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "Final Adjudication") that such person is not entitled to be indemnified for such expenses under this Article VI or otherwise and (iii) a determination that the facts known to those making the determination would not preclude indemnification under applicable law. The determination referred to in clause (iii) shall be made in accordance with applicable law. Anything herein to the contrary notwithstanding, with respect to a Proceeding (or part thereof) initiated against the Corporation by a director or officer of the Corporation (or by a person serving at the request of the Corporation as a director or officer of Another Enterprise), the Corporation shall not be required to indemnify or to pay the expenses (including attorneys' fees) incurred by such person in prosecuting such Proceeding (or part thereof) or in defending any counterclaim, cross-claim, affirmative defense, or like claim of the Corporation in connection with such Proceeding (or part thereof) in advance of the final disposition of such Proceeding (or part thereof) unless such Proceeding was authorized by the Board of Directors of the Corporation. (b) With respect to any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as an employee or agent of Another Enterprise, the Corporation may, in its discretion and upon such terms and conditions, if any, as the Corporation deems appropriate, pay the expenses (including attorneys' fees) incurred by such person in defending any such Proceeding in advance of its final disposition. Section 3. Contract Rights . With respect to any person made or threatened to be made a party to any Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of Another Enterprise, the rights to indemnification and to the advancement of expenses conferred in Sections 1(a) and 2(a) of this Article VI shall be contract rights. Section 4. Claims . (a) If (X) a claim under Section 1(a) of this Article VI with respect to any right to indemnification is not paid in full by the Corporation within sixty days after a written demand has been received by the Corporation or (Y) a claim under Section 2(a) of this Article VI with respect to any right to the advancement of expenses is not paid in full by the Corporation within twenty days after a written demand has been received by the Corporation, then the person seeking to enforce a right to indemnification or to an advancement of expenses, as the case may be, may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. (b) If successful in whole or in part in any suit brought pursuant to Section 4(a) of this Article VI, or in a suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the person seeking to enforce a right to indemnification or an advancement of expenses hereunder or the person from whom the Corporation sought to recover an advancement of expenses, as the case may be, shall be entitled to be paid by the Corporation the reasonable expenses (including attorneys' fees) of prosecuting or defending such suit. (c) In any suit brought by a person seeking to enforce a right to indemnification hereunder (but not a suit brought by a person seeking to enforce a right to an advancement of expenses hereunder), it shall be a defense that the person seeking to enforce a right to indemnification has not met any applicable standard for indemnification under applicable law. With respect to any suit brought by a person seeking to enforce a right to indemnification or right to advancement of expenses hereunder or any suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), neither (i) the failure of the Corporation to have made a determination prior to commencement of such suit that indemnification of such person is proper in the circumstances because such person has met the applicable standards of conduct under applicable law, nor (ii) an actual determination by the Corporation that such person has not met such applicable standards of conduct, shall create a presumption that such person has not met the applicable standards of conduct or, in a case brought by such person seeking to enforce a right to indemnification, be a defense to such suit. (d) In any suit brought by a person seeking to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the burden shall be on the Corporation to prove that the person seeking to enforce a right to indemnification or to an advancement of expenses or the person from whom the Corporation seeks to recover an advancement of expenses is not entitled to be indemnified, or to such an advancement of expenses, under this Article VI or otherwise. Section 5. Non-Exclusive Rights . The indemnification and advancement of expenses provided in this Article VI shall not be deemed exclusive of any other rights to which any person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person. Section 6. Insurance . The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI or otherwise.
ARTICLE VII MISCELLANEOUS
Section 1. Books and Records . (a) Any books or records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method; provided , however , that the books and records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any books or records so kept upon the request of any person entitled to inspect such records pursuant to the Certificate of Incorporation, these Bylaws, or the provisions of the General Corporation Law of the State of Delaware and the Stock Corporation Act of the Commonwealth of Virginia. (b) It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of the stock ledger to prepare and make, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the stockholder's name. Nothing contained in this subsection (b) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine such list. (c) Except to the extent otherwise required by law, or by the Certificate of Incorporation, or by these Bylaws, the Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the stock ledger, books, records, and accounts of the Corporation, or any of them, shall be open to inspection by the stockholders and the stockholders' rights, if any, in respect thereof. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine the stock ledger, the books, records, or accounts of the Corporation. Section 2. Voting Shares in Other Business Entities . The President or any other officer of the Corporation designated by the Board of Directors may vote any and all shares of stock or other equity interest held by the Corporation in any other corporation or other business entity, and may exercise on behalf of the Corporation any and all rights and powers incident to the ownership of such stock or other equity interest. Section 3. Record Date for Distributions and Other Actions . In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution, or allotment of any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of capital stock, or for the purpose of any other lawful action, except as may otherwise be provided in these Bylaws, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing such record date is adopted, and shall not be more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto. Section 4. Fiscal Year . The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine. Section 5. Electronic Transmission . For purposes of these Bylaws, "electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process. Section 6. Amendment . These Bylaws may be altered, amended, or repealed at any meeting of the Board of Directors, or at any meeting of the stockholders of the Corporation. END OF BYLAWS

[SEAL APPEARS HERE] SCC607/807 COMMONWEALTH OF VIRGINIA (10/01) STATE CORPORATION COMMISSION
GUIDE FOR ARTICLES OF CORRECTION ARTICLES OF CORRECTION OF Delmarva Power & Light Corporation
The undersigned corporation, as authorized by its Board of Directors and pursuant to Section 13.1-607 (if a stock corporation) of the Code of Virginia, hereby executes the following articles and sets forth:
ONE
The name of the corporation is Delmarva Power & Light Corporation.
TWO
The articles to be corrected are the Restated Certificate and Articles of Incorporation, which became effective on August 8, 2002
THREE
The aforesaid articles contain the following incorrect statement, The name of this Corporation is "DELMARVA POWER & LIGHT CORPORATION". This incorrect statement is found in the Article First of the articles, and is corrected by inserting in lieu of such statement the following: The name of this Corporation is "DELMARVA POWER & LIGHT COMPANY" The undersigned Joseph M. Rigby declares that the facts herein stated are true as of August 16, 2002.
	Delmarva Power & Light Company By: /s/ Joseph M. Rigby Name: Joseph M. Rigby Title: President

CORRECTED RESTATED CERTIFICATE AND ARTICLES OF INCORPORATION OF DELMARVA POWER & LIGHT CORPORATION
This Corrected Restated Certificate and Articles of Incorporation, duly adopted by the Board of Directors in accordance with Section 242 and Section 245 of the Delaware General Corporation Law ("DGCL"), restates and integrates the Restated Certificate and Articles of Delmarva Power & Light Corporation (the "Certificate") attached hereto as Exhibit A, as amended subsequent to original filing with the Secretary of State on August 8, 2002, and, in accordance with Section 103 of the DGCL, corrects the name of the Company as stated in the Article First of the Certificate from Corporation to Company: See attached Restated Certificate and Articles of Incorporation - -Exhibit A
Exhibit A
RESTATED CERTIFICATE AND ARTICLES OF INCORPORATION OF DELMARVA POWER & LIGHT COMPANY (a Delaware and Virginia corporation)
The present name of the corporation is DELMARVA POWER & LIGHT COMPANY. The corporation was originally incorporated under the name AMERICAN POWER COMPANY by the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware on April 22, 1909. This Restated Certificate and Articles of Incorporation of the corporation, which both restates and further amends the provisions of the corporation's Certificate and Articles of Incorporation, as amended, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware and Sections 13.1-707 and 13.1-711 of the Stock Corporation Act of the Commonwealth of Virginia. And further, this Restated Certificate and Articles of Incorporation has been approved by the written consent of the stockholders of the Corporation in accordance with Section 228 of the General Corporation Law of the State of Delaware and Section 13.1-657 of the Stock Corporation Act of the Commonwealth of Virginia. The Certificate and Articles of Incorporation of the corporation is hereby amended and restated to read in its entirety as follows: FIRST : The name of this Corporation is "DELMARVA POWER & LIGHT COMPANY" (the "Corporation"). SECOND : The address of the Corporation's registered office in the State of Delaware is 800 King Street in the City of Wilmington, County of New Castle, 19801. The name of its registered agent at such address is PHI Service Company c/o Legal Department. THIRD : The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. In limitation of the foregoing, the Company shall, in Virginia, conduct the business of an electric utility as a public service company, and it shall have power to conduct, in Virginia, other public service business or non-public service business so far as may be related to or incidental to its stated business as a public service company and in any other state such business as may be authorized or permitted by the laws thereof. Nothing in this paragraph shall limit the power of the Company in respect of the securities of other corporations. FOURTH : The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is fifteen million eight hundred thousand (15,800,000) shares, of which one million eight hundred thousand (1,800,000) shares, the par value of One Hundred Dollars ($100) per share, shall be designated Preferred Stock; three million (3,000,000) shares, par value of Twenty-Five Dollars ($25) per share, shall be designated Preferred Stock -- $25 Par; ten million (10,000,000) shares, par value of One Dollar ($1) per share, shall be designated Preferred Stock - $1.00 Par, and one million (1,000,000) shares, par value of Two Dollars and Twenty Five Cents ($2.25) per share, shall be designated Common Stock. A. A statement of the designations and of the powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, and of the powers conferred upon the Board of Directors with respect to the creation of series of the Preferred Stock and Preferred Stock - $25 Par and of the limitation of variation between such series, is as follows: 1. The shares of the Preferred Stock and Preferred Stock - $25 Par may be divided into and issued in series, from time to time, as herein provided. Each series shall be designated so as to distinguish the shares thereof from the shares of all other series. All shares of the Preferred Stock of all series shall constitute one and the same class of stock and shall be of equal rank, and all shares of any particular series of the Preferred Stock shall be identical except as provided hereinafter. All shares of the Preferred Stock - $25 Par of all series shall constitute one and the same class of stock and shall be of equal rank, and all shares of any particular series of the Preferred Stock - $25 Par shall be identical except as provided hereinafter. Irrespective of the foregoing, the shares of the Preferred Stock and Preferred Stock - $25 Par of different series or within a particular series, subject to any applicable provision of law, may vary as to the following terms, which shall be specified in the case of each such series at any time prior to the issuance of the shares thereof, in the manner provided in paragraph A.8 hereof: (a) The dividend rate or rates and the dividend payment date or dates for the particular series, which may vary between shares and which may be expressed as formulae or other methods by which such terms shall be determined from time to time, and the date or dates from which dividends for each share of such series shall be cumulative; (b) The redemption price or prices, which may be expressed as formulae or other methods by which such price or prices shall be determined from time to time, and the terms and conditions of redemption, if any, for the particular series; (c) The amount or amounts per share for the particular series, payable to the holders thereof upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, which may be different for voluntary and involuntary liquidation, dissolution or winding up; (d) The terms and amount of any sinking fund provided for the purchase or redemption of shares of the particular series; and (e) The conversion, participating or special rights, and the qualifications, limitations or restrictions thereof, if any, of the particular series. Each share of the Common Stock shall be equal in all respects to every other share of the Common Stock. 2. The designations and separate terms of the seven separate series of the Preferred Stock and one Separate Series of Preferred Stock - $25 Par, authorized, issued and outstanding as of the date of this Restated Certificate and Articles of Incorporation are as follows: (a) 4% Preferred Stock Authorized October 23, 1943 (1) The Corporation has established $4,000,000 par value of the authorized Preferred Stock which shall be designated as "4% Preferred Stock", consisting initially of 40,000 shares of the par value of $100 per share. (2) The terms of the "4% Preferred Stock", in the respects in which the shares of such series may vary from shares of other series of the Preferred Stock, shall be as follows: the dividend rate shall be 4% per annum, and October 1, 1943 shall be the date from which dividends shall be cumulative on all shares issued prior to the record date for the dividend payable December 31, 1943; dividends shall be payable quarter-yearly on the last days March, June, September, and December, and redemption price shall be $107 per share as to any shares redeemed on or prior to September 30, 1948, $106 per share as to any shares redeemed thereafter and on or before September 30, 1953, and $105 per share as to any shares redeemed on and after October 1, 1953; the amount per share payable in the event of any voluntary liquidation, dissolution or winding up shall be the amount per share at which such share could at the time be redeemed, and in the event of any involuntary liquidation, dissolution or winding up shall be $100. (b) 3.70% Preferred Stock Authorized March 24, 1947 (1) The Corporation has established $5,000,000 par value of the authorized Preferred Stock as a series of such Preferred Stock which shall be designated as "3.70% Preferred Stock", consisting initially of 50,000 shares of the par value of $100 per share. (2) The terms of the "3.70% Preferred Stock", in the respects in which the shares of such series may vary from shares of other series of the Preferred Stock, shall be as follows: the dividend rate shall be 3.70% per annum, and April 1, 1947, shall be the date from which dividends shall be cumulative on all shares issued prior to the record date for the dividend payable June 30, 1947; dividends shall be payable quarter-yearly on the last days of March, June, September and December, and redemption price shall be $106 per share as to any shares redeemed on or prior to March 31, 1952, $105 per share as to any shares redeemed thereafter and on or before March 31, 1957, and $104 per share as to any shares redeemed on and after April 1, 1957; the amount per share payable in the event of any voluntary liquidation, dissolution or winding up shall be the amount per share at which such share could at the time be redeemed, and in the event of any involuntary liquidation, dissolution or winding up shall be $100. (c) 4.28% Preferred Stock Authorized July 6, 1949 (1) The Corporation has established $5,000,000 par value of the authorized Preferred Stock as a series of such Preferred Stock which shall be designated as "4.28% Preferred Stock", consisting initially of 50,000 shares of the par value of $100 per share. (2) The terms of the "4.28% Preferred Stock", in the respects in which the shares of such series may vary from shares of other series of the Preferred Stock shall be as follows: the dividend rate shall be 4.28% per annum, and June 30, 1949 shall be the date from which dividends shall be cumulative on all shares issued prior to the record date for the dividend payable September 30, 1949; dividends shall be payable quarter-yearly on the last days of March, June, September and December, the redemption price shall be $106 per share as to any shares redeemed on or prior to June 30, 1954, $105 per share as to any shares redeemed thereafter and on or before June 30, 1959, and $104 per share as to any shares redeemed on and after July 1, 1959; the amount per share payable in the event of any voluntary liquidation, dissolution or winding up shall be the amount per share at which such share could at the time be redeemed, and in the event of any involuntary liquidation, dissolution or winding up shall be $100. (d) 4.56% Preferred Stock Authorized February 26, 1952 (1) The Corporation has established $5,000,000 par value of the authorized Preferred Stock as a series of such Preferred Stock which shall be designated as "4.56% Preferred Stock", consisting initially of 50,000 shares of the par value of $100 per share. (2) The terms of the "4.56% Preferred Stock", in the respects in which the shares of such series may vary from shares of other series of the Preferred Stock shall be as follows: the dividend rate shall be 4.56% per annum, and March 1, 1952 shall be the date from which dividends shall be cumulative on all shares issued prior to the record date for the dividend payable March 31, 1952; dividends shall be payable quarter-yearly on the last days of March, June, September and December, the redemption price shall be $107 per share as to any shares redeemed on or prior to December 31, 1956, $106 per share as to any shares redeemed thereafter and on or prior to December 31, 1961, and $105 per share as to any shares redeemed on or after January 1, 1962; the amount per share payable in the event of any voluntary liquidation, dissolution or winding up shall be the amount per share at which such share could at the time be redeemed, and in the event of any involuntary liquidation, dissolution or winding up shall be $100. (e) 4.20% Preferred Stock Authorized December 13, 1955 (1) The Corporation has established $5,000,000 per value of the authorized Preferred Stock as a series of such Preferred Stock which shall be designated as "4.20% Preferred Stock", consisting initially of 50,000 shares of the par value of $100 per share. (2) The terms of the "4.20% Preferred Stock", in the respects in which the shares of such series may vary from shares of other series of the Preferred Stock shall be as follows: the dividend rate shall be 4.20% per annum, and December 20, 1955 shall be the date from which dividends shall be cumulative on all shares issued prior to the record date for the dividend payable December 31, 1955; dividends shall be payable quarter-yearly on the last days of March, June, September and December, the redemption price shall be $106 per share as to any shares redeemed on or prior to December 31, 1960, $105 per share as to any shares redeemed thereafter and on or prior to December 31, 1965, $104 per share as to any shares redeemed thereafter and on or prior to December 31, 1970, and $103 per share as to any shares redeemed on or after January 1, 1971; the amount per share payable in the event of any voluntary liquidation, dissolution or winding up shall be the amount per share at which such share could at the time be redeemed; and in the event of any involuntary liquidation, dissolution or winding up shall be $100. (f) 5% Preferred Stock Authorized December 11, 1956 (1) The Corporation has established $8,000,000 par value of the authorized Preferred Stock as a series of such Preferred Stock which shall be designated as "5% Preferred Stock", consisting initially of 80,000 shares of the par value of $100 per share. (2) The terms of the "5% Preferred Stock", in the respects in which the shares of such series may vary from shares of other series of the Preferred Stock shall be as follows: the dividend rate shall be 5% per annum, and December 18, 1956 shall be the date from which dividends shall be cumulative on all shares issued prior to the record date for the dividend payable December 31, 1956; dividends shall be payable quarter-yearly on the last days of March, June, September and December, the redemption price shall be $107 per share as to any shares redeemed on or prior to December 31, 1961, $106 per share as to any shares redeemed thereafter and on or prior to December 31, 1966, $105 per share as to any shares redeemed thereafter and on or prior to December 31, 1971, and $104 per share as to any shares redeemed on or after January 1, 1972; the amount per share payable in the event of any voluntary liquidation, dissolution or winding up shall be the amount per share at which such share could at the time be redeemed; and in the event of any involuntary liquidation, dissolution or winding up shall be $100. (g) 7-3/4% Preferred Stock (1) The shares of such series of Preferred Stock - $25 Par shall be designated as "7-3/4% Preferred Stock - $25 Par," consisting initially of 1,600,000 shares of Preferred Stock - $25, par value $25 per share; and (2) The dividend rate shall be 7-3/4% per annum on the par value thereof, and August 4, 1992 shall be the date from which dividends shall be cumulative on all shares issued on or prior to the record date for the dividend payable September 30, 1992; and (3) Dividends shall be payable quarter-yearly on the last days of March, June, September and December; and (4) The 7-3/4% Preferred Stock--$25 Par will not be redeemable prior to September 30, 2002, but will be redeemable, in whole or in part at the option of the Corporation, on any dividend payment date on or after September 30, 2002, at $25 per share, together with dividends accumulated and unpaid to the redemption date; and (5) The amount per share payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation shall be $25.00 per share; and (6) In the case of the redemption of a part only of the 7-3/4% Preferred Stock--$25 Par, the Corporation shall select by lot the shares so to be redeemed. (h) 6-3/4% Preferred Stock (1) The shares of such series of Preferred Stock shall be designated as "6-3/4% Preferred Stock," consisting initially of 200,000 shares of Preferred Stock, par value $100 per share; and (2) The dividend rate shall be 6-3/4% per annum on the par value thereof, and November 4, 1993, shall be the date from which dividends shall be cumulative on all shares issued on or prior to the record date for the dividend payable December 31, 1993; and (3) Dividends shall be payable quarter-yearly on the last days of March, June, September and December; and (4) The 6-3/4% Preferred Stock will not be redeemable prior to November 1, 2003; and (5) Beginning on November 1, 2003, the 6-3/4% Preferred Stock will be redeemable at any time at the option of the Corporation in whole or in part at $100 per share, together with dividends accumulated and unpaid to the redemption date; and (6) The amount per share payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation shall be $100.00 per share; and (7) In the case of the redemption of a part only of the 6-3/4% Preferred Stock, the Corporation shall select by lot the shares so to be redeemed. 3. The holders of each series of the Preferred Stock and Preferred Stock-$25 Par at the time outstanding shall be entitled to receive, but only when and as declared by the Board of Directors, out of funds legally available for the payment of dividends, cumulative preferential dividends, at the dividend rate or rates for the particular series as may have been fixed or as may be determined in the manner specified by the Board of Directors as herein provided, payable quarter-yearly on the last days of March, June, and September and December in each year or on such other date or dates and for such other period or periods as may have been fixed or as may be determined in the manner specified by the Board of Directors, as herein provided, to stockholders of record on the respective dates, not exceeding forty (40) days preceding such dividend payment dates, fixed for such purposes by the Board of Directors. No dividend shall be declared on any share of the Preferred Stock or Preferred Stock-$25 Par in respect of any dividend period for such share unless prior to or contemporaneously with such declaration likewise there shall have been or shall be declared on all shares of all series of the Preferred Stock and the Preferred Stock-$25 Par at the time outstanding like proportionate dividends, ratably, in proportion to the respective dividend rate or rates therefor, in respect of each dividend period for which the dividend payment date shall have occurred prior to or shall occur contemporaneously with the declaration of such dividend on such share. The dividends on shares of all series of the Preferred Stock and Preferred Stock-$25 Par shall be cumulative. In the case of all shares of each particular series having fixed quarter-yearly dividend payment dates, the dividends on such share shall be cumulative;
		(a)	if issued on or prior to the record date for the first dividend on the share of such series, then from the date for the particular series fixed therefor as herein provided;
		(b)	if issued during the period commencing immediately after the record date for a dividend and terminating at the close of the payment date for such dividend, then from such dividend payment date; and
		(c)	otherwise from the quarter-yearly dividend payment date next preceding the date of issue of such shares.
Unless dividends on all outstanding shares of each series of the Preferred Stock and Preferred Stock - $25 Par, at the dividend rate or rates and from the dates for accumulation thereof fixed or determined as herein provided, shall have been paid or declared and set apart for payment for all past dividend periods, but without interest on accrued dividends, no dividends shall be paid or declared and no other distribution shall be made on the Common Stock, and no Common Stock shall be purchased or otherwise acquired for value by the Corporation. Any accumulation of dividends on the Preferred Stock and Preferred Stock-$25 Par shall not bear interest. The holders of the Preferred Stock and Preferred Stock-$25 Par of any series shall not be entitled to receive any dividends thereon other than the dividends referred to in this paragraph 3. 4. The Corporation, by action of its Board of Directors, may redeem the whole or any part of any series of the Preferred Stock or Preferred Stock-$25 Par at any time or from time to time, except as may be otherwise provided in the resolutions creating such series, at the redemption price of the shares of the particular series fixed or determined therefor as herein provided, together with a sum in the case of each share of each series so to be redeemed, computed at the dividend rate or rates for such share from the date from which dividends on such share became cumulative to the date fixed for such redemption, less the aggregate of the dividends theretofore or on such redemption date paid thereon or declared and set aside for payment thereon. Except as otherwise provided by the Board of Directors at any time prior to the issuance of any particular series of the Preferred Stock or the Preferred Stock-$25 Par, in the manner provided in paragraph A.8. hereof, (i) notice of every such redemption shall be given by publication at least once in a daily newspaper printed in the English language and published and of general circulation in the city of New York, New York, the first publication in such newspaper to be at least thirty (30) days and not more than ninety (90) days prior to the date fixed for such redemption, and (ii) at least thirty (30) days and not more than ninety (90) days previous notice of every such redemption shall also be mailed to the holders of record of the shares of the Preferred Stock or Preferred Stock-$25 Par so to be redeemed, at their respective addresses as the same shall appear on the books of the Corporation; but no failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of the Preferred Stock or Preferred Stock-$25 Par so to be redeemed. In case of the redemption of a part only of any series of the Preferred Stock or Preferred Stock-$25 Par at the time outstanding, the Corporation shall select by lot or pro rata, in such manner as the Board of Directors may determine, the shares so to be redeemed. The Board of Directors shall have full power and authority subject to the limitations and provisions herein contained, to prescribe the manner in which and the terms and conditions upon which the shares of the Preferred Stock or Preferred Stock-$25 Par shall be redeemed from time to time. If such notice of redemption shall have been duly given by publication, and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the account of the holders of the shares to be redeemed, so as to be and continue to be available therefor, then, notwithstanding that any certificate for such shares so called for redemption shall not have been surrendered for cancellation, from and after the date fixed for redemption, the shares represented thereby shall no longer be deemed outstanding, the right to receive dividends thereon shall cease to accrue and all rights with respect to such shares so called for redemption shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive, out of the funds so set aside in trust, the amount payable upon redemption thereof, without interest; provided, however, that the Corporation may, after giving notice by publication of any such redemption as hereinbefore provided or after giving to the bank or trust company hereinafter referred to irrevocable authorization to give such notice by publication, and, at any time prior to the redemption date specified in such notice, deposit in trust, for the account of the holders of the shares to be redeemed, funds necessary or such redemption with a bank or trust company in good standing, organized under the laws of the United States of America or of the State of New York or of the State of Delaware, doing business in the city of New York, New York, or in the city of Wilmington, Delaware, having capital, surplus and undivided profits aggregating at least $10,000,000, designated in such notice of redemption, and upon such deposit in trust, all shares with respect to which such deposit shall have been made shall no longer be deemed to be outstanding, and all rights with respect to such shares shall forthwith cease and terminate, except only the right of the holders thereof to receive, out of the funds so deposited in trust, from and after the date of such deposit, the amount payable upon the redemption thereof, without interest, provided further that notice of such right shall be included in the notice of redemption hereinabove provided for. If at any time the Corporation shall have failed to pay dividends in full on any outstanding shares of the Preferred Stock or Preferred Stock-$25 Par, thereafter and until dividends in full on all shares of the Preferred Stock and Preferred Stock-$25 Par outstanding shall have been paid, or declared and set aside for payment, for all past dividend periods, the Corporation shall not redeem any shares of the Preferred Stock or Preferred Stock-$25 Par unless all of the shares of the Preferred Stock and Preferred Stock-$25 Par outstanding are redeemed and shall not purchase or otherwise acquire for value any shares of the Preferred Stock or Preferred Stock-$25 Par unless such purchase or other acquisition is in accordance with an offer (which may vary as to the terms offered with respect to shares of different series of the Preferred Stock or Preferred Stock-$25 Par) made in writing or by publication (as determined by the Board of Directors) to all holders of shares of the Preferred Stock and Preferred Stock-$25 Par. All or any shares, of Preferred Stock or Preferred Stock-$25 Par at any time redeemed, purchased or acquired by the Corporation may thereafter, in the discretion of the Board of Directors, be reissued or otherwise disposed of or may be reclassified as shares of other series at any time or from time to time to the extent and in the manner now or hereafter permitted by law, subject, however, to the limitations hereinafter imposed upon the issue of shares of the Preferred Stock and Preferred Stock-$25 Par, but shares so reacquired, if so reclassified shall first be cancelled in the manner provided by law. 5. Before any amount shall be paid to, or any assets distributed among, the holders of the Common Stock upon any liquidation, dissolution or winding up of the Corporation, and after paying or providing for the payment of all creditors of the Corporation, the holders of all shares of each series of the Preferred Stock and Preferred Stock-$25 Par at the time outstanding shall be entitled to be paid in cash the amount for the shares of the particular series fixed therefor as herein provided, together with a sum in the case of each such share of each series, computed at the dividend rate or rates for such share, from the date from which dividends on such share became cumulative to the date fixed for the payment of such distributive amount, less than the aggregate of the dividends theretofore or on such date paid thereon or declared and set aside for payment thereon; but no payments on account of such distributive amounts shall be made to the holders of the shares of any series of the Preferred Stock or Preferred Stock-$25 Par unless there shall likewise be paid at the same time to the holders of shares of each other series of the Preferred Stock and Preferred Stock-$25 Par at the time outstanding like proportionate distributive amounts, ratably, in proportion to the full distributive amount to which they are respectively entitled as herein provided. The holders of the Preferred Stock and Preferred Stock-$25 Par of any series shall not be entitled to receive any amounts with respect thereto upon any liquidation, dissolution or winding up of the Corporation other than amounts referred to in this paragraph. Neither the consolidation or merger of the Corporation with or into any other corporation or corporations, nor the sale or transfer by the Corporation of all or any part of its assets, nor the exchange of shares of the Corporation for shares of another corporation pursuant to a plan of exchange, shall be deemed to be a liquidation, dissolution or winding up of the Corporation for the purposes of this paragraph. 6. Whenever the full dividends on the shares of all series of the Preferred Stock and Preferred Stock-$25 Par at the time outstanding for all past quarter-yearly dividend periods shall have been paid or declared and set apart for payment then such dividends (payable in cash, stock or otherwise), as may be determined by the Board of Directors may be declared and paid on the Common Stock, but only out of funds legally available for payment of such dividends. 7. In the event of any liquidation, dissolution or winding up of the Corporation, all assets and funds of the Corporation remaining after paying or providing for the payment of all creditors of the Corporation and after paying or providing for the payment to the holders of shares of all series of the Preferred Stock and Preferred Stock-$25 Par of the full distributive amounts to which they are respectively entitled, as herein provided, shall be divided among and paid to the holders of the Common Stock according to their respective shares. 8. The Board of Directors of the Corporation may, at any time or from time to time, within the then total authorized number of shares of the Preferred Stock or Preferred Stock-$25 Par of all series, increase the authorized number of shares of any series of the Preferred Stock or Preferred Stock-$25 Par or of any Preferred Stock or Preferred Stock-$25 Par which is not part of a then existing series, establish or reestablish any unissued shares of the Preferred Stock or Preferred Stock-$25 Par as shares of the Preferred Stock or Preferred Stock-$25 Par of any series or as Preferred Stock or Preferred Stock-$25 Par which is not part of a then existing series, create one or more additional series of the Preferred Stock or Preferred Stock-$25 Par, fix the authorized number of shares of any series (which number of shares shall be subject to change from time to time by like action), and fix or specify the designations and the terms of any series of the Preferred Stock or Preferred Stock-$25 Par in the respects in which the shares of any series may vary from the shares of other series or from other shares within the same series of the Preferred Stock or Preferred Stock-$25 Par as provided in paragraph A.1. hereof. Nothing in this paragraph shall authorize the Board of Directors to change in any manner the rights and preferences of any outstanding shares of Preferred Stock or Preferred Stock-$25 Par. Shares of Preferred Stock and Preferred Stock-$25 Par previously issued and reacquired shall be cancelled before issuance as shares of another series. 9. (a) So long as any shares of the Preferred Stock or Preferred Stock-$25 Par of any series are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose in accordance with the provisions of paragraph A.13. hereof) of the holders of at least two-thirds of the total voting power of the outstanding Preferred Stock and Preferred Stock-$25 Par of all series voting as a single class:
		(1) Create or authorize any kind of stock (other than a series of Preferred Stock or Preferred Stock-$25 Par) ranking prior to or on a parity with the Preferred Stock or Preferred Stock-$25 Par or create or authorize any obligation or security convertible into shares of stock of any such kind; or (2) Amend, alter, change or repeal any of the express terms of the Preferred Stock or Preferred Stock-$25 Par or of any series of the Preferred Stock or Preferred Stock-$25 Par then outstanding in a manner prejudicial to the holders thereof, provided, however, that if any such amendment, alteration, change or repeal would be prejudicial to the holders of shares of one or more, but not all, of the series of the Preferred Stock or Preferred Stock-$25 Par at the time outstanding, such consent shall be required only from the holders of two-thirds of the total voting power of outstanding shares of all series so affected; or (3) Issue any additional shares of any series of the Preferred Stock or Preferred Stock-$25 Par, unless the net earnings of the Corporation applicable to the payment of dividends on shares of the Preferred Stock and Preferred Stock-$25 Par, and unless the net earnings of the Corporation applicable to the payment of interest charges on its indebtedness, in each instance after provision for depreciation and all taxes chargeable as operating expenses and determined in accordance with generally accepted accounting principles, for any twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the calendar month within which such additional shares of stock shall be issued, shall, respectively, have been at least two (2) times the dividend requirements for such twelve (12) months' period upon the entire amount of the Preferred Stock and Preferred Stock-$25 Par to be outstanding immediately after the proposed issue of such additional shares of Preferred Stock or Preferred Stock-$25 Par and at least one and one-half (1-1/2) times the aggregate of such dividend requirements and of the interest charges for said period on the entire amount of indebtedness to be likewise outstanding; but excluding from each of the foregoing computations interest charges on all indebtedness which is to be retired through the issue of such additional shares of Preferred Stock or Preferred Stock-$25 Par; provided that, if the shares of any series of the Preferred Stock or Preferred Stock-$25 Par shall have other than a fixed dividend rate or rates, the dividend requirements for the shares of such series shall be determined by reference to the weighted average dividend rate on such shares for any twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the calendar month within which such additional shares shall be issued; and provided further that, if the shares of the series to be issued are to have other than a fixed dividend rate or rates, the dividend requirements for the shares of such series shall be determined with reference to the initial dividend rate upon the issuance of such shares; or (4) Issue any additional shares of any series of the Preferred Stock or Preferred Stock-$25 Par, unless the capital of the Corporation represented by its Common Stock together with its surplus as then stated on its books of account shall in the aggregate be at least equal to the involuntary liquidating value of the Preferred Stock or Preferred Stock-$25 Par to be outstanding immediately after the proposed issue of such additional shares of Preferred Stock or Preferred Stock-$25 Par.
(b) So long as any shares of the Preferred Stock or Preferred Stock-$25 Par of any series are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose in accordance with the provisions of paragraph A.13. hereof) of the holders of at least a majority of the total voting power of the outstanding Preferred Stock and Preferred Stock-$25 Par of all series, voting as a single class:
		(1) Increase the total authorized number of shares of the Preferred Stock or Preferred Stock-$25 Par; or (2) Merge or consolidate with or into any other corporation or sell or otherwise dispose of all or substantially all of the Corporation's assets; provided that the provisions of this subparagraph shall not apply to a purchase or other acquisition by the Corporation of franchises or assets of another corporation in any manner which does not involve a statutory merger or consolidation, or to a merger or consolidation pursuant to which none of the rights or preferences of the holders of the Preferred Stock and Preferred Stock--$25 Par will be adversely affected and the company resulting therefrom will have outstanding immediately after such merger or consolidation no additional class of stock ranking prior to or equally with the Preferred Stock or Preferred Stock--$25 Par with respect to payment of dividends or to distribution on liquidation or dissolution.
(c) So long as any shares of the Preferred Stock or Preferred Stock-$25 Par of any series are outstanding, the Corporation shall not pay any dividends on or make any other distribution to the holders of shares of its Common Stock if after giving effect to such payment or distribution the capital of the Corporation represented by its Common Stock together with its surplus as then stated on its books of account shall in the aggregate be less than the involuntary liquidating value of all shares of its then outstanding Preferred Stock and Preferred Stock-$25 Par. 10. No holder of shares of the Common Stock or of any series of the Preferred Stock or Preferred Stock-$25 Par shall be entitled as such as a matter of right to subscribe for or purchase any part of any new or additional issue of stock, or securities convertible into stock, of any class, series or kind whatsoever, whether now or hereafter authorized, and whether issued for cash, property, services, by way of dividends or otherwise. 11. (a) At all meetings of the stockholders of the Corporation the holders of shares of Common Stock shall be entitled to one vote for each share of Common Stock held by them respectively except as herein otherwise expressly provided. The holders of shares of the Preferred Stock and Preferred Stock-$25 Par shall have no right to vote and shall not be entitled to notice of any meeting of stockholders of the Corporation nor to participate in any such meeting except as herein otherwise expressly provided and except for those purposes, if any, for which said rights cannot be denied or waived under some mandatory provision of law which shall be controlling. (b) If and when dividends payable on the Preferred Stock and Preferred Stock-$25 Par shall be in default in an amount equivalent to or exceeding four (4) full quarter-yearly dividends on all shares of all series of the Preferred Stock or Preferred Stock-$25 Par then outstanding and entitled to receive quarter-yearly dividends on the last days of March, June, September and December, and until all such dividends then in default shall have been paid or declared and set apart for payment, the holders of all shares of the Preferred Stock and Preferred Stock-$25 Par, voting as one class, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors, and the holders of the Common Stock, voting separately as a class, shall be entitled to elect the remaining directors of the Corporation. The terms of office of all persons who may be directors of the Corporation at the time shall terminate upon the election of a majority of the Board of Directors by the holders of the Preferred Stock and Preferred Stock-$25 Par, whether or not the holders of the Common Stock shall then have elected the remaining directors of the Corporation. (c) If and when all dividends then in default on the shares of Preferred Stock or Preferred Stock-$25 Par then outstanding shall be paid or declared and set apart for payment (and such dividends shall be declared and paid out of any funds legally available therefore as soon as reasonably practicable), the Preferred Stock and Preferred Stock-$25 Par shall thereupon be divested of any special right with respect to the election of directors provided in subparagraph (b) hereof, the voting power of the holders of shares of Preferred Stock, Preferred Stock-$25 Par and the holders of shares of Common Stock shall revert to the status existing before the occurrence of such default; but always subject to the same provisions for vesting such special rights in the Preferred Stock and Preferred Stock-$25 Par in case of further like default or defaults in dividends thereon. Upon the termination of any such special right upon the payment or setting apart for payment of all accumulated and defaulted dividends on such Preferred Stock or Preferred Stock-$25 Par, the terms of office of all persons who may have been elected directors of the Corporation by vote of the holders of the Preferred Stock and Preferred Stock-$25 Par, as a class, pursuant to such special right shall forthwith terminate, and the resulting vacancies shall be filled by the vote of a majority of the remaining directors. (d) In case of any vacancy in the office of a director occurring among the directors elected by the holders of Preferred Stock and Preferred Stock-$25 Par, as a class, pursuant to the foregoing provisions of subparagraph (b) hereof, the remaining directors elected by the holders of Preferred Stock and Preferred Stock-$25 Par may elect, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, a successor or successors to hold office for the unexpired term of the director or directors whose place or places shall be vacant. Likewise in case of any vacancy in the office of a director occurring among the directors elected by the holders of Common Stock pursuant to the foregoing provisions of subparagraph (b) hereof, the remaining directors elected by the holders of the Common Stock may elect, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, a successor or successors to hold office for the unexpired term of the director or directors whose place or places shall be vacant. (e) Whenever under the provisions of subparagraph (b) hereof, the right shall have accrued to the holders of the Preferred Stock and Preferred Stock-$25 Par to elect directors, the Board of Directors shall within ten (10) days after delivery to the Corporation at its principal office of a request to such effect signed by any holder of Preferred Stock or Preferred Stock-$25 Par entitled to vote, call a special meeting of all stockholders to be held within forty (40) days from the delivery of such request for the purpose of electing directors. At all meetings of stockholders held for the purpose of electing directors during such times as the holders of shares of the Preferred Stock and Preferred Stock-$25 Par, voting as one class, shall have the special right to elect directors pursuant to subparagraph (b) hereof, the presence in person or by proxy of the holders of a majority of the outstanding shares of the Common Stock shall be required to constitute a quorum of such class for the election of directors, and the presence in person or by proxy of the holders of a majority of the voting power of all series of the outstanding Preferred Stock and Preferred Stock-$25 Par shall be required to constitute a quorum of such class for the election of directors; provided, however, that the absence of a quorum of the holders of stock of either such class shall not prevent the election at any such meeting or adjournment thereof of directors by the other such class if the necessary quorum of the holders of stock of such class is present in person or by proxy at such meeting; and provided further that in the absence of a quorum of the holders of stock of either such class, a majority of those holders of the stock of such class who are present in person or by proxy shall have power to adjourn the election of the directors to be elected by such class from time to time without notice other than announcement at the meeting until the requisite amount of holders of such class shall be present in person or by proxy, but such adjournment shall not be made to a date beyond the date for the mailing of notice of the next annual meeting of the Corporation or special meeting in lieu thereof. (f) Except when some mandatory provision of law shall be controlling and except as otherwise provided in clause (2) of paragraph 9 (a) hereof and, as regards the special rights of any series of the Preferred Stock or Preferred Stock-$25 Par, as provided in the resolutions creating such series, whenever shares of two or more series of the Preferred Stock or Preferred Stock-$25 Par are outstanding, no particular series of the Preferred Stock or Preferred Stock-$25 Par shall be entitled to vote as a separate series on any matter and all shares of the Preferred Stock and Preferred Stock-$25 Par of all series shall be deemed to constitute but one class for any purpose for which a vote of the stockholders of the Corporation by classes may now or hereafter be required. (g) Whenever the holders of the Preferred Stock and the Preferred Stock-$25 Par are required to consent or vote as a single class, the voting power of each share of Preferred Stock-$25 Par shall be deemed to be one-fourth the voting power of each share of Preferred Stock. 12. From time to time, and without limitation or other rights and powers of the Corporation as provided by law, the Corporation may reclassify its capital stock and may create or authorize one or more classes of kinds of stock ranking prior to or on a parity with or subordinate to the Preferred Stock or Preferred Stock-$25 Par or may increase the authorized amount of the Preferred Stock, Preferred Stock-$25 Par or of the Common Stock or of any other class of stock of the Corporation or may amend, alter, change or repeal any of the rights, privileges, terms and conditions of shares of the Preferred Stock or Preferred Stock-$25 Par or of any series thereof then outstanding or of shares of the Common Stock or of any other class of stock of the Corporation, upon the vote, given at a meeting called for that purpose in accordance with the provisions of paragraph A.13. hereof, of the holders of a majority of the shares of stock then entitled to vote thereon or upon such other vote of its stockholders then entitled to vote thereon as may be provided by law; provided that the consent of the holders of shares of the Preferred Stock and Preferred Stock-$25 par (or of any series thereof) required by the provisions of subparagraphs (a) and (b) of paragraph A.9. hereof, if any such consent to be so required, shall have been obtained; and provided further that the rights, privileges, terms and conditions of shares of the Common Stock shall not be subject to amendment, alteration, change or repeal without the consent (given in writing or by vote at a meeting called for that purpose in accordance with the provisions of paragraph A.13. hereof) of the holders of a majority of the total number of shares of the Common Stock then outstanding. 13. Notice of any meeting of stockholders of the Corporation, or of the holders of any class or series of stock, required or authorized hereunder or by law, setting forth the purpose or purposes of such meeting, shall be mailed by the Corporation, not less than ten (10) days prior to such meeting (or such longer period as may be required by governing law) to all stockholders (at their respective addresses appearing on the books of the Corporation) entitled to vote thereat of record as of a date fixed by the Board of Directors of the Corporation, not exceeding sixty (60) days in advance of such meeting, for the purpose of determining the stockholders entitled to notice of and to vote at such meeting, unless such notice shall have been waived, either before or after the holding of such meeting, by all stockholders entitled to notice thereof and to vote thereat. Any action authorized to be taken at a meeting called for that purpose in accordance with the provisions of this paragraph A.13. may be taken either at a special meeting, or at any regular or annual meeting provided that notice of such proposed action is included in the notice of such meeting. Except where some mandatory provision of law shall be controlling, no other, longer or additional notice need be given of any such meeting and all holders of shares of stock of the Corporation, by becoming such, hereby consent to the holding of any such meeting upon notice given as hereinbefore provided and thereby waive, to the full extent permitted by law, any right to require the giving of or to receive any such other, longer or additional notice. Any action required or permitted to be taken at any annual or special meeting of such stockholders may be taken without a meeting or such stockholders if a consent in writing, setting forth the actions so taken, is signed by all stockholders entitled to vote on the action and delivered to the Secretary of the Corporation. 14. So long as any shares of the Preferred Stock or Preferred Stock-$25 Par are outstanding, the payment of dividends by the Corporation on its Common Stock (other than dividends payable in Common Stock) and the making of any distribution of assets to holders of Common Stock by the purchase of shares or otherwise (each of such actions being hereinafter referred to, for the purposes of this paragraph A.14., as "payment of Common Stock dividends") shall be subject to the following limitations:
		(a) If and so long as the ratio of the aggregate of capital represented by the outstanding shares of Common Stock of the Corporation (including premiums on the Common Stock but excluding premiums of the Preferred Stock and Preferred Stock-$25 Par) plus the consolidated surplus accounts of the Corporation and its subsidiaries to the total consolidated capitalization and surplus of the Corporation and its subsidiaries at the end of a period of twelve consecutive calendar months within the fourteen calendar months immediately preceding the calendar month in which the proposed payment of Common Stock dividends is to be made (which period is hereinafter referred to, for the purposes of this paragraph A.14., as the "base period"), adjusted to reflect the proposed payment of Common Stock dividends (which ratio is hereinafter referred to, for the purposes of this paragraph A.14., as the "capitalization ratio"), is less than 20%, the payment of Common Stock dividends, including the proposed payment, during the twelve calendar months' period ending with and including the calendar month in which the proposed payment is to be made shall not exceed 50% of the consolidated net income of the Corporation and its subsidiaries applicable to the Common Stock during the base period; (b) If and so long as the capitalization ratio is 20% or more but less than 25%, the payment of Common Stock dividends, including the proposed payment, during the twelve calendar months' period ending with and including the calendar month in which the proposed payment is to be made shall not exceed 75% of the consolidated net income of the Corporation and its subsidiaries applicable to the Common Stock during the base period; and (c) Except to the extent permitted under subparagraphs (a) and (b), above, the Corporation shall not make any payment of Common Stock dividends which would reduce the capitalization ratio to less than 25%.
For the purposes of this paragraph A.14., (i) the total consolidated capitalization of the Corporation and its subsidiaries shall be deemed to consist of the aggregate of the principal amount of all outstanding indebtedness of the Corporation and its subsidiaries represented by bonds, notes or other evidences of indebtedness maturing by their terms more than one year after the date of issue thereof and the aggregate amount of stated capital or par value represented by all capital stock, including premiums on capital stock, of all classes of stock of the Corporation and its subsidiaries, but excluding indebtedness and capital stock of subsidiaries held by the Corporation, and (ii) consolidated surplus accounts (including capital or paid-in surplus) upon which capitalization ratios are computed, and consolidated net income of the Corporation and its subsidiaries shall be determined in accordance with such systems of accounting as may be prescribed by governmental authorities having jurisdiction in the premises, or in the absence thereof, in accordance with sound accounting practice. B. A statement of the powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, and of the powers conferred upon the Board of Directors with respect to the creation of series of the Preferred Stock--$1.00 Par, is as follows: 1. the designation of such class or series, the number of shares to constitute such class or series and the stated value thereof if different from the par value thereof; 2. whether the shares of such class or series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may (i) be general or limited or (ii) subject to applicable law, permit more than one vote per share; 3. the dividends, if any, payable on such class or series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any shares of stock of any other class or any other series of such class; 4. whether the shares of such class or series shall be subject to redemption by the Corporation, and, if so, the times, prices and other conditions of such redemption; 5. the amount or amounts payable upon shares of such class or series upon, and the rights of the holders of such class or series in, the voluntary or involuntary liquidation, dissolution or winding up, or upon any distribution of the assets, of the Corporation; 6. whether the shares of such class or series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof; 7. whether the shares of such class or series shall be convertible into, or exchangeable for, shares of stock of any other class or any other series of such class or any other securities (including Common Stock) and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange; 8. the limitations and restrictions, if any, to be effective while any shares of such class or series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Corporation of the Common Stock or shares of stock of any other class or any other series of such class; 9. the conditions or restrictions, if any, upon the creation of indebtedness of the Corporation or upon the issue of any additional shares of such series or of any other series of such class or of any other class; 10. the ranking (be it pari passu , junior or senior) of such class or series vis-à-vis any other series of such class or preferred stock or of any other class of preferred stock as to the payments of dividends, the distribution of assets and all other matters except that the Preferred Stock - $1.00 Par shall rank junior to the Corporation's Preferred Stock and Preferred Stock-$25 Par on all such matters; and 11. any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof, insofar as they are not inconsistent with the provisions of this Certificate and Articles to the full extent permitted in accordance with the laws of the State of Delaware and the Commonwealth of Virginia. The powers, preferences and relative, participating, option and other special rights of each series of the Preferred Stock-$1.00 Par, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other classes or series at any time outstanding. Notwithstanding any provisions of this Article, no holder of Preferred Stock-$1.00 Par shall as such holder have any preemptive or preferential right to purchase or subscribe to, (i) any shares of any class of stock of the Corporation, whether now or hereafter authorized, (ii) any warrants, rights or options to purchase any such stock, or (iii) any obligations convertible into any such stock or into warrants, rights or options to purchase any such stock. FIFTH : In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware and the Commonwealth of Virginia, the Board of Directors is expressly authorized to make, alter and repeal the by-laws of the Corporation, subject to the power of the stockholders of the Corporation to alter or repeal any by-law whether adopted by them or otherwise. SIXTH : No director of the Corporation shall be personally liable to the Corporation for monetary damages for breach of fiduciary duty by such director, provided, however, that this Article SIXTH shall not eliminate or limit the liability of a director to the extent provided by law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal. SEVENTH : Unless and except to the extent that the by-laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. EIGHTH : The Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Restated Certificate and Articles of Incorporation, and other provisions authorized by the laws of the State of Delaware and the Commonwealth of Virginia at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Restated Certificate and Articles of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this article. IN WITNESS WHEREOF, DELMARVA POWER & LIGHT COMPANY has caused this Restated Certificate and Articles of Incorporation to be executed by Thomas S. Shaw, its Chief Executive Officer, as of the 16th day of August, 2002.
	DELMARVA POWER & LIGHT COMPANY By: /s/ Thomas S. Shaw Name: Thomas S. Shaw Title: Chief Executive Officer

STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 11/14/2000 001571563 - 3316467
CERTFICATE OF INCORPORATION OF EDISON CAPITAL RESERVES CORPORATION
FIRST : The name of the Corporation is Edison Capital Reserves Corporation (the "Corporation"). SECOND: The registered office of the Corporation in the State of Delaware is located at 300 Delaware Ave., 9th F1oor-DE 5403. Wilmington. County of New Castle, Delaware 19801. The registered agent of the Corporation at that address is Griffin Corporate Services Inc. THIRD : The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware; provided that the Corporation's activities shall be confined to the management and maintenance of its intangible investments and the collection and distribution of the income from such investments or from tangible property physically located outside Delaware, all as defined in. and in such manner as to qualify for exemption from income taxation under Section 1902(b) (8) of Title 30 of the Delaware Code, or under the corresponding provision of any subsequent law. FOURTH: The Corporation shall have authority to issue 100 (one hundred) shares of common stock, having a par value of $0.01 (one cent) per share. FIFTH: The Corporation shall indemnify its officers, directors, employees and agents to the full extent permitted by section 145 of the Delaware General Corporation Law, as amended from time to time, or any successor provision of Delaware law. SIXTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders except for (i) any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) unlawfu1 dividend payments or stock purchases or redemptions under section 174 of the Delaware General Corporation Law (or any successor provision of Delaware law), or (iv) any transaction from which the director derived an improper personal benefit; and the directors of the Corporation shall be entitled to the full extent permitted by Delaware law, as amended from time to time, to the benefits of provisions limiting the personal liability of directors. SEVENTH: The business and affairs of the Corporation shall be managed by or under the direction of the board of directors, the number of members of which shall be set forth in the By-Laws of the Corporation. The directors need not be elected by ballot unless required by the By-Laws of the Corporation. EIGHTH: Meetings of the stockholders will be held within the State of Delaware. The books of the Corporation will be kept (subject to the provisions contained in the General Corporation Law) in the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the By-Laws of the Corporation. NINTH : In the furtherance and not in limitation of the objects, purposes and powers prescribed herein and conferred by the laws of the State of Delaware, the board of directors is expressly authorized to make, amend and repeal the By-Laws. TENTH: The Corporation reserves the right to amend or repeal any provision contained in the Certificate of Incorporation in the manner now or hereinafter prescribed by the laws of the State of Delaware. All rights herein conferred are granted subject to this reservation. ELEVENTH: The Corporation shall have no power and may not be authorized by its stockholders or directors (i) to perform or omit to do any act that would cause the Corporation to lose its status as a corporation exempt from the Delaware Corporation income tax under Section 1902 (b) (8) of Title 30 of the Delaware Code, or under the corresponding provision of any subsequent law, or (ii) to conduct any activities outside of Delaware which could result in the Corporation being subject to of outside of Delaware. TWELFTH: The name and mailing address of the incorporator is Kimberlee A. Poteet, 300 Delaware Avenue, 9th Floor - DE 5403, Wilmington Delaware 19801. THIRTEENTH : The powers of the incorporator shall terminate upon election of directors. I, THE UNDERSIGNED, being the incorporator hereinbefore named for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, by declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 14th day of November, 2000.
	/s/ Kimberlee A. Poteet Kimberlee A. Poteet Incorporator

EDISON CAPITAL RESERVES CORPORATION BY-LAWS ARTICLE I STOCKHOLDERS
Section 1. Annual Meeting. An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place within the State of Delaware, on such date, and at such time as the Board of Directors shall each year fix, which date shall be within thirteen (13) months subsequent to the later of the date of incorporation or the last preceding annual meeting of stockholders. Section 2. Special Meetings. Special meetings of the stockholders, for any purpose or purposes prescribed in the notice of the meeting, may be called by the Board of Directors or the chief executive officer and shall be held at such place within the State of Delaware, on such date, and at such time as they or he or she shall fix. Section 3. Notice of Meetings. Written notice of the place, date, and time of all meetings of the stockholders shall be given, not less than ten (10) nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or in the Certificate of Incorporation of the Corporation or as otherwise required by law. When a meeting is adjourned to another place, date, or time, written notice need not be given of the adjourned meeting if the place, date, and time thereof are announced at the meeting at, which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting. Section 4. Quorum. At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Where a separate vote by a class or classes is required, a majority of the shares of such class or classes present in person or represented by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter. If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time. Section 5. Organization. The Chief Executive Officer of the Corporation or, in his or her absence, such person as may be chosen by the Board of Directors shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman of the meeting shall appoint. Section 6. Conduct of Business. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order. Section 7. Proxies and Voting. At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing filed in accordance with the procedure established for the meeting. Each stockholder shall have one (1) vote for every share of stock entitled to vote that is registered in his or her name on the record date for the meeting, except as otherwise provided in the Certificate of Incorporation or as required by law. All elections of directors shall be determined by a plurality of the votes cast and, except as otherwise required by law. All other matters shall be determined by the affirmative vote of the holders of a majority of the shares present and entitled to vote. Section 8. Stock List. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. Section 9. Consent of Stockholders in Lieu of Meeting. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office or its principal place of business in Delaware. Such delivery may be made either by hand or by certified or registered mail, return receipt requested.
ARTICLE II BOARD OF DIRECTORS
Section 1. Number and Term of Office. The number of directors who shall constitute the whole Board shall be such number as the Board of Directors shall from time to time have designated, except that in the absence of any such designation, such number shall be three (3). Each director shall be elected for a term of one year and until his or her successor is elected and qualified, except as otherwise provided herein or required by law. Whenever the authorized number of directors is increased between annual meetings of the stockholders, a majority of the directors then in office shall have the power to elect such new directors for the balance of a term and until their successors are elected and qualified. Any decrease in the authorized number of directors shall not become effective until the expiration of the term of the directors then in office unless, at the time of such decrease, there shall be vacancies on the board at least equal to the size of the decrease. Section 2. Vacancies. If the office of any director becomes vacant by reason of death, resignation, disqualification, removal or other cause, a majority of the directors remaining in office, although less than a quorum, may elect a successor for the unexpired term and until his or her successor is elected and qualified. Section 3. Regular Meetings. Regular meetings of the Board of Directors shall be held at such place within the State of Delaware, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors. A notice of each regular meeting shall not be required. Section 4. Special Meetings. Special meetings of the Board of Directors may be called by two-third (2/3) of the directors then in office by the Chief Executive Officer and shall be held at such place within the State of Delaware, on such date, and at such time as the Chief Executive Officer shall fix. Notice of the place, date, and time of each such special meeting shall be given each director (i) by mailing written notice not less than five (5) days before the meeting or (ii) by communication of such notice by E- mail or facsimile transmission not less than twenty-four (24) hours before the meeting. Unless the notice indicates otherwise, any and all business may be transacted at a special meeting. Section 5. Quorum. At any meeting of the Board of Directors, a majority of the total number of directors then in office shall constitute a quorum for all purposes. If a quorum is not present, a majority of those present may adjourn the meeting to another place within the State of Delaware, date, or time, without further notice or waiver thereof. Section 6. Participation in Meetings Bv Conference Telephone. Members of the Board of Directors, or of any committee thereof, may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment if all persons participating in the meeting can hear each other and such participation shall constitute presence in person at the meeting. Section 7. Conduct of Business. At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law. Action may be taken by the Board of Directors without a meeting if all of the director's consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors. Section 8. Powers. The Board of Directors may, except as prohibited by law, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, including, without limiting the generality of the foregoing, the unqualified power: (1) To declare dividends from time to time in accordance with law; (2) To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine; (3) To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, and to do all things necessary in connection therewith; (4) To remove any officer of the Corporation with or without cause, and from time to time to confer the powers and duties of any officer upon any other person for the time being; (5) To confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers, employees and agents; (6) To adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine; (7) To adopt from time to time such insurance, retirement, and other benefit plans for directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine; and, (8) To adopt from time to time regulations, not inconsistent with these By-laws and the Corporation's Certificate of Incorporation, for the management of the Corporation's business and affairs.
ARTICLE III COMMITTEES
Section 1. Committees of the Board of Directors. The Board of Directors, by a vote of a majority of the whole Board, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as the Board may thereby confers, to serve at the pleasure of the Board and shall, for those committees elect directors to serve as members thereof, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. Any committee so designated may exercise the power and authority of the Board of Directors to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law if the resolution which designates the committee or a supplemental resolution of the Board of Directors shall so provide. Section 2. Conduct of Business. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; a majority of the members of any committee; all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee.
ARTICLE IV OFFICERS
Section 1. Officers. The officers of the Corporation shall be elected by the Board of Directors, and shall include a President, a Secretary, a Treasurer, and such other officers as may be elected from time to time in accordance with these By-laws. Section 2. Term . Each officer of the Corporation shall serve at the pleasure of the Board of Directors, and the Board may remove any officer at any time with or without cause. Section 3. Authority and Duties. All officers of the Corporation shall have such authority and perform such duties in the management of the property and affairs of the Corporation as generally pertain to their respective offices, as well as such authority and duties as may be determined by the Board of Directors. Section 4. Execution of Instruments. Checks, notes, drafts, other commercial instruments, assignments, guarantees of signatures, and contracts shall be executed by the President, any Vice President, the Secretary, the Treasurer, or such officers or employees as the Board of Directors or any of such designated officers may direct. Section 5. Compensation. The Board of Directors shall have power to fix, or to delegate the power to fix, the compensation for services in any capacity of all officers of the Corporation. The Board of Directors shall have the authority to establish, within legal limits, such pension, retirement, stock purchase and stock option plans, and such other fringe benefit plans for the benefit of officers of the Corporation as it deems to be in the best interest of the Corporation. Section 6. Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board of Directors, the President, any Vice President, the Secretary, the Treasurer or any officer of the Corporation authorized by such officers shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.
ARTICLE V STOCK
Section 1. Certificates of Stock. Each stockholder shall be entitled to a certificate signed by, or in the name of the Corporation by, the President or a Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, certifying the number of shares owned by the stockholder. Any or all of the signatures on the certificate may be by facsimile. Section 2. Transfers of Stock. Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Section 3. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion, or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall be not more than ten (10) days after the date upon which the resolution fixing the record date is adopted. If no record date has been fixed by the Board of Directors and no prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner prescribed by Article I, Section 9 hereof. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Delaware General Corporation Law with respect to the proposed action by written consent of the stockholders, the record date for determining stockholders entitled to consent to corporate action in writing shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. Section 4. Lost. Stolen. Or Destroyed Certificates. In the event of the loss, theft, or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft, or destruction and concerning the giving of a satisfactory bond or indemnity.
ARTICLE VI NOTICES
Section 1. Notices. Except as otherwise specifically provided herein or required by law, all notices required to be given under these Bylaws shall be in writing and shall be deemed given if delivered by hand, deposited in the mails, postage paid, or sent by E-mail or facsimile transmission. Any such notice shall be addressed to person his or her last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand-delivered, or dispatched, if otherwise delivered shall be the time of the giving of the notice. Section 2. Waivers. A written waiver of any notice, signed by the person entitled to receive such notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given.
ARTICLE VII MISCELLANEOUS
Section 1. Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer. Section 2. Reliance Upon Books, Reports and Records. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation. Section 3. Fiscal Year. The fiscal year of the Corporation shall be as fixed by the Board of Directors. Section 4. Time Periods. In applying any provision of these By-Laws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.
ARTICLE VIII INDEMNIFICATION OF DIRECTORS AND Officers
Section 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to, or is otherwise involved in, any action, suit or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, or agent or in any other capacity while serving as a director, officer, employee, or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes, or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 3 of this Article VIII with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. Section 2. Right to Advancement of Expenses. The right to indemnification conferred in Section 1 of this Article VIII shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that an advancement of expenses incurred by an indemnitee shall be made only on delivery to the Corporation of an undertaking (hereinafter an undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section 2 or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections 1 and 2 of this Article VIII shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the indemnitee's heirs executors and administrators. Section 3. Right of Indemnitee to Bring Suit. If a claim under Section 1 or 2 of this Article VIII is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII or otherwise shall be on the Corporation. Section 4. Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article VIII shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Corporation's Certificate of Incorporation, By-Laws, agreement, vote of stockholders, or disinterested directors or otherwise. Section 5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee, or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. Section 6. Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.
ARTICLE IX AMENDMENTS
These By-Laws may be amended or repealed by the Board of Directors at any meeting or by the stockholders.
WRITTEN ACTION OF INCORPORATOR OF EDISON CAPITAL RESERVES CORPORATION
THE UNDERSIGNED, being the sole incorporator of Edison Capital Reserves Corporation, a Delaware corporation (the "Corporation"), hereby adopts the following resolutions pursuant to Sections 107 and 108 of the Delaware General Corporation Law: RESOLVED, that the Bylaws attached hereto shall be the Bylaws of the Corporation. RESOLVED, that the following persons are hereby elected to serve as the initial directors of the Corporation until the first annual meeting of the Corporation or until their successors are elected and duly qualify and that they shall constitute the directors of the Corporation:
	1. Anthony J . Kamerick 2. Ellen Sheriff Rogers 3. Joan L. Dobrzynski
This written consent shall be inserted into the minute book of the Corporation. IN WITNESS WHEREOF, the undersigned sole incorporator has executed this written consent as of the 29th day of November, 2000.
		/s/ Kimberlee A. Poteet Kimberlee A. Poteet Incorporator

	STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 04/01/1999 991128325 - 3024600
CERTIFICATE OF FORMATION OF EDISON PLACE, L.L.C
The undersigned, an authorized natural person, for the purpose of forming a limited liability company, under the provisions and subject to the requirements of the State of Delaware (particularly Chapter 18, Title 6 of the Delaware Code and the acts amendatory thereof and supplemental thereto, and known, identified, and referred to as the "Delaware Limited Liability Company Act"), hereby certifies that: The name of the limited liability company (hereinafter called the "limited liability company") is Edison Place, L.L.C . The address of the registered office and the name and the address of the registered agent of the limited liability company required to be maintained by Section 18-104 of the Delaware Limited Liability Company Act are Corporation Service Company, 1013 Center Road, Wilmington, Delaware 19805.
Executed on March 31, 1999	/s/ LESLIE C. ZIMBERG Leslie C. Zimberg Secretary

LIMITED LIABILITY COMPANY AGREEMENT OF EDISON PLACE, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Edison Place, L.L.C. (the "Company"), is made by Potomac Capital Investment Corporation, a Delaware corporation and the sole member of the Company (the "Member"). WHEREAS, the Member has formed the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. Section 1810 1, et seq) as amended from time to time (the "Act), and hereby agrees as follows: 1. Name . The name of the Company is Edison Place, L.L.C. 2. Term . The term of the Company commenced on April 1, 1999 with the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Act and shall continue until dissolution and termination of the Company in accordance with Section 21 hereof. 3. Purpose . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act. 4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby authorized to: (a) acquire by purchase, lease, contribution of property or otherwise, own, hold, sell, convey, transfer or dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (b) act as a trustee, executor, nominee, bailee, director, officer, agent or in some other fiduciary capacity for any person or entity and to exercise all of the powers, duties, rights and responsibilities associated therewith; (c) take any and all actions necessary, convenient or appropriate as trustee, executor, nominee, bailee, director, officer, agent or other fiduciary, including the granting or approval of waivers, consents or amendments of rights or powers relating thereto and the execution of appropriate documents to evidence such waivers, consents or amendments, (d) operate, purchase, maintain, finance, improve, own, sell, convey, assign, mortgage, lease or demolish or otherwise dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (e) borrow money and issue evidences of indebtedness in furtherance of any or all of the purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the Company; (f) invest any funds of the Company pending distribution or payment of the same pursuant to the provisions of this Agreement and open and maintain checking and savings accounts with banks and savings institutions; (g) prepay in whole or in part, refinance, recast, increase, modify or extend any indebtedness of the Company and, in connection therewith, execute any extensions, renewals or modifications of any mortgage or security agreement securing such indebtedness; (h) enter into, perform and carry out contracts of any kind, including, without limitation, contracts with the Member or any person or entity affiliated with the Member, necessary to, in connection with, convenient to, or incidental to the accomplishment of the purpose of the Company; (i) employ or otherwise engage employees, managers, contractors, advisors, attorneys and consultants and pay reasonable compensation for such services; (j) enter into partnerships, limited liability companies, trusts, associations, corporations or other ventures with other persons or entities in furtherance of the purpose of the Company; and (k) do such other things and engage in such other activities related to the foregoing as may be necessary, convenient or incidental to the conduct of the business of the Company, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act. 5. Principal Business Office . The principal business office of the Company shall be located at 1801 K Street, N.W., Suite 900, Washington, D.C. 20006, or any other location as may hereafter be determined by the Member. 6. Registered Office. The address of the registered office of the Company in the State of Delaware is 1013 Centre Road, Wilmington, Delaware- 19805. 7. Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is Corporation Service Company. 8. Member . The name and mailing address of the Member are set forth on Schedule A attached hereto. 9. Limited Liability . Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company. 10. Capital Contributions. The Member shall contribute the amount of cash to the Company set forth on Schedule A attached hereto. 11. Additional Contributions. The Member is not required to make any additional capital contribution to the Company. However, the Member may make additional capital contributions to the Company at any time. To the extent the Member makes an additional capital contribution to the Company, the Member shall revise Schedule A of this Agreement. 12. Allocation of Profits and Losses . The Company's profits and losses shall be allocated to the Member. 13. Distributions . Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other applicable law. 14. Management . (a) The business and affairs of the Company shall be managed under the direction and control of a management committee (the "Management Committee"), which shall consist of five (5) individuals, who need not be Members. The Management Committee initially shall consist of the following persons: John D. McCallum, William D. Shapiro, Frank J. Spingler, Kevin M. McGowan and Leslie C. Zimberg. (b) All powers of the Company shall be exercised by or under the authority of the Management Committee. Decisions of the Management Committee within its scope of authority shall be binding upon the Company and the Member. (c) Meetings of the Management Committee shall be held at the principal place of business of the Company or at any other place that a majority of the members of the Management Committee determine. In the alternative, meetings may be held by conference telephone, provided that each member of the Management Committee can hear the others. The presence of at least two (2) of the members of the Management Committee shall constitute a quorum for the transaction of business. Meetings shall be held once each month, or otherwise in accordance with a schedule established by the Management Committee. In addition, any member of the Management Committee may convene a meeting thereof upon at least two (2) business days' prior written notice to the other members. The Management Committee shall act at meetings by majority vote. The Management Committee also may make decisions, without holding a meeting, by written consent of a majority of the members of the Management Committee. Minutes of each meeting and a record of each decision shall be kept by the designee of the Management Committee and shall be given to the Member promptly after the meeting or decision. (d) Except as otherwise determined by the Member, the members of the Management Committee shall serve without compensation from the Company. (e) The Member, with or without cause, at any time and from time to time and for any reason, may remove any member of the Management Committee then acting and appoint a new member of the Management Committee. 15. Officers. (a) The Management Committee may, from time to time as it deems advisable, appoint officers of the Company (the "Officers") and assign in writing titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Management Committee decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. The Officers shall be subject to the general supervision and control of the Management Committee and shall carry out the policy decisions made by the members of the Management Committee. At each regular meeting of the Management Committee (and, when requested by any member thereof, at any special meeting of the Management Committee), the President or other appropriate Officers shall be present and shall report to the Management Committee on the operations of the Company or any other matters as any member of the Management Committee may request. Any delegation pursuant to this Section 15 may be revoked at any time by the Management Committee. An Officer may be removed with or without cause by the Management Committee. (b) At the direction of the Management Committee, the President and other appropriate Officers shall have the full power to perform any act that an "authorized person" may perform under the Act, and to execute, for and on behalf of the Company, any and all documents and instruments which may be necessary to carry on the business of the Company, including, without limitation, any and all deeds, contracts, leases, mortgages, deeds of trust, promissory notes, guarantees, security agreements, and financing statements pertaining to the Company's assets or obligations. No person dealing with the President or any other Officer need inquire into the validity or propriety of any document or instrument executed in the name of the Company by the President or other Officer, or as to the authority of the President or other Officer in executing the same. 16. Other Business . The Member may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement. 17. Exculpation and Indemnification . No member of the Management Committee or Officer (each of whom is hereinafter referred to as a "Manager") shall be liable to the Company or the Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that a Manager shall be liable for any such loss, damage or claim incurred by reason of such Manager's willful misconduct. To the full extent permitted by applicable law, a Manager shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Manager by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner- reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that no Manager shall be entitledto be indemnified in respect of any loss, damage or claim incurred by such Manager by reason of willful misconduct with respect to such acts or omissions; provided, however , that any indemnity under this Section 17 shall be provided out of and to the extent of Company assets only, and the Member shall have no personal liability on account thereof. 18. Assignments . The Member may assign in whole or in part its interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 18, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the Member shall cease to be a member of the Company. 19. Resignation. The Member may resign from the Company; provided , that in the event of such resignation an additional member of the Company shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the Member's resignation, and, immediately following such admission, the Member shall cease to be a member of the Company. 20. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member. 21. Dissolution. (a) The Company shall have a perpetual existence; provided, however that the Company shall dissolve, and its affairs shall be wound up, upon the occurrence of either of the following: (i) the written consent of the Member, or (ii) the retirement, resignation or dissolution of the Member or the occurrence of any other event which terminates the continued membership of the Member in the Company unless the business of the Company is continued in a manner permitted by the Act. (b) The bankruptcy of the Member will not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution. (c) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act. 22. Separability of Provisions. Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceable or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal. 23. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof. 24. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws. 25. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member. IN WITNESS WHEREOF, the undersigned, intending to be legally bound thereby, has duly executed this Agreement as of the 1st day of April, 1999.
	POTOMAC CAPITAL INVESTMENT CORPORATION By: /s/ JOHN D.McCALLUM John D. McCallum, President

SCHEDULE A To Edison Place, L.L.C. Limited Liability Company Agreement
Name	Mailing Address	Agreed Value of Capital Contribution	Percentage Interest
Potomac Capital Investment Corporation	1801 K Street, N.W. Suite 900 Washington, D.C. 20006	$1,000	100%

RESTATED CERTIFICATE OF INCORPORATION OF ELECTRO ECOLOGY, INC. UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
We, the undersigned, being President and Secretary of Electro Ecology, Inc., a corporation existing under the laws of the State of New York, do hereby certify under the seal of the said corporation as follows: FIRST : The name of the corporation is ELECTRO ECOLOGY, INC. SECOND : The certificate of incorporation of the corporation was filed by the Secretary of State of the State of New York on the 18th day of January, 1978. THIRD : The amendments to the certificate of incorporation effected by this restated certificate are as follows: I
(1)	To make minor wording and punctuation changes to the second paragraph of ARTICLE SECOND in order to clarify this paragraph;
(2)	To eliminate ARTICLE SEVENTH which provides that the incorporator is a natural person over the Age of twenty-one years, and resides at Convent Station, New Jersey;
(3)	To renumber ARTICLE EIGHTH as ARTICLE SEVENTH
(4)	To eliminate ARTICLE NINTH which provides that the fiscal year of the corporation shall terminate on October 31, 1978;
(5)	To add a provision requiring the extraordinary consent of the shareholders for certain actions of the corporation;
(6)	To add a provision providing that the shareholders may make agreements among themselves and with the corporation restricting and limiting the sale of their shares in such manner as they may agree, fix and determine;
(7)	To add a provision with respect to elimination of certain liability of directors; and
(8)	To add a provision with respect to indemnification of certain persons.
FOURTH : This restatement of the certificate of incorporation was authorized by vote of the board of directors of the corporation, followed by vote of the holders of a majority of all outstanding shares entitled to vote thereon at a meeting of shareholders in accordance with Sections 803 and 807 of the Business Corporation Law of the State of New York. FIFTH : The text of the certificate of incorporation of the corporation is hereby restated as amended by this restated certificate, to read in full, as follows:
CERTIFICATE OF INCORPORATION OF ELECTRO ECOLOGY, INC.
FIRST : The name of the corporation is ELECTRO ECOLOGY, INC. SECOND : The purposes for which it is to be formed are to do any and all of the things hereinafter set forth to the same extent as natural persons might or could do in any part of the world namely: To engage in the business of manufacturing, designing, creating, developing, owning, producing, constructing, using, distributing, installing, buying, selling, leasing, reconstructing, repairing and generally dealing in and with machinery, generators, motors, lamps, apparatus, supplies and articles of every kind and description appertaining to or in any way connected with the production, use, sale, distribution, regulation, control or application of electricity or electrical apparatus for the purpose of light, heat, power, locomotion or for any other use or for any other purpose; of constructing, acquiring, using, selling, buying or leasing any works, construction, or plant or part thereof, connected with, or involving such use, distribution, regulation, control or application of electricity or the control or use of electrical generators or other apparatus for any purpose; and of producing, furnishing and supplying electrical apparatus in any form and any purpose whatsoever. To build, manufacture, construct, assemble, design, develop, purchase or otherwise to acquire, own, operate, equip, replace, repair, remodel, recondition or otherwise dispose of, trade and deal in electrical power plants, and related and assorted devices and power units, devices, engines, machines, mechanisms and apparatus of whatsoever kind and description and to sell or lease any electrical power or energy produced therefrom. The foregoing enumeration of powers shall not be deemed to limit or restrict in any manner the general powers of the corporation, and the enjoyment and exercise thereof, as conferred by the laws of the State of New York upon corporations organized under the provisions of the Business Corporation Law. THIRD : The total number of shares that m ay be issued by the corporation is 200, all of which are to be without nominal or par value, and which are to be the same class and are to be common stock. FOURTH : The authorized shares of stock without par value may be issued by this corporation from time to time, for such consideration as may be fixed from time to time by the Board of Directors, and any and all shares without par value so issued, the consideration for which so affixed has been paid or delivered, shall be fully paid stock and shall not be liable to any further call or assessment thereon, and the holders of such shares shall not be liable for any further payments in respect to such shares. FIFTH : The office of the corporation shall be located in the Incorporated Village of Wappingers Falls, County of Dutchess and State of New York; and the address to which the Secretary of State shall mail a copy of process in any action or proceeding against the corporation which may be served upon it is Box 126, Wappingers Falls, New York 12590. SIXTH : The duration of the corporation shall be perpetual. SEVENTH: The Secretary of State of the State of New York is hereby designated as the agent of the corporation upon whom process in any action or proceeding against it may be served. EIGHTH : The following actions shall require the unanimous approval of the shareholders of common stock of the corporation, which approval shall be deemed granted as provided below: (a) any amendment of this certificate of incorporation or the by-laws of the corporation; (b) the dissolution or liquidation of the corporation; (c) the authorization or issuance of additional shares or any other debt or equity security of the corporation or rights convertible into such shares or securities; (d) the sale or transfer of all or a substantial portion of the assets of the corporation; (e) the merger or consolidation of the corporation with any other corporation or business entity or the acquisition by the corporation of the assets of or stock owned by any other person or party other than in the ordinary course of business; (f) any action to increase or decrease the number of Directors comprising the Board of Directors of the corporation; (g) the appointment of any person to the position of President of the corporation; (h) the payment of any dividend (whether or not previously declared) on any of the shares of the corporation; (i) the entry into, termination of, or amendment of any written or unwritten contractual agreement or understanding between the corporation and any shareholder of the corporation, or of any entity directly or indirectly controlling, controlled by, or under common control with such shareholder of the corporation, or any employee or agent of any of the foregoing, or the waiver or settlement of any cause of action or claim against any of the foregoing; (j) the entering into of any Material Contracts (as defined below) not covered by (i) above between the corporation and third parties and all material amendments, waivers and consents in connection therewith; (k) any sale, acquisition, disposition or hypothecation of any asset of the corporation which would materially impair or change the business of the corporation as currently being conducted; (1) any long range plans and annual capital, revenue and expense budgets and plans, including financing plans, and ratification of the previous year's expenditures; (m) any borrowing of money or other commitment of the credit of the corporation and any guaranty or similar surety-type obligations, except for indebtedness to trade creditors incurred in the ordinary course of business; (n) any voluntary prepayment or extension of debt incurred by the corporation; (o) approval of minutes of meetings of the Board of Directors; (p) transaction by the corporation' of any business other than that referred to in the certificate of incorporation or the by-laws; (q) adoption of, and material changes to, the corporation's accounting practices and/or treatments; (r) the commencement of litigation or arbitration on behalf of the corporation or the settlement of any litigation or arbitration on behalf of the corporation; (s) the terms of any credit enhancements, including, but not limited to, guaranties or letters of credit; or (t) the procurement of insurance for the corporation and its properties and any modification of that insurance program and other material actions taken with respect to the corporation's insurance. Approval of the actions listed above shall require affirmative votes of each shareholder of common stock. For purposes of the preceding sentence, each shareholder of common stock shall have one vote. That vote shall be cast by the two members of the Board of Directors designated by that shareholder, acting in agreement, or by one such representative of that shareholder having the proxy of the other such representative of that shareholder. The agreement of any member of the Board of Directors to any action listed above may be withheld for any reason whatsoever. Any shareholder's failure to agree to any such action shall not be subject to question by the other shareholder or the corporation. "Material Contract" means in this ARTICLE NINTH, with respect to the corporation, any contract or other agreement to which the corporation is a party or by which it or its assets or properties are bound or subject (i) which provides for payments by the corporation, or the accrual by the corporation of an obligation to pay, salaries, compensation or fees to any person or any entity, in an amount in excess of $25,000 per annum; (ii) for the sale of any asset of the corporation or pursuant to which any person has an option to purchase any assets of the corporation for a price exceeding $25,000, or for the purchase of any item for a price exceeding $25,000, other than in the ordinary course of business; (iii) requiring capital expenditures or other payments by the corporation of an amount in excess of $25,000 during the term thereof; (iv) relating to the acquisition by the corporation of the operating business of, or the disposition of any operating business by, any other person; (v) in which the corporation has a joint venture interest; (vi) which contain covenants on the part of the corporation or any of its officers, directors or employees not to compete with the business of the corporation in any geographical area; (vii) relating to the making of any loan, advance credit, guaranty or other direct or indirect obligation of the corporation, contingent or otherwise, in excess of $25,000 in any one case, or to any stockholder or employee *of the corporation; (viii) with any governmental or regulatory body; or (ix) requiring the consent of a third party to the transfer of the benefits thereof. NINTH : The shareholders may make agreements among themselves and with the corporation restricting and limiting the sale of their shares in such manner as they may agree, fix and determine. TENTH : The personal liability of the directors of the corporation is eliminated to the fullest extent permitted by the provisions of paragraph (b) of Section 402 of the Business Corporation Law of the State of New York, as the same may be amended and supplemented. ELEVENTH : The corporation shall, to the fullest extent permitted by Article 7 of the Business Corporation Law of the State of New York, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Article from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said Article, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which any person may be entitled under any By-Law, resolution of shareholders, resolution of directors, agreement, or otherwise, as permitted by said Article, as to action in any capacity in which he served at the request of the corporation. IN WITNESS WHEREOF, we have signed this restated certificate of incorporation this 5th day of June 1990 and we affirm the statements contained therein as true under penalties of perjury.
		/s/ ROBERT W. HOLLIS Robert Hollis President
		/s/ SERGE RAFFET Serge S.Raffet Secretary

BY-LAWS

ELECTRO ECOLOGY, INC.

October 1, 1990

BY-LAWS

ELECTRO ECOLOGY, INC.

ARTICLE I - OFFICES

The principal office of the corporation shall be in the Village of Wappingers Falls, County of Dutchess, State of New York. The corporation may also have offices at such other places within or without the State of New York as the board may from time to time determine or the business of the corporation may require.

ARTICLE II - SHAREHOLDERS

1. PLACE OF MEETINGS.

Meetings of shareholders shall be held at the principal office of the corporation or at such place within or without the State of New York as the board shall authorize.

2. ANNUAL MEETING.

The annual meeting of the shareholders shall be held on the thirtieth day of January at 10:00 A.M. in each year if not a legal holiday, and, if a legal holiday, then on the next business day following at the same hour, or on such other date as the Board of Directors shall determine, when the shareholders shall elect a board and transact such other business as may properly come before the meeting.

3. SPECIAL MEETINGS.

Special meetings of the shareholders may be called by the board or by the president and shall be called by the president or the secretary at the request in writing of a majority of the board or at the request in writing by shareholders owning a majority in amount of the shares issued and outstanding. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at a special meeting shall be confined to the purposes stated in the notice.

4. FIXING RECORD DATE.

For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action, the board shall fix, in advance, a date as the record date for any such determination of shareholders. Such date shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action. If no record date is fixed it shall be determined in accordance with the provisions of law.

5. NOTICE OF MEETING OF SHAREHOLDERS.

Written notice of each meeting of shareholders shall state the purpose or purposes for which the meeting is called, the place, date and hour of the meeting and unless it is the annual meeting, shall indicate that it is being issued by or at the direction of the person or persons calling the meeting. Notice shall be given either personally or by mail to each shareholder entitled to vote at such meeting, not less than ten nor more than fifty days before the date of the meeting. If action is proposed to be taken that might entitle shareholders to payment for their shares, the notice shall include a statement of that purpose and to that effect. If mailed, the notice is given when deposited in the United States mail, with postage thereon prepaid, directed to the shareholder at his address as it appears on the record of shareholders, or, if he shall have filed with the secretary a written request that notices to him be mailed to some other address, then directed to him at such other address.

6. WAIVERS.

Notice of meeting need not be given to any shareholder who signs a waiver of notice, in person or by proxy, whether before or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him.

7. QUORUM OF SHAREHOLDERS.

Unless the certificate of incorporation provides otherwise, the holders of a majority of the shares entitled to vote thereat shall constitute a quorum at a meeting of shareholders for the transaction of any business, provided that when a specified item of business is required to be voted on by a class or classes, the holders of a majority of the shares of such class or classes shall constitute a quorum for the transaction of such specified item of business.

When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.

The shareholders present may adjourn the meeting despite the absence of a quorum.

8. PROXIES.

Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent without a meeting may authorize another person or persons to act for him by proxy.

Every proxy must be signed by the shareholder or his attorney-in-fact. No proxy shall be valid after expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the shareholder executing it, except as otherwise provided by law.

9. QUALIFICATION OF VOTERS.

Every shareholder of record shall be entitled at every meeting of shareholders to one vote for every share standing in his name on the record of shareholders, unless otherwise provided in the certificate of incorporation.

10. VOTE OF SHAREHOLDERS.

Except as otherwise required by statute, the certificate of incorporation or that certain Shareholders' Agreement dated as of June 5, 1990 (the "Shareholders' Agreement");

(a) directors shall be elected by a plurality of the votes cast at a meeting of shareholders by the holders of shares entitled to vote in the election;

(b) all other corporate action shall be authorized by a majority of the votes cast.

11. WRITTEN CONSENT OF SHAREHOLDERS.

Any action that may be taken by vote may be taken without a meeting on written consent, setting forth the action so taken, signed by the holders of all the outstanding shares entitled to vote thereon or signed by such lesser number of holders as may be provided for in the certificate of incorporation.

12. SHAREHOLDERS AGREEMENTS.

The shareholders may make agreements among themselves and with the corporation restricting and limiting the sale of their shares in such manner as they may agree, fix and determine.

ARTICLE III - DIRECTORS

1. BOARD OF DIRECTORS.

Subject to any provision in the certificate of incorporation or the Shareholders' Agreement, the business of the corporation shall be managed by its board of directors, each of whom shall be at least 18 years of age.

2. NUMBER OF DIRECTORS.

The number of directors shall be four.

3. ELECTION AND TERM OF DIRECTORS.

Subject to any provision in the Shareholders' Agreement, at each annual meeting of shareholders, the shareholders shall elect directors to hold office until the next annual meeting. Each director shall hold office until the expiration of the term for which he is elected and until his successor has been elected and qualified, or until his prior resignation or removal.

4. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.

Newly created directorships resulting from an increase in the number of directors and vacancies occurring in the board for any reason except the removal of directors without cause may be filled by a vote of a majority of the directors then in office, although less than a quorum exists, unless otherwise provided in the certificate of incorporation or the Shareholders' Agreement. Vacancies occurring by reason of the removal of directors without cause shall be filled by vote of the shareholders unless otherwise provided in the certificate of incorporation or the Shareholders' Agreement. A director elected to fill a vacancy caused by resignation, death or removal shall be elected to hold office for the unexpired term of his predecessor.

5. REMOVAL OF DIRECTORS.

Subject to the Shareholders' Agreement, any or all of the directors may be removed for cause by vote of the shareholders or by action of the board. Subject to the Shareholders' Agreement, directors may be removed without cause only by vote of the shareholders.

6. RESIGNATION.

A director may resign at any time by giving written notice to the board, the president or the secretary of the corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the board of such officer, and the acceptance of the resignation shall not be necessary to make it effective.

7. QUORUM OF DIRECTORS.

Unless otherwise provided in the certificate of incorporation or the Shareholders' Agreement, a majority of the entire board shall constitute a quorum for the transaction of business or of any specified item of business.

8. ACTION OF THE BOARD.

Unless otherwise required by law or the Shareholders' Agreement, the vote of a majority of the directors present at the time of the vote, if a quorum is present at such time, shall be the act of the board. Each director present shall have one vote regardless of the number of shares, if any, which he may hold.

9. PLACE AND TIME OF BOARD MEETINGS.

The board may hold its meetings at the office of the corporation or at such other places, either within or without the State of New York, as it may from time to time determine.

10. REGULAR ANNUAL MEETING.

A regular annual meeting of the board shall be held immediately following the annual meeting of shareholders at the place of such annual meeting of shareholders.

11. NOTICE OF MEETINGS OF THE BOARD, ADJOURNMENT.

(a) Regular meetings of the board may be held without notice at such time and place as it shall from time to time determine. Special meetings of the board shall be held upon notice to the directors and may be called by the president upon three days notice to each director either personally or by mail or by wire; special meetings shall be called by the president or by the secretary in a like manner on written request of two directors. Notice of a meeting need not be given to any director who submits a waiver of notice whether before or after the meeting or who attends the meeting without protesting prior thereto or at its commencement, the lack of notice to him.

(b) A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. Notice of the adjournment shall be given all directors who were absent at the time of the adjournment and, unless such time and place are announced at the meeting, to the other directors.

12. CHAIRMAN.

At all meetings of the board the president, or in his absence, a chairman chosen by the board shall preside.

13. EXECUTIVE AND OTHER COMMITTEES.

The board, by resolution adopted by a majority of the entire board, may designate from among its members an executive committee and other committees, each consisting of three or more directors. Each such committee shall serve at the pleasure of the board.

14. COMPENSATION.

No compensation shall be paid to directors, as such, for their services, but by resolution of the board a fixed sum and expenses for actual attendance, at each regular or special meeting of the board may be authorized. Nothing herein contained shall be construed to preclude any director from serving-the corporation in any other capacity and receiving compensation therefor.

ARTICLE IV - OFFICERS

1. OFFICES, ELECTION, TERM.

(a) Unless otherwise provided for in the certificate of incorporation or the Shareholders' Agreement, the board may elect or appoint a president, one or more vice-presidents, a secretary and a treasurer, and such other officers as it may determine, who shall have such duties, powers and functions as hereinafter provided.

(b) All officers shall be elected or appointed to hold office until the meeting of the board following the annual meeting of shareholders.

(c) Each officer shall hold office for the term for which he is elected or appointed and until his successor has been elected or appointed and qualified.

2. REMOVAL, RESIGNATION, SALARY, ETC.

(a) Any officer elected or appointed by the board may be removed by the board at any time only by the affirmative vote of all members of the board other than such officer, if he is a director.

(b) In the event of the death, resignation or removal of an officer, the board in its discretion may elect or appoint a successor to fill the unexpired term.

(d) The salaries of all officers shall be fixed by the board.

(e) The directors may require any officer to give security for the faithful performance of his duties.

3. PRESIDENT.

The president shall be the chief executive officer of the corporation; he shall preside at all meetings of the shareholders and of the board; he shall have the management of the business of the corporation and shall see that all orders and resolutions of the board are carried into effect.

4. VICE-PRESIDENTS.

During the absence or disability of the president, the vice-president, or if there are more than one, the executive vice-president, shall have all the powers and functions of the president. Each vice-president shall perform such other duties as the board shall prescribe.

5. SECRETARY.

The secretary shall:

(a) attend all meetings of the board and of the shareholders;

(b) record all votes and minutes of all proceedings in a book to be kept for that purpose;

(d) keep in safe custody the seal of the corporation and affix it to any instrument when authorized by the board;

(e) when required, prepare or cause to be prepared and available at each meeting of shareholders a certified list in alphabetical order of the names of the shareholders entitled to vote thereat, indicating the number of shares of each respective class held by each;

(f) keep all the documents and records of the corporation as required by law or otherwise in a proper and safe manner.

(g) perform such other duties as may be prescribed by the board.

6. ASSISTANT-SECRETARIES.

During the absence or disability of the secretary, the assistant-secretary, or if there are more than one, the one so designated by the secretary or by the board, shall have all the powers and functions of the secretary.

7. TREASURER.

The treasurer shall:

(a) have the custody of the corporate funds and securities;

(b) keep full and accurate accounts of receipts and disbursements in the corporate books;

(c) deposit all money and other valuables in the name and to the credit of the corporation in such depositories as may be designated by the board;

d) disburse the funds of the corporation as may be ordered or authorized by the board and preserve proper vouchers for such disbursements;

(e) render to the president and board at the regular meetings of the board, or whenever they require it, an account of all his transactions as treasurer and of the financial condition of the corporation;

(f) render a full financial report at the annual meeting of the shareholders if so requested;

(g) be furnished by all corporate officers and agents at his request, with such reports and statements as he may require as to all financial transactions of the corporation;

(h) perform such other duties as are given to him by these by-laws or as from time to time are assigned to him by the board or the president.

8. ASSISTANT-TREASURER.

During the absence or disability of the treasurer, the assistant-treasurer, or if there are more than one, the one so designated by the secretary or by the board, shall have all the powers and functions of the treasurer.

9. SURETIES AND BONDS.

In case the board shall so require, any officer or agent of the corporation shall execute to the corporation a bond in such sum and with such surety or sureties as the board may direct, conditioned upon the faithful performance of his duties to the corporation and including responsibility for negligence and for the accounting for all property, funds or securities of the corporation which may come into his hands.

ARTICLE V - CERTIFICATES FOR SHARES

1. CERTIFICATES.

The shares of the corporation shall be represented by certificates. They shall be numbered and entered in the books of the corporation as they are issued. They shall exhibit the holder's name and the number of shares and shall be signed by the president or a vice-president and the treasurer or the secretary and shall bear the corporate seal.

2. LOST OR DESTROYED CERTIFICATES.

The board may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation, alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum with such surety or sureties as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed.

3. TRANSFER OF SHARES.

(a) Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the corporation which shall be kept at its principal office. No transfer shall be made within ten days next preceding the annual meeting of shareholders.

(b) The corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by the laws of New York.

4. CLOSING TRANSFER BOOKS.

The board shall have the power to close the share transfer books of the corporation for a period of not more than ten days during the thirty-day period immediately preceding (1) any shareholders' meeting, or (2) any date upon which shareholders shall be called upon to or have a right to take action without a meeting, or (3) any date fixed for the payment of a dividend or any other form of distribution, and only those shareholders of record at the time the transfer books are closed, shall be recognized as such for the purpose of (1) receiving notice of or voting at such meeting, or (2) allowing them to take appropriate action, or (3) entitling them to receive any dividend or other form of distribution.

5. LEGEND.

There shall be placed on each and every certificate representing any of the shares the following legends:

(a) On the face of each such certificate: This Certificate is subject to the restrictions noted on the reverse side hereof and to the consent of Westinghouse Credit Corporation.

(b) On the reverse side of each such Certificate: This Certificate and the transfer of any interest herein or in the securities evidenced hereby are subject to the terms and conditions of that certain Shareholders' Agreement dated as of June 5, 1990, a copy of which is on file and available for inspection during business hours at the office of the Company, and no transfer may be made except in accordance with and subject to the terms and conditions thereof.

ARTICLE VI - DIVIDENDS

Subject to the provisions of the certificate of incorporation and to applicable law, dividends on the outstanding shares of the corporation may be declared in such amounts and at such time or times as the board may determine. Before payment of any dividend, there may be set aside out of the net profits of the corporation available for dividends such sum or sums as the board from time to time in its absolute discretion deems proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the board shall think conducive to the interests of the corporation, and the board may modify or abolish any such reserve.

ARTICLE VII - CORPORATE SEAL

The seal of the corporation shall be circular in form and bear the name of the corporation, the year of its organization and the words "Corporate Seal, New York." The seal may be used by causing it to be impressed directly on the instrument or writing to be sealed, or upon adhesive substance affixed thereto. The seal on the certificates for shares or upon any corporate obligation for the payment of money may be a facsimile, engraved or printed.

ARTICLE VIII - EXECUTION OF INSTRUMENTS

All corporate instruments and documents shall be signed or countersigned, executed, verified or acknowledged by such officer or officers or other person or persons as the board may from time to time designate.

ARTICLE IX - FISCAL YEAR

The fiscal year shall begin the first day of July in each year.

ARTICLE X - REFERENCES TO CERTIFICATE OF INCORPORATION

References to the certificate of incorporation in these by-laws shall include all amendments thereto or changes thereof unless specifically excepted.

ARTICLE XI - BY-LAW CHANGES

AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS.

(a) Except as otherwise provided in the certificate of incorporation the by-laws may be amended, repealed or adopted by vote of the holders of the shares at the time entitled to vote in the election of any directors. By-laws may also be amended, repealed or adopted by the board but any by-law adopted by the board may be amended by the shareholders entitled to vote thereon as hereinabove provided.

(b) If any by-law regulating an impending election of directors is adopted, amended or repealed by the board, there shall be set forth in the notice of the next meeting of shareholders for the election of directors the by-law so adopted, amended or repealed, together with a concise statement of the changes made

CERTIFICATE OF FORMATION OF ENERGY AND TELECOMMUNICATION SERVICES, L.L.C. A LIMITED LIABILITY COMPANY
FIRST: The name of the limited liability company is: ENERGY AND TELECOMMUNICATION SERVICES, L.L.C. SECOND: The address of its registered office in the State of Delaware is 1013 Centre Road, Wilmington, Delaware. 19805. and its registered agent is The Prentice-Hall Corporation System, Inc. IN WITNESS WHEREOF, the undersigned, being the individual forming the Company, has executed, signed and acknowledged this Certificate of Formation this 12 th day of December, A.D. 1995.
	/s/ John D. McCallum John D. McCallum Authorized Person

LIMITED LIABILITY AGREEMENT FOR ENERGY AND TELECOMMUNICATIONS SERVICES, L.L.C.
This Limited Liability Agreement (this "Agreement") is made and entered into this 27 ^th day of April, 2000, by Pepco Enterprises, Inc. ("PEI"), a Delaware Corporation.
WITNESSETH
WHEREAS, Pepco Energy Company ("PENCO"), became the sole Member following the merger on March 13, 2000 of Cove Point Energy Company ("COPE") into PENCO, and WHEREAS, on April 26, 2000, the name of PENCO was changed to Penink, Inc., and WHEREAS, subsequently on April 27, 2000 Penink, Inc. merged into PEI. NOW, THEREFORE, PEI, as sole Member, hereby amends the Operating Agreement that existed between COVE and PENCO as follows: 1. Name . The name of the Company is Energy and Telecommunications Services, L.L.C. 2. Formation . The Company was formed as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. Section 1810 1, et seq ) as amended from time to time (the Act"). 3. Term . The term of the Company commenced on December 13, 1995 with the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Act and shall continue until dissolution and termination of the Company in accordance with Section 21 hereof. 4. Purpose . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act. 5. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby authorized to: (a) acquire by purchase, lease, contribution of property or otherwise, own, hold, sell, convey, transfer or dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (b) act as a trustee, executor, nominee, bailee, director, officer, agent or in some other fiduciary capacity for any person or entity and to exercise all of the powers, duties, rights and responsibilities associated therewith; (c) take any and all actions necessary, convenient or appropriate as trustee, executor, nominee, bailee, director, officer, agent or other fiduciary, including the granting or approval of waivers, consents or amendments of rights or powers relating thereto and the execution of appropriate documents to evidence such waivers, consents or amendments; (d) operate, purchase, maintain finance, improve, own, sell, convey, assign, mortgage, lease or demolish or otherwise dispose of any real or personal property which may be necessary, convenient incidental to the accomplishment of the purpose of the Company; (e) borrow money and issue evidences of indebtedness in furtherance of any or all of the purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the Company; (f) invest any funds of the Company pending distribution or payment of the same pursuant to the provisions of this Agreement and open and maintain checking and savings accounts with banks and savings institutions; (g) prepay in whole or in part, refinance, recast, increase, modify or extend any indebtedness of the Company and, in connection therewith, execute any extensions, renewals or modifications of any mortgage or security agreement securing such indebtedness; (h) enter into, perform and carry out contracts of any kind, including, without limitation, contracts with the Member or any person or entity affiliated with the Member, necessary to, in connection with, convenient to, or incidental to the accomplishment of the purpose of the Company; (i) employ or otherwise engage employees, managers, contractors, advisors, attorneys and consultants and pay reasonable compensation for such services; (j) enter into partnerships, limited liability companies, trusts, associations, corporations or other ventures with other persons or entities in furtherance of the purpose of the Company; and (k) do such other things and engage in such other activities related to the foregoing as may be necessary, convenient or incidental to the conduct of the business of the Company, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act. 6. Principal Business Office . The principal business office of the Company shall be located at 1801 K Street, N.W., Suite 900, Washington, D.C. 20006, or any other location as may hereafter be determined by the Member. 7. Registered Office. The address of the registered office of the Company in the State of Delaware is 1013 Centre Road, Wilmington, Delaware 19805. 8. Registered Agent . The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is Corporation Service Company. 9. Member . The name and mailing address of the Member are Pepco Enterprise, Inc., 1801 K Street, N.W., Suite 900, Washington, D.C. 20006. 10. Limited Liability. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company. 11. Additional Contributions . The Member is not required to make any additional capital contribution to the Company. However, the Member may make additional capital contributions to the Company at any time. 12. Allocation of Profits and Losses . The Company's profits and losses shall be allocated to the Member. 13. Distributions. Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other applicable law. 14. Management . (a) The business and affairs of the Company shall be managed under the direction and control of a management committee (the "Management Committee"), which shall consist of at least two (2) individuals, who need not be Members. The Management Committee initially shall consist of the following persons: John D. McCallum, Chairman; Steven M. Scherer, Manager; Kevin M. McGowan, Manager; John Ng, Manager. (b) All powers of the Company shall be exercised by or under the authority of the Management Committee. Decisions of the Management Committee within its scope of authority shall be binding upon the Company and the Member. (c) Meetings of the Management Committee shall be held at the principal place of business of the Company or at any other place that a majority of the members of the Management Committee determine. In the alternative, meetings may be held by conference telephone, provided that each member of the Management Committee can hear the others. The presence of at least two (2) of the members of the Management Committee shall constitute a quorum for the transaction of business. Meetings shall be held once each month or otherwise in accordance with a schedule established by the Management Committee. In addition, any member of the Management Committee may convene a meeting thereof upon at least two (2) business days' prior written notice to the other members. The Management Committee shall act at meetings by majority vote. The Management Committee also may make decisions, without holding a meeting, by written consent of a majority of the members of the Management Committee. Minutes of each meeting and a record of each decision shall be kept by the designee of the Management Committee and shall be given to the Member promptly after the meeting or decision. (d) Except as otherwise determined by the Member, the members of the Management Committee shall serve without compensation from the Company. (e) The Member, with or without cause, at any time and from time to time and for any reason, may remove any member of the Management Committee then acting and appoint a new member of the Management Committee. 15. Officers. (a) The Management Committee may, from time to time as it deems advisable, appoint officers of the Company (the "Officers") and assign in writing titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Management Committee decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. The Officers shall be subject to the general supervision and control of the Management Committee and shall carry out the policy decisions made by the members of the Management Committee. At each regular meeting of the Management Committee (and, when requested by any member thereof, at any special meeting of the Management Committee), the President or other appropriate Officers shall be present and shall report to the Management Committee on the operations of the Company or any other matters as any member of the Management Committee may request. Any delegation pursuant to this Section 15 may be revoked at any time by the Management Committee. An Officer may be removed with or without cause by the Management Committee. (b) At the direction of the Management Committee, the President and other appropriate Officers shall have the full power to perform any act that an "authorized person" may perform under the Act, and to execute, for and on behalf of the Company, any and all documents and instruments which may be necessary to carry on the business of the Company, including, without limitation, any and all deeds, contracts, leases, mortgages, deeds of trust, promissory notes, guarantees, security agreements, and financing statements pertaining to the Company's assets or obligations. No person dealing with the President or any other Officer need inquire into the validity or propriety of any document or instrument executed in the name of the Company by the President or other Officer, or as to the authority of the President or other Officer in executing the same. (c) The Management Committee has appointed the following persons as the initial Officers: Steven M. Scherer, President and Chief Executive Officer, Joy J. Dorsey, Vice President, General Counsel and Secretary, Arun Chawla, Treasurer. 16. Other Business . The Member may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement. 17. Exculpation and Indemnification. No member of the Management Committee or Officer (each of whom is hereinafter referred to as a "Manager") shall be liable to the Company or the Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that a Manager shall be liable for any such loss, damage or claim incurred by reason of such Manager's willful misconduct. To the full extent permitted by applicable law, a Manager shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Manager by, reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that no Manager shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Manager by reason of willful misconduct with respect to such acts or omissions; provided, however , that any indemnity under this Section 17 shall be provided out of and to the extent of Company assets only, and the Member shall have no personal liability on account thereof. 18. Assignments. The Member may assign in whole or in part its interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 18, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the Member shall cease to be a member of the Company. 19. Resignation . The Member may resign from the Company; provide , that in the event of such resignation an additional member of the Company shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the Member's resignation, and, immediately following such admission, the Member shall cease to be a member of the Company. 20. Admission of Additional Members. One or more additional members of the Company may be admitted to the Company with the written consent of the Member. 21. Dissolution . (a) The Company shall have a perpetual existence; provided , however that the Company shall dissolve, and its affairs shall be wound up, upon the occurrence of either of the following: (i) the written consent of the Member, or (ii) the retirement, resignation or dissolution of the Member or the occurrence of any other event which terminates the continued membership of the Member in the Company unless the business of the Company is continued in a manner permitted by the Act. (b) The bankruptcy of the Member will not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution. (c) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act. 22. Separability of Provisions. Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal. 23. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof. 24. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws. 25. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member. IN WITNESS WHEREOF, the undersigned, intending to be legally bound thereby, has duly executed this Agreement as of the 27th of April, 2000.
	PEPCO ENTERPRISES, L.L.C. /s/ John D. McCallum John D. McCallum, Chairman

CERTIFICATE OF AMENDMENT to CERTIFICATE OF INCORPORATION of PEPCO ESI NEWCO, INC. (a Delaware corporation) Pursuant to Section 242 of the General Corporation Law of Delaware
It is hereby certified that: FIRST: In accordance with Section 141(f) and 242 of the Delaware General Corporation Law (the "DGCL"), the Board of Directors of Pepco ESI Newco, Inc. (the "Corporation") on December 19, 2000, adopted a resolution to amend the Certificate of Incorporation of the Corporation as described herein. Such amendment was declared advisable and the sole stockholder was directed to consider the amendment. SECOND: In accordance with Section 228 and 242 of the DGCL, the amendment of the Corporation's Certificate of Incorporation was duly approved by the sole stockholder of the Corporation on December 19, 2000. THIRD: The Certificate of Incorporation of the Corporation is hereby amended by striking out in its entirety ARTICLE FIRST and substituting the following:
	"FIRST: The name of the corporation is Engineered Services, Inc. (hereinafter the "Corporation")."
IN WITNESS WHEREOF, Pepco ESI Newco, Inc. has caused this Certificate to be signed in its name and on its behalf by its President this 19 ^th day of December, 2002, and its President acknowledges that this Certificate is the corporate act of the Corporation and that, to the best of his knowledge, information and belief, the matters and facts set forth herein are true in all material respects.
		PEPCO ESI NEWCO, INC. By: Robert Aylward Robert Aylward, President

CERTIFICATE OF INCORPORATION OF PEPCO ESI NEWCO, INC.
For the purpose of organizing a corporation for conducting the business and promoting the purposes hereinafter stated under the provisions, and subject to the requirements, of the General Corporation law of the State of Delaware, the undersigned, a natural person, hereby certifies that: FIRST: The name of the corporation is Pepco ESI Newco, Inc. (hereinafter the "Corporation"). SECOND: The address, including street, number, city and county of the registered office of the Corporation in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Wilmington, Delaware 19808. The name of the registered agent of the Corporation at such address is Corporation Service Company, in the county of New Castle. THIRD: The Corporation is organized under the General Corporation Law of the State of Delaware for the purposes of engaging in any unlawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The duration of the Corporation shall be perpetual. FIFTH: The Corporation has authority to issue a total of one thousand (1,000) shares of common stock, all of one class, having a par value of one dollar ($1.00) per share, for a total authorized par value capital of one thousand dollars ($1,000). SIXTH: The name and mailing address of the incorporator of the Corporation are as follows:
	Name Robert D. Earle	Mailing Address Whiteford, Taylor & Preston, L.L.P. 7 St. Paul Street, Suite 1400 Baltimore, Maryland 21202
The powers of the incorporator will terminate upon filing of this Certificate of Incorporation.
SEVENTH: The number of directors of the Corporation shall be set forth in the by-laws of the Corporation. The Board of Directors is authorized to make, alter or repeal the by-laws of the Corporation. The Board of Directors is authorized to make, alter or repeal the by-laws of the Corporation. The Board of Directors may be elected by other than written ballot. The names and mailing address of the persons who are to serve as directors of the Corporation until the first annual meeting of stockholders or until their successors are elected and qualify are as follows:
	Name	Mailing Address
	E. R. Mayberry	2000 K Street, N. W., Suite 750 Washington, D.C. 20006
	James C. McDonnell	2000 K Street, N. W., Suite 750 Washington, D.C. 20006
	Robert Aylward	6925L Oakland Mills Road Columbia, Maryland 21045
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders, any court of equitable jurisdiction within the State of Delaware may, on application of any receiver or receivers appointed for the Corporation under the provision of Section 291 of General Corporation Law of the State of Delaware, or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware, order a meeting of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing at least three-fourths in value of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders, of the Corporation, as the case may be, and also on the Corporation. NINTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, and all such liability is hereby eliminated; provided, however, that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. TENTH: The Corporation, by action of its board of directors, shall indemnify any person who was or is a director, officer, agent and/or employee of the Corporation to the fullest extent allowed under Section 145 of the General Corporation Law of the State of Delaware from and against any and all of the expenses, liabilities, or other matters referred to in or covered by such Section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action by such person in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the heirs, executors and administrators of such a person. ELEVENTH: The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware regarding business combinations with interested stockholders. TWELFTH: Any amendment of this Certificate of Incorporation shall be made and effected only in the manner set forth herein. The board of directors shall adopt a resolution, by affirmative vote of at least two-thirds (2/3) of the directors then in office, at a meeting called for that purpose, setting forth the proposed amendment, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration of such amendment or directing that the proposed amendment be considered at the next annual meeting of stockholders. In order to be adopted, each proposed amendment to this Certificate of Incorporation must be approved by the affirmative vote of a majority of the outstanding shares of each class and series, if any, entitled to vote thereon. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 27 ^th day of November, 2000.
			/s/ Robert D. Earle Robert D. Earle, Incorporator

BY-LAWS OF

Pepco ESI Newco, Inc.
(a Delaware Corporation)

November 28 , 2000

PEPCO ESI NEWCO, INC.

BY-LAWS

ARTICLE I

OFFICES

Section 1. The registered office of PEPCO ESI NEWCO, INC. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

ARTICLE II

MEETING OF STOCKHOLDERS

            Section 1.       The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a stockholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

            Section 2.       A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a stockholder or stockholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

            Section 3.       Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the stockholders of the Corporation or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the stockholders.

ARTICLE III

DIRECTORS

            Section 1.       The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be stockholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

            Section 2.       A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

            Section 3.        (a) Any director may resign at any time by giving written notice of his or her resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                   (b) Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the stockholders pursuant to Section 3 of Article II hereof.

                   (c) Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

            Section 4.        (a) As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article.

                   (b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                   (c) The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him or her at his or her residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him or her at such place by telegraph, cable wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                   (d) The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

            Section 5.       The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of stockholders. He or she shall preside at meetings of the Board and of the stockholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He or she shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he or she shall be ex-officio a member of all committees of the Board.

            Section 6.       Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

            Section 7.       Anyone or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

            Section 8.       The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or nan1es as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

            Section 9.       Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the fullest extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the fullest extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him or her. To the fullest extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the fullest extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

ARTICLE V

OFFICERS

            Section 1.       The Board of Directors, as soon as reasonably practicable after the initial election of directors by stockholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

            Section 2.       The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed-by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

            Section 3.       Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

ARTICLE VI

CERTIFICATES OF STOCK

            Section 1.       The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

            Section 2.       The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

            Section 3.       No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

ARTICLE VII

CHECKS, NOTES, CONTRACTS, ETC.

            All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

            All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

            Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

ARTICLE VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December of such year.

ARTICLE IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

			STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 05/31/2002 020350544 -3531438
STATE OF DELAWARE LIMITED LIABILITY COMPANY CERTIFICATE OF FORMATION
First:	The name of the limited liability company is Fauquier Landfill Gas, L.L.C.
Second	The address of its registered office in the State of Delaware is 2711 Centerville Road - Suite 400 in the City of Wilmington) DE 19808. The name of its Registered agent at such address is Corporation Service Company.
In Witness Whereof, the undersigned has executed this Certificate of Formation on Friday the 31 ^st day of May, 2002
		BY: /s/ WM. SHAPIRO NAME: William Dana Shapiro Authorized Person

BY-LAWS

FAUQUIER LANDFILL GAS, LLC (a Delaware Corporation)

May 30, 2002

FAUQUIER LANDFILL GAS, LLC

BY-LAWS

Article I

OFFICES

Section 1. The registered office of FAUQUIER LANDFILL GAS, LLC (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

Section 1. The annual meeting of the shareholders for the election of directors and for the transaction of such other business as may property come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding or record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Section 3. Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

Section 2. A majority of the Board shall constitute a quorum for transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present sha11, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

Section 3. (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

(b) Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof.

(c) Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

Section 4. (a) As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section of this Article.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

(c) The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

Section 5. The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

Section 6. Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

Section 7. Anyone or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 8. The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to) or is threatened to be made a party to) any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit")) whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (ill) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

Section 2. The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

Section 3. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the

authenticity of the signatures as the Corporation or its agents may reasonably require.

Section 3. No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

OPERATING AGREEMENT FAUQUIER LANDFILL GAS, L.L.C .
This Operating Agreement (the" Agreement"), dated as of the 30th day of May 2002 by and between Pepco Energy Services, Inc. ("PES"), a Delaware corporation, and Commonwealth Green Energy, LLC ("CGE") a Virginia limited liability company (each such entity being individually' referred to a "Member" and collectively as the "Members"). WHEREAS, PES and CGE have agreed to form and operate a jointly-owned company, Fauquier Landfill Gas, LLC (the "L.L.C."), to own and operate an electric generation facility fueled by methane landfill gas collected at the Fauquier County, Virginia landfill, (the "Project"), such other similar facilitates as may hereafter be agreed upon by the parties, and to undertake and perform such other lawful acts and activities as limited liability companies may engage in pursuant to the Delaware Limited Liability Company Act (the "Act"); WHEREAS, the L.C.C. has been formed pursuant to the Act by filing on the date hereof a Certificate of Formation in the office of the Secretary of State of Delaware; WHEREAS, PES and CGE desire to establish the terms under which the L.L.C. will be owned, managed and operated; NOW, THEREFORE, in consideration of the mutual covenants herein expressed, the parties hereby agree as follows: 1. Management by Members. (a) The L.L.C. shall be managed by the Members. The Members shall have the authority to (i) exercise all the powers and privileges granted by the Act or any other law or this Agreement. together with any powers incidental thereto. so far as such powers are necessary or convenient to the conduct. promotion or attainment of the business. trade. purposes or activities of the L.L.C. and (ii) take any other action not prohibited under the Act or other applicable law. (b) All decisions of the Members respecting any matter set forth herein or otherwise affecting or arising out of the conduct of the business of the L.L.C. shall be made only by unanimous action of all of the Members evidenced by a written consent signed by each Member. (c) The Members shall form a management committee ("Management Committee") of the L.L.C. which shall operate in accordance with the applicable terms of this Agreement. The Management Committee shall consist of three representative designated by PES and one representative designated by CGE. The Management Committee initially shall consist of the following persons: E. R. Mayberry, David Weiss and Ed Borroni (PES representatives) and Charles R. Foster (CGE representative). (i) All powers of the L.L.C. shall be exercised by or under the authority of the Management Committee. Decisions of the Management Committee within its scope of authority shall be binding upon the L.L.C. and the Members. (ii) Meetings of the Management Committee shall be held at the principal place of business of the L.L.C. or at any other place that the members of the Management Committee determine. In the alternative, meetings may be held by conference telephone, provided that each member of the Management Committee can hear and speak to the others. The presence of at least one PES designated and one CGE - designated member of the Management Committee shall constitute a quorum for the transaction of business. Meetings shall be held once each month, or otherwise in accordance with a schedule established by the Management Committee. In addition, any member of the Management Committee may convene a meeting thereof upon at least two (2) business days' prior written notice to the other members. The Management Committee shall act at meetings by unanimous vote. The Management Committee also may make decisions, without holding a meeting by unanimous written consent of all of the members of the Management Committee. Minutes of each meeting and a record of each decision shall be kept by the designee of the Management Committee and shall be given to the Members promptly after the meeting or decision. (iii) Except as otherwise determined by the Members, the members of the Management Committee shall serve without compensation from the L.L.C. (iv) The Members, with or without cause, at any time and from time to time and for any reason, may remove their respective representatives on the Management Committee then acting and appoint new members of the Management Committee. (v) The Management Committee may, from time to time as it deems advisable, appoint officers of the L.L.C. (the "Officers") and assign in writing titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such persons. Unless the Management Committee decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. The Officers shall be subject to the general supervision and control of the Management Committee and shall carry out the policy decisions made by the members of the Management Committee. At each regular meeting of the Management Committee (and, when requested by any member thereof, at any special meeting of the Management Committee), the President or other appropriate Officers shall be present and shall report to the Management Committee on the operations of the L.L.C. or any other matters as any member of the Management Committee may request. Any delegation of authority to the Officers may be revoked at any time by the Management Committee. An Officer may be removed at any time with or without cause by the Management Committee. (vi) At the direction of the Management Committee, the President and other appropriate Officers shall have the full power to perform any act that an "authorized person" may perform under the Act, and to execute, for and on behalf of the L.L.C., any and all documents and instruments which may be necessary to carry on the business of the L.L.C., including, without limitation, any and all deeds, contracts, leases, mortgages, deeds of trust, promissory notes, guarantees, security agreements, and financing statements pertaining to the L.L.C.'s assets or obligations. No person dealing with the President or any other Officer need inquire into the validity or propriety of any document or instrument executed in the name of the Company by the President or other Officer, or as to the authority of the President or other Officer in executing the same. (vii) The Management Committee has appointed the following persons as the initial Officers: David Weiss, President; Charles R. Foster, Vice President; Adam Chmara, Secretary; James McDonnell, Treasurer. (d) No Member shall be deemed to be a representative, an agent or an employee of any other Member, nor, unless otherwise expressly specified herein, shall any Member have any authority or right to assume or create any obligation of any kind or nature, express or implied, on behalf of, or in the name of any other Member, nor bind any other Member in any respect, without the prior written consent of such other Member. 2. The registered office of the L.L.C. in the State of Delaware shall be 2711 Centerville Road, Suite 400, Wilmington, DE 19808, or such other office (which need not be a place of business of the L.L.C.) as the Members may designate from time to time in the manner provided by law. The registered agent of the L.L.C. in the Sate of Delaware shall be Corporation Service Company or such other persons as the Members may designate from time to time in the manner provided by law. The principal office of the L.L.C. in the United States shall be 1300 North 17th Street, 16th Floor, Arlington, VA 22209, or such other place(s) as the Members may designate from time to time. 3. Purpose. The purposes of the L.L.C. shall be to own and operate an electric generating facility fueled by methane gas collected at the Fauquier County, Virginia landfill, such other similar facilities as may hereafter be agreed to by the Members upon the terms and conditions set forth in this Agreement, and such other lawful acts or activities as limited liability companies may engage in pursuant to the Act. The L.L.C. shall have all the powers permitted pursuant to the Act. 4. Capital Contributions: Capital Accounts: and Liability of Members. (a) Capital contributions may be made by any Member if agreed to by all the Members in writing and, if so made, shall be reflected on Schedule A hereto. Additional capital contributions may be made by any Member if agreed to by all the Members and shall be reflected on an amendment to Schedule A hereto. (b) Except as otherwise provided in this Section 4, no Member shall be obligated or permitted to contribute any additional capital to the L.L.C.. No interest shall accrue on any contributions to the capital of the L.L.C., and no Member shall have the right to withdraw or to be repaid any capital contributed by it or to receive any other payment in respect of its interest in the L.L.C., including, without limitation, as a result of the withdrawal or resignation of such Member from the L.L.C., except as specifically provided in this Agreement. (c) A separate capital account (a "Capital Account") shall be established for each Member, and shall be maintained in accordance with applicable regulations under the Internal Revenue Code of 1986, as amended (the "Code"). To the extent consistent with such regulations, there shall be credited to each Member's capital account the amount of any contribution of capital made by such Member to the L.L.C. plus such Member's share of the net profits of the L.L.C. (including income and gain exempt from tax), and there shall be charged against each Member's capital account the amount of all distributions to such Member plus such Member's share of the net losses of the L.L.C. (including allocations of L.L.C. expenditures described in Code Section 705(a)(2)(B)). (d) The liability of the Members for the losses, debts and obligations of the L.L.C. shall be limited to their capital contributions. No Member, in his, her or its capacity as a Member, shall have any liability to restore any negative balance in his, her, or its Capital Account. In no event shall any Member, in his, her, or its capacity as a Member, be personally liable for any liabilities or obligations of the L.L.C.. (e) All assets of the L.L.C. are property of the L.L.C. and no Member shall have severable rights or interests in such property except by agreement of all of the Members. 5. Return of Contributions . The contribution of each Member is to be returned to such Member only upon the termination and liquidation of the L.L.C., but contributions may be returned prior to such time if agreed upon by all Members. 6. Share of Profits and Other Items. (a) The net profits, net losses, net cash flow and net proceeds of any sales or refinancing of any property of the L.L.C. or upon liquidation of the L.L.C. shall be allocated among the Members according to the percentage interests of each Member as set forth on Schedule A unless specifically modified therein. Subject to the foregoing, distributions to the Members shall be made at such times and in such amounts as the Members unanimously shall agree. (b) For tax purposes, all items of depreciation, gain, loss, deduction or credit shall be determined in accordance with the Code, and except to the extent otherwise required by the Code, allocated to and among the Members the same percentages in which the Members share in net profits and net losses unless specifically modified in Schedule A. 7. Transfers of a Member's Interest . No Member may sell, assign, give, pledge, hypothecate, encumber or otherwise transfer, including, without limitation, any assignment or transfer by operation of law or by order of court, such Member's interest in the L.L.C. or any part thereof, without the unanimous written consent of all of the Members (excluding the Member transferring its interest), which consent shall be within each Member's sole discretion, and any purported assignment without such consent shall be null and void and of no effect whatsoever. 8. Admission of Additional Members . No person or entity, including any transferee or holder by operation of law or the interest of a Member, may be admitted to the L.L.C. as a Member, except with the consent of all the Members in their sole discretion. 9. Priorities . No Member shall have any rights or priority over any other Members as to contributions or as to distributions or compensation by way of income. 10. Dissolution of L.L.C . The L.L.C. shall terminate upon the first to occur of the events described in Section 18-801 of the Act. The Members may continue the business of the L.L.C. upon the occurrence of any event which constitutes an event of dissolution of the L.L.C. under the Act by electing to do so within 90 days after the occurrence of any such event. Any such election shall be made by the Members (excluding the Member that caused the event of dissolution) in accordance with Section I (b) of this Agreement. In the event of such termination. the L.L.C. shall be dissolved and wound-up and its assets shall be liquidated and distributed in the following order of priority: (i) to pay or make provision for the payment of liabilities owed to creditors and (ii) distributed to the Members in proportion to their positive Capital Account balances. 11. Termination of Membership: Return of Capital . No Member may terminate his, her or its membership in the L.L.C. or have any right to distributions respecting his, her or its membership interest (upon withdrawal or resignation of the L.L.C. or otherwise) except as expressly set forth herein. No Member shall have the right to demand or receive property other than cash in return for such Member's contribution. 12. Books and Records: Bank Accounts . (a) The Members shall cause the L.L.C. to keep just and true books of account with respect to the operations of the L.L.C. Such books shall be maintained at the principal place of business of the L.L.C., or at such other place as the Members shall determine, and all Members and their duly authorized representatives shall at all reasonable times have access to such books. (b) Such books shall be kept in accordance with generally accepted accounting principles and shall have a December 31 fiscal year end. An income statement and balance sheet shall be prepared monthly and provided to Members no later than 20 days from the end of the prior month. Audited financial statements including footnotes shall be provided to the Members within 60 days of the fiscal year end. The audit shall be performed by a nationally recognized firm agreed upon by the Members at the expense of the L.L.C. (c) Bank Accounts. The L.L.C. shall maintain appropriate accounts at one or more financial institutions approved by the Members Committee for all funds of the L.L.C. Such accounts shall be used solely on the business of the L.L.C. Withdrawals or transfers from such accounts shall be made only upon the approval of those persons authorized in writing by the Members. (d) PES shall be the "tax matters partner" of the L.L.C. for purposes of the Code. Unless otherwise required by the Code, or Treasury Regulations, the "tax matters partner" of the L.L.C. shall act (or refrain from acting) on behalf of the L.L.C. in accordance with the directions of the Members, and shall make no election, declaration or statement, settle or compromise any audit matter or dispute, or execute or file any tax return, tax filing or other document on behalf of tl1e L.L.C. without the prior approval of the Members. (e) The parties agree that the L.L.C. shall pay to PES the sum of $1,200.00 on the last business day of each year beginning in the year 2002 (or such other amounts as hereafter may be agreed upon by the Members) as fair and reasonable compensation for acting as the "tax matters partners" and assisting the L.L.C. in preparing and maintaining its books of account and its monthly and annual financial statements. 13. Indemnity; Other Business. (a) Subject to paragraph (c) below, the L.L.C. shall indemnify, defend and hold harmless any natural person, corporation, limited liability company, general partnership, limited liability partnership, venture, trust, business trust, estate or other entity (a "Person") who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or on behalf of a Member), by reason of the fact that he is or was a member, manager, employee or officer of the L.L.C., or is or was an officer of the L.L.C. serving at the request of the L.L.C. as a manger, director, officer, employee or agent of another entity against expenses (including reasonable attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the L.L.C., and, with respect to any 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, shall not, of itself, create a presumption that the Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the L.L.C., and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) Subject to paragraph (c) below, the L.L.C. shall indemnify any Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action. suit or proceeding by or on behalf of a Member to procure a judgment in its favor by reason of the fact that he is or was a member. manager. employee or officer of the L.L.C.. or is or was an officer of the L.L.C. serving at the request of the L.L.C. as a manager. director, officer, employee or agent of another entity against expenses (including reasonable attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the L.L.C.; except that no indemnification shall be made in respect of any claim, issue or matter as to which such Person shall have been adjudged to be liable unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjunction of liability but in view of all the circumstances of the case, such Person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. (c) Any indemnification under this Section 13 (unless ordered by a court) shall be made by the L.L.C. only as authorized in the specific case upon a determination that indemnification of the member, manager, employee or officer is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraphs (a) or (b) above. Such determination shall be made (i) by a majority vote of the disinterested Members on the Members' Committee, or (ii) if the Members' Committee so directs, by independent legal counsel in a written opinion. Notwithstanding the foregoing, to the extent, however, that a representative or officer of the L.L.C. has been successful on the merits or otherwise in defense of any action, suit or processing described above, or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including reasonable attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case. (d) For purposes of any determination under this Section 13, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the L.L.C., or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the L:L.C. or another enterprise, or on information supplied to him by the officers of the L.L.C. or another enterprise or on information or records given or reports made to the L.L.C. or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the L.L.C. or another enterprise. The term "another enterprise" as used in this paragraph (d) shall mean any entity which such person is or was serving at the request of the L.L.C. (e) Notwithstanding the foregoing, any member, manager, employee or officer may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under paragraphs (a) and (b) above by reason of the fact that he has met the applicable standard of conduct. If successful, in whole or in part, the representative or officer seeking indemnification shall also be entitled to be paid the expenses of prosecuting such application. (f) Expenses incurred by a member, manager, employee or officer in defending or investigating a threatened or pending actiont suit, or proceeding shall be paid by the L.L.C. in advance of the final disposition thereof upon receipt of an undertaking to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the L.L.C. as authorized in this Section 13. (g) The indemnification and advancement of expenses in this Section 13 shall not be deemed exclusive of any other rights which may apply, it being the policy of the L.L.C. that indemnification of the persons specified in the paragraphs (a) and (b) above shall be made to the fullest extent permitted by law. The provisions of this Section 13 shall not preclude the indemnification of any person who is not specified herein but whom the L.L.C. has the power or obligation to indemnify under the Act, or otherwise. (h) The L.L.C. may purchase and maintain insurance on behalf of the persons specified in paragraph (a) above against any liability asserted against them and incurred by them in any such capacity. or arising out of their status as such, whether or not the L.L.C. would have the power or the obligation to indemnify them under this Section 13. (i) The indemnification and advancement of expenses provided by this Section 13 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a member, manager, employee or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. (j) Except for proceedings to enforce rights to indemnification (which shall be governed by paragraph (e) above), the L.L.C. shall not be obligated to indemnify any representative or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by all the Members. 14. Developer Cash Advance and Fee . (a) The parties agree that the L.L.C. shall pay to CGE an advance against future earnings of the Project of $40,000 (the "Advance") and an additional cash fee of $60,000 as full and complete compensation to CGE for work in developing the Project. (the "Fee") The advance shall be repaid and retired at an amount not to exceed $8,000 per year until such time as the Advance is fully repaid and retired. The parties agree that this Advance shall be repaid and retired if at all, from CGE's share of the earnings of the LLC and is not a debt, warrant, or any other sort of financial instrument that would suggest a financial obligation by CGE to either PES, the L.L.C., or to any other person. The parties agree that any distribution that CGE may receive pursuant to this Agreement shall be reduced by an amount not to exceed $8,000 per year until such time as the Advance is fully repaid and retired. (b) The Advance and the Fee shall be paid only in accordance with the following schedule:
-	Upon signing of contract with Fauquier County			$40,000 Advance and $30,000 Fee
-	Upon commencement of construction			$20,000 Fee
-	Upon substantial completion of construction			$ 5.000 Fee
-	Upon completion of construction/project start-up			$ 5.000 Fee
15. Design. Construction. Operation and Maintenance Fees . (a) The parties agree that PES may, if it elects to do so, perfoml any or all design, construction, operations and maintenance work associated with the Project and such other similar facilities as may hereafter be agreed upon (the "Work"). (b) The parties agree that the Work associated with the Project shall be charged monthly be PES to the L.L.C. at PES' actual out-of-pocket costs (including reasonable contingency and overhead) plus 10% profit. 16. Miscellaneous . (a) Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of all the Members. (b) All covenants and agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not. This Agreement and the rights and obligations of the parties hereto may not be assigned by any of the parties hereto without the prior written consent of the oilier parties. (c) This Agreement may be executed simultaneously in counterparts, anyone of which need not contain the signatures of more than one party. but all such counterparts taken together will constitute one and the same Agreement. (d) The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. (e) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to conflicts of law principles. (f) All notices, requests or other communications hereunder shall be deemed duly delivered, given or made to or upon any party hereto if in writing and delivered by hand against receipt, or by certified or registered mail, postage prepaid, return receipt requested, or to a courier who guarantees next business day delivery or sent by facsimile (with confirmation), to any such party at its address set forth below or to such other addresses as such party may at any time, or from time to time, direct by notice given accordance with this Paragraph 14(f).
(i)		If to PES: David Weiss, President Performance Management Group Pepco Energy Services, Inc. 1300 North 17 ^th Street, 16 ^th Floor Arlington, VA. 22209 Fax: 703-253-1799
(ii)		If to CGE: Charles R. Foster, III, President Commonwealth Green Energy. LLC Box 1017 Warrenton, VA 20188 Fax: 540-347-0408
The date of delivery of any such notice, request or other communication shall be the earlier of (i) the dates of actual receipt or (ii) three business days after such notice, request or other communication is sent if sent by certified or registered mail with return receipt requested (ill) if sent by courier who guarantees next business day delivery the business day next following the day such notice, request, or other communication is actually delivered to courier or (iv) the day of confirmation of receipt if by facsimile. (g) This Agreement has been negotiated and prepared by each of PES and CGE, and if any provision of this Agreement requires judicial interpretation, the court interpreting or construing the provision shall not apply the rule of construction that a document is to be construed more strictly against the party who prepared the documents. IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as of the date first set forth above.
			PEPCO ENERGY SERVICES, INC. By: /s/ David Weiss Name: David Weiss Title: President - Performance Management Group
			COMMONWEALTH GREEN ENERGY, LLC By: /s/ Charles R. Foster Name: Charles R. Foster, III Title: President

SCHEDULE A TO PES/CGE L.L.C. OPERATING AGREEMENT Date: May 30, 2002 MEMBERS
NAMES AND ADDRESSES OF MEMBERS	CUMULATIVE CAPITAL CONTRIBUTION	PERCENTAGE OF INTEREST
PES Landfill Gas Corporation	$ 1,630,959	75%
Commonwealth Green Energy, LLC	$ 543,653	25%
Section 29/45 Tax Credits Tax credits provided under Section 29 and/or Section 45 of the Internal Revenue Code of 1986, as amended, if and/or when available, shall be shared equally among the Members. Emission Credits Credits obtained by the L.L.C. for avoided emission of gases with the exception of carbon dioxide shall be split in accordance with each Member's respective percentage of interest as noted above. Carbon dioxide emission credits, if and/ or when available, shall be split equally among the Members

BYLAWS

OF

FRIENDLY SKIES, INC.

ARTICLE I

OFFICES

SECTION 1. PRINCIPAL OFFICE. The principal office of the corporation shall be 5 Kronprindsens Gade, Charlotte Amalie, St.Thomas, U.S. Virgin Islands.

SECTION 2. OTHER OFFICES. The corporation may have such other offices and places of business, within or without the U.S. Virgin Islands, as shall be determined by the directors.

ARTICLE II

MEETINGS OF STOCKHOLDERS

          SECTION 1.      PLACE OF MEETINGS. Meetings of the stockholders may be held at such place or places, within or without the U.S. Virgin Islands, as shall be fixed by the directors and stated in the notice of the meeting.

          SECTION 2.      ANNUAL MEETING. The annual meeting of stockholders shall be held on a date to be determined by the directors each year at the principal office of the corporation, or such other location as may be designated in the notice of such meeting, or if such day be a legal holiday then on the first business day following, for the election of directors and for the transaction of such other business as may properly come before the meeting.

          SECTION 3.      NOTICE OF ANNUAL MEETING. Notice of the time and place of holding such annual meeting shall be given either personally or by mailing, not less than ten (10) nor more than forty (40) days before such meeting, postage prepaid, by a notice of such meeting in writing signed by the President or a Vice-President or the Secretary or Assistant Secretary, directed to each stockholder of record entitled to vote at such meeting, at his address as it appears on the stock register of the corporation, unless he shall have filed with the Secretary of the corporation a written request that notices intended for him be mailed to the address designated in such request. Such notice shall briefly state the business to be transacted at the meeting. Any and all notices of the meeting may be waived in writing by any stockholder.

          SECTION 4.      QUORUM. The presence of the holders of a majority of the stock issued and outstanding entitled to vote, present in person or represented by proxy shall constitute a quorum at all meetings of stockholders for the transaction of business, except as otherwise provided by law. If such majority shall not be present or represented, those present in person or by proxy shall have the power to adjourn the meeting.

          SECTION 5.      SPECIAL MEETINGS. The special meetings of stockholders for any purpose or purposes may be called by any member of the Board of Directors or by the President, and shall be called by the President or the Secretary at the request in writing by the stockholders of record owning a majority of the stock of the entire capital stock of the corporation issued and outstanding.

          SECTION 6.      NOTICE OF SPECIAL MEETINGS. Written notice of a special meeting of the stockholders stating the time, place and object thereof, shall be served either personally or by mailing in the same manner as the annual meeting. Stockholders entitled, to vote at an annual meeting may vote at a special meeting. Any and all notices of the meeting may be waived in writing by any stockholders.

          SECTION 7.      MEETING PROTOCOL. All meetings shall be presided over by the President, or by any director in his absence. At the annual meeting, the order of business shall be as follows:

1.      Calling roll of persons entitled to vote.
2.      Proof of notice of meetings.
3.      Reading of the minutes of previous meetings.
4.      Reports of various officers.
5.      Reports of committees.
6.      Election of directors.
7.      New business.

          SECTION 8.      VOTING. At meetings of stockholders, only such persons shall be entitled to vote in person or by proxy who appear as stockholders upon the transfer books of the corporation for twenty (20) days immediately preceding such meeting.

          SECTION 9.      ACTION BY WRITTEN CONSENT OF STOCKHOLDERS. Whenever by any provision of statute or of the Articles of Incorporation or of these By Laws, the vote of stockholders at a meeting thereof is required or permitted to be taken in connection with any corporate action, the meeting and vote of stockholders may be dispensed with, if all the stockholders who would have been entitled to vote upon the action if such meeting were held, shall consent in writing to such corporate action being taken.

ARTICLE III

DIRECTORS AND OFFICERS

          SECTION 1.      NUMBER. The affairs of this corporation shall be managed by a Board of Directors who need not be stockholders. Directors shall be five in number. The number of directors may be amended from time to time by amendment to the By-Laws of the Corporation as provided in Article X hereof. They shall be elected at the annual meeting of stockholders to serve for one (1) year and until successors shall be elected and qualified. The directors shall be chosen by a majority vote of the stockholders voting in person or by proxy at such election.

          SECTION 2.      VACANCIES. Vacancies in the Board of Directors occurring during the year shall be filled for the unexpired term by a majority vote of the remaining directors at any special meeting called for that purpose or at any regular meeting of the Board. Whenever the number of directors shall be increased pursuant to law, such increase shall be deemed to create vacancies in the Board and be filled in the manner prescribed herein.

          SECTION 3.      REMOVAL. The stockholders may at a special meeting called for such purpose by a majority vote, remove any director with or without cause at any time whether or not the term for which such director was originally elected had expired, and may also elect another director to fill such vacancy.

          SECTION 4.      MEETINGS. Regular meetings of the Board may be held without notice at such time and place both within and without the Virgin Islands as shall from time to time be determined by the Board.

          SECTION 5.      SPECIAL MEETINGS. Special meetings of the Board shall be called by the President or Secretary upon three (3) days' notice in writing on the written request of any director.

          SECTION 6.      QUORUM. At all meetings of the Board, the presence of the greater of two directors or one-third of the directors then in office shall be necessary to constitute a quorum and sufficient for the transaction of business, but in the event of a quorum not being present, a lesser number may adjourn the meeting to some future time.

          SECTION 7.      POWERS. The Board of Directors immediately after the annual meeting of stockholders shall choose a President, who shall be from among their own number, and a Secretary and Treasurer and such other officer, or officers, as they shall establish who need not be members of the Board. Any two offices (but not more than two), other than those of the President and Secretary, may be held by the same person.

          The Board of Directors shall have charge of the management of all the affairs of the corporation, appoint all committees, and all their acts shall require a majority vote of the members of the Board of Directors present and voting at any meeting thereof.

          The Board of Directors may adopt such rules and regulations for the conduct of their meetings and management of the affairs of the corporation as may be deemed to be proper, and not inconsistent with the laws of the Virgin Islands, or the laws of any country, state or municipality which may be applicable thereto or these By-Laws.

          In addition to the powers of these By-Laws expressly conferred upon them, the Board may exercise such powers and do such lawful acts and things as are not by statute or by the Articles of Incorporation or by these By-Laws required to be exercised by the stockholders.

          SECTION 8.      VOTING. At all meetings of the Board of Directors, each director is to have one vote irrespective of the number of shares of stock he may hold.

          SECTION 9.      REMUNERATION. The remuneration of the Board of Directors shall from time to time be determined by the stockholders of the corporation at the annual meeting. Such remuneration shall be deemed to accrue from day to day. The directors may also be paid all traveling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Board of Directors or of the stockholders of the corporation or in connection with the business of the corporation; provided that nothing herein contained shall be construed to preclude any director or his firm from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees and others who attend, pursuant to direction made by vote of the Board, may be allowed a fixed sum and expenses for attending committee meetings.

          SECTION 10.      ACTION BY WRITTEN CONSENT. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all the members of the Board of Directors consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consent thereto by the members of the Board of Directors shall be filed with the minutes of the proceedings of the Board of Directors.

ARTICLE IV

OFFICERS AND POWERS OF OFFICERS

          SECTION 1.      OFFICERS. Officers of the corporation shall be a President, Secretary and Treasurer, who shall hold office for one year and until their successors are chosen and qualify in their stead. The President shall be a director of the corporation. Any two offices (but not more than two), other than those of the President and Secretary, may be held by the same person. Any officer elected or appointed by the Board of Directors may be removed at any time by an affirmative vote of a majority of the Board of Directors. The Board of Directors may at any time that they shall deem advisable, establish additional officerships to those named herein and elect persons to fill such officerships as hereinafter provided, and such officers shall hold said offices under the same provisions as provided with respect to the officership specifically named herein.

          SECTION 2.      THE PRESIDENT. The President shall be the executive officer of the Corporation. He shall preside at all meetings of the stockholders and directors and shall sign such contracts and papers as are requisite for the proper conduct of the corporation's business.

          SECTION 3.      VICE-PRESIDENTS. Vice-Presidents, in the absence or disability of the President, may perform the duties and exercise the powers of the President and shall perform such other duties as may be imposed upon them by the Board.

          SECTION 4.      THE SECRETARY. The Secretary shall attend all sessions of the Board and all meetings of stockholders, and record all votes and the minutes of all proceedings in a book to be kept for that purpose. He shall cause to be given notice of all meetings of stockholders and directors and shall perform such other duties as appertain to this office. He shall keep in safe custody the seal of the corporation and, when authorized by the Board of Directors, affix it when required to any instrument. He shall be transfer agent for the transfer of all certificates of stock.

          SECTION 5.      THE TREASURER. The Treasurer shall have the custody of all the corporation's funds and securities, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation, in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board, taking proper vouchers for disbursements, and shall render to the President and directors at the regular meeting of the Board or whenever they may require it, an account of all his transactions as Treasurer, and of the financial condition of the corporation.

          SECTION 6.      VACANCIES. If any office becomes vacant for any reason during the term thereof, the directors in office, although less than a quorum, by a majority vote may appoint a qualified successor who shall hold office for the unexpired term.

          SECTION 7.      DELEGATION OF DUTIES. Duties of officers may be delegated in case of the absence of any officer of the corporation or for any other reason that the Board of Directors may deem sufficient. The Board may delegate the powers or duties of such officer to any other officer or to any director for the time being, provided a majority of the entire Board concurs therein.

          SECTION 8.      REMUNERATION. The officers shall receive such salary or compensation as may be determined and fixed by the Board of Directors.

ARTICLE V

CERTIFICATES AND TRANSFER OF STOCK

          SECTION 1.      FORM AND EXECUTION OF CERTIFICATES. The certificates of stock of the corporation shall be numbered and registered as they are issued. They shall exhibit the holder's name and the number of shares. They shall be signed by the President or Vice-President, Secretary or Treasurer, and sealed with the seal of the corporation.

          SECTION 2.      TRANSFERS. Transfers of stock shall be made on the books of the corporation by the person named in the certificate, or by his attorney lawfully constituted, and upon surrender of such certificate, such surrender of stock shall be entered on the stock books of the corporation which shall be kept at its principal office in the Virgin Islands.

          SECTION 3.      RECORD DATE. The transfer books by resolution of the Board of Directors may be closed for a period not exceeding fifty (50) days prior to any meeting of the stockholders, or the day appointed for the payment of a dividend. No transfer shall be made upon the books of the corporation within twenty (20) days next preceding the annual meeting of stockholders.

ARTICLE VI

VOTING

Every proxy must be executed in writing by the stockholder himself or by his duly authorized attorney. No proxy shall be valid after the expiration of one (1) year from the date of its execution unless it shall have specified therein the length of time it is to continue in force, which shall be for some limited period. Every proxy shall be revocable by the person executing it.

ARTICLE VII

DIVIDENDS

SECTION 1. The directors may declare dividends out of the profits of the corporation at such times and in such amounts as the Board of Directors may by a majority vote from time to time designate.

SECTION 2. Before payment of any dividend or making any distribution of profits, there may be set aside out of the net profits of the corporation such sum or sums as the directors from time to time in their absolute discretion think proper as a reserve fund to meet contingencies or for equalizing dividends or for repairing or maintaining any property of the corporation or for such other purposes as the Board of Directors shall think conducive to the interests of the corporation.

ARTICLE VIII

REGISTERED STOCKHOLDERS

The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the Virgin Islands.

ARTICLE IX

BILLS, NOTES, ETC.

All bills, notes payable, checks or other negotiable instruments of the corporation shall be made in the name of the corporation and shall be signed by such officer or officers as the Board of Directors may from time to time designate, and the funds of the corporation shall be deposited in such depositories, banks or trust companies as the Board of Directors may designate from time to time.

ARTICLE X

AMENDMENTS

These By-Laws may be amended by a majority vote of all of the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided that notice of intention to amend shall have been contained in the notice of the meeting, or by the majority vote of all directors present at a meeting of the Board of Directors called for that purpose.

ARTICLE XI

WAIVER OF NOTICE

SECTION 1. Any stockholder, director or officer may waive any notice required to be given under these By-Laws, in writing, by telegram, telex, cable or radiogram, and the presence of any person at a meeting shall constitute waiver of notice thereof as to such person.

SECTION 2. Whenever under the provisions of these By-Laws, notice is required to be given to any stockholder, director or officer, it shall not be construed to mean personal notice, but such notice may be given in writing by depositing the same in a post office or letter box in a postpaid sealed wrapper addressed to such stockholder, director or officer at such address as appears on the books of the corporation and such notice shall be deemed to have been given ten days after the time when the same was thus mailed.

ARTICLE XII

INDEMNIFICATION OF DIRECTORS AND OFFICERS

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

          SECTION B.      The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for misfeasance or nonfeasance in the performance of the person's duty to the Corporation unless and only to the extent that, despite the adjudication of liability but in view of all circumstances of the case, such person fairly and equitably merits indemnification.

          SECTION C.      To the extent that a person who may be entitled to indemnification by the Corporation under this section is or has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, the Person shall be indemnified against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection therewith.

          SECTION D.      Any indemnification under subsections (a) and (b) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsection (a) or (b). Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs, by either independent legal counsel in a written opinion, or the stockholders, or (iii) if required by law, by the court in which such action, suit or proceeding was brought or another court of competent jurisdiction.

          SECTION E.      Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding if such payment is authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Corporation as authorized in this section.

          SECTION F.      The indemnification provided by this section shall not be deemed exclusive of. any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person.

          SECTION G.      The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the Corporation would have the power to indemnify the person against such liability under the provisions of this section.

          SECTION H.      For the purposes of this section, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity.

          SECTION I.      The provisions of this section shall apply to the estate, executors, administrators, heirs, legatees or devisees of a person entitled to indemnification hereunder and the term "person," where used in the section shall include the estate, executors, administrators, heirs, legatees or devisees of such person.

ARTICLE XIII

SEAL

The seal of the corporation shall be in the form of a circle and shall bear the name of the corporation and the year of its incorporation.

ARTICLE XIV

LOST CERTIFICATES

Any person claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of that fact and advertise the same in such manner as the Board of Directors may require and shall, if the directors so require, give the corporation a bond of indemnity in form and with one or more sureties satisfactory to the Board of Directors in at least double the value of the stock represented by the said certificates, whereupon a new certificate may be issued of the same tenor and for the same number as the one alleged to be lost or destroyed.

ARTICLE XV

FISCAL YEAR

The fiscal year of the corporation shall end on such date as may be set from time to time by the directors of the corporation.

ARTICLES OF INCORPORATION OF FRIENDLY SKIES, INC.
WE, THE UNDERSIGNED, in order to form a corporation pursuant to the provisions of the Virgin Islands Code, do hereby certify as follows: FIRST: The name of the corporation is Friendly Skies, Inc. SECOND: The purposes for which the corporation is formed are: To act as a foreign sales corporation for purposes of Title 13, Chapter 12 of the Virgin Islands Code. To buy, sell, rent, lease, exchange, let for hire, import, deal and trade in all kinds of articles and things which may be required by said business, or commonly supplied or dealt in by persons engaged in such business, or which may seem capable of being profitably dealt with in connection with the said business. To perform services related and subsidiary to the sale or lease of export property, render engineering and architectural services, and to provide export management services. To purchase, lease or otherwise acquire and to hold, own, sell, or dispose of real and personal property of all kinds and in particular, lands, buildings, business concerns and undertakings, shares of stock, mortgages, bonds, debentures and other securities, merchandise, book debts and claims, trademarks, trade names, patents and patent rights, copyrights and any interest in real or personal property. To borrow money for its corporate purposes, and to make, accept, endorse, execute and issue promissory notes, bonds, debentures or other obligations from time to time for any purpose in or about the business of the company, and, if deemed proper, to secure the payment of any such obligations by mortgage, pledge, deed of trust or otherwise. To acquire, and to take over as a going concern and thereafter to carry on the business of any persons, firms or corporations engaged in any business which this corporation is authorized to carry on, and in connection therewith to acquire the good will and all or any of the assets and to assume or otherwise provide for all or any of the liabilities of any such business. To sell, manage, lease, mortgage, dispose of or deal with all or any part of the property of the company. To carry on business at any place or places within the jurisdiction of the United States, in any possession of the United States, and in any and all foreign countries, and to purchase, hold, mortgage, convey, lease or otherwise dispose of and deal with real and personal property at any such place or places. To undertake any other lawful act or activity for which corporations may be organized under the Virgin Islands Code. THIRD: The total number of shares which the corporation is authorized to issue is one thousand (1,000) shares all of which shall be common stock without par value. FOURTH: The minimum amount of capital at the commencement of business shall be one thousand dollars ($1,000.00). FIFTH: The location of the principal office of the corporation shall be 5 Kronprindsens Gade, Charlotte Amalie, St. Thomas, U.S. Virgin Islands and the name of the resident agent in charge thereof is CITCO St. Thomas Inc. SIXTH: The duration of the corporation is unlimited. SEVENTH: The number of directors of the corporation shall be as stated in the by-laws, but in no case shall the number be less than three. EIGHTH: The names and residences of the incorporators are as follows: NAME RESIDENCE Ms. Angela Grant 7J Estate Nadir St. Thomas, Virgin Islands Ms. Sherna Spencer Kirwan Terrace Bldg. 20 Apt. 118 St. Thomas, Virgin Islands Ms. Shauna Spencer Kirwan Terrace Bldg. 20 Apt. 118 St. Thomas, Virgin Islands NINTH: The following provisions are included in these Articles of Incorporation for the purpose of regulating the business and the conduct of the affairs of the corporation, provided, however, that nothing herein contained shall deem to authorize the corporation to carry on any business or conduct its affairs in any way contrary to the laws under which the corporation is organized. All corporate powers except those which by law expressly require the consent of the shareholders shall be exercised by the Board of Directors. The Board of Directors shall have power from time to time to fix and determine and vary the amount of the working capital of the corporation and to direct and determine the use and disposition of any surplus or net profits over and above capital stock paid in, and in its discretion, the Board of Directors may use and apply any such surplus or accumulated profits in purchasing or acquiring bonds or other obligations of the corporation or shares of its own capital stock, to such extent and in such manner and upon such terms as the Board of Directors shall deem expedient. Election of directors need not be by ballot. Meetings of the Board of Directors may be held either within or without the Virgin Islands. Subject always to by-laws made by the shareholders, the Board of Directors may make by-laws and from time to time may alter, amend or repeal any by-laws, but any by-laws made by the Board of Directors may be altered or repealed by the shareholders. IN WITNESS WHEREOF, we have executed these Articles of Incorporation in triplicate this 3rd day of May, 1995.
	/s/ Angela Grant Ms. Angela Grant /s/ Sherna Spencer Ms. Sherna Spencer /s/ Shauna Spencer Ms. Shauna Spencer
TERRITORY OF THE VIRGIN ISLANDS) ) ) ) ss: JUDICIAL DISTRICT OF ST.THOMAS AND ST. JOHN) BE IT REMEMBERED that on this 3rd day of May, 1995, personally came before me, a Notary Public in and for the Territory aforesaid, Ms. Angela Grant, Ms. Sherna Spencer, and Ms. Shauna Spencer, parties to the foregoing Articles of Incorporation, known to me personally to be such, and severally acknowledged the said certificate to be the acts and deed of the signers respectively, and that the facts therein stated are truly set forth. Given under my hand and seal of office the day and year aforesaid.
	/s/ Terri Todman Notary Public

[Filed on 12/05/2000]
CERTIFICATE OF INCORPORATION OF PEPCO G&L NEWCO, INC.
For the purpose of organizing a corporation for conducting the business and promoting the purposes hereinafter stated under the provisions, and subject to the requirements, of the General Corporation law of the State of Delaware, the undersigned, a natural person, hereby certifies that: FIRST : The name of the corporation is Pepco G&L Newco, Inc. (hereinafter the "Corporation"). SECOND : The address, including street, number, city and county of the registered office of the Corporation in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Wilmington, Delaware 19808. The name of the registered agent of the Corporation at such address is Corporation Service Company, in the county of New Castle. THIRD : The Corporation if organized under the General Corporation Law of the State of Delaware for the purposes of engaging in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH : The duration of the Corporation shall be perpetual. FITTH : The Corporation has authority to issue a total of one thousand (1,000) share of common stock, all of one class, having a par value of one dollar ($1.00) per share, for a total authorized par value capital of one thousand dollars ($1,000). SIXTH : The name and mailing address of the incorporator of the Corporation are as follows:
	Name Robert D. Earle		Mailing Address Whiteford, Taylor & Preston L.L.P. 7St. Paul Street, Suite 1400 Baltimore, Maryland 21202
The powers of the incorporator will terminate upon filing of this Certificate of Incorporation. SEVENTH : The number of directors of the Corporation shall be set forth in the by-laws of the Corporation, which number may be increased or decreased pursuant to the by-laws of the Corporation. The Board of Directors is authorized to make, alter or repeal the by-laws of the Corporation. The Board of Directors may be elected by other than written ballot. The names and mailing address of the persons who are to serve as directors of the Corporation until the first annual meeting of stockholders or until their successors are elected and qualify are as follows:
	Name E. R. Mayberry		Mailing Address 2000 K Street, N. W., Suite 750 Washington, D.C. 20006
	James C. McDonnell		2000 K Street, N. W., Suite 750 Washington, D.C. 20006
	Robert Aylward		6925L Oakland Mills Road Columbia, Maryland 21045
EIGHTH : Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for the Corporation under the provision of Section 291 of General Corporation Law of the State of Delaware, or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware, order a meeting of the creditors or class of creditors, and/or of the stockholder of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing at least three-fourths in value of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders, of the Corporation, as the case may be, and also on the Corporation. NINTH : No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, and all such liability is hereby eliminated; provided, however, that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. TENTH : The Corporation, by action of its board of directors, shall indemnify any person who was or is a director, officer, agent and/or employee of the Corporation to the fullest extent allowed under Section 145 of the General Corporation Law of the State of Delaware from and against any and all of the expenses, liabilities, or other matters referred to in or covered by such Section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action by such person in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the heirs, executors and administrators of such person. ELEVENTH : The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware regarding business combinations with interested stockholders. TWELFTH : Any amendment of this Certificate of Incorporation shall be made and effected only in the manner set forth herein. The board of directors shall adopt a resolution, by affirmative vote of at least two-thirds (2/3) of the directors then in office, at a meeting called for that purpose, setting forth the proposed amendment, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration of such amendment or directing that the proposed amendment to this Certificate of Incorporation must be approved by the affirmative vote of a majority of the outstanding shares of each class and series, if any, entitled to vote thereon. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and according, have hereunto set my hand this 5 ^th day of December, 2000.
		/s/ ROBERT D. EARLE Robert D. Earle, Incorporator

		[Filed January 5, 2001
CERTIFICATE OF AMENDMENT to CERTIFICATE OF INCORPORATION of PEPCO G&L NEWCO, INC. (a Delaware corporation) Pursuant to Section 242 of the General Corporation Law of Delaware
It is hereby certified that: FIRST : In accordance with Section 141(f) and 242 of the Delaware General Corporation Law (the "DGCL"), the Board of Directors of Pepco G&L Newco, Inc. (the "Corporation") on January 2, 2001, adopted a resolution to amend the Certificate of Incorporation of the Corporation as described herein. Such amendment was declared advisable and the sole stockholder was directed to consider the amendment. SECOND : In accordance with Section 228 and 242 of the DGCL, the amendment of the Corporation's Certificate of Incorporation was duly approved by the sole stockholder of the Corporation on January 2, 2001. THIRD : The Certificate of Incorporation is G&L Mechanical Services, Inc. (hereinafter the "Corporation") IN WITNESS WHEREOF , Pepco G&L Newco, Inc. has caused this Certificate to be signed in its name and on its behalf by its President this 2 ^nd day of January, 2001, and its President acknowledges that this Certificate is the corporate act of the Corporation and that, to the best of his knowledge, information and belief, the matters set forth herein are true in all material respects.
		PEPCO ESI NEWCO, INC. Robert Aylward, President

BY-LAWS

OF

Pepco G&L Newco, Inc.
(a Delaware Corporation)

December 15, 2000

PEPCO G&L NEWCO, INC.

BY-LAWS

ARTICLE I

OFFICES

Section 1. The registered office of PEPCO G&L NEWCO, INC. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.          The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a stockholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

Section 2.          A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a stockholder or stockholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Section 3.          (a)     Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the stockholders of the Corporation or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the stockholders.

AR11CLE III

DIRECTORS

Section 1.          The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be stockholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

Section 2.          A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

Section 3.          (a)     Any director may resign at any time by giving written notice of his or her resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                         (b)     Any director or the entire Board may be removed, with or without cause, at any time by the holders or a majority of the shares then entitled to vote at an election of directors or by written consent of the stockholders pursuant to Section 3 of Article II hereof.

                         (c)     Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

Section 4.          (a)     As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article.

                         (b)     Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                         (c)     The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him or her at his or her residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him or her at such place by telegraph, cable wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                         (d)     The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

Section 5.          The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of stockholders. He or she shall preside at meetings of the Board and of the stockholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He or she shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he or she shall be ex-officio a member of all committees of the Board.

Section 6.          Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

Section 7.          Anyone or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 8.          The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

Section 9.          Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the fullest extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the fullest extent permitted by law purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him or her. To the fullest extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the fullest extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

ARTICLE V

OFFICERS

          Section 1.     The Board of Directors, as soon as reasonably practicable after the initial election of directors by stockholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

Section 2.          The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

Section 3.          Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

ARTICLE VI

CERTIFICATES OF STOCK

Section 1.          The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

Section 2.          The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Section 3.          No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

ARTICLE VII

CHECKS, NOTES, CONTRACTS, ETC.

          All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

          All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

          Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

ARTICLE VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December of such year.

ARTICLE IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

LIMITED LIABILITY COMPANY AGREEMENT on the Establishment of the Limited Liability Company "GRIDCO INTERNATIONAL L.L.C."
This Agreement is made this 18th day of November, 1998 by and between Potomac Electric Power Company, a Virginia and District of Columbia corporation ("PEPCO"), and Public Service Electric & Gas Company, a New Jersey corporation ("PSE&G"). WHEREAS, PEPCO and PSE&G (collectively the "Members" and individually a "Member") are electric utilities that own and operate electric transmission facilities ("TOs" and individually a "TO"); WHEREAS, the Members now desire to form a limited liability company in accordance with the laws of the State of Delaware (the "Company") for the purposes of developing a transmission company into which the Transmission Assets (as defined below) presently held by the Members and other TOs may be consolidated and new transmission facilities may be constructed; and WHEREAS, it is contemplated that other TOs may participate in the Company as members and that this Agreement will be further amended and supplemented by agreements (the "Definitive Agreements") to define the terms of such participation and the terms under which the transmission company will operate thereafter. NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Members hereby agree as follows:
ARTICLE I DEFINITIONS
"Act" shall mean the Delaware Limited Liability Company Act and all amendments to the Act. "Affiliate" shall mean, with respect to any Person, any other Person which controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" means the possession, direct or indirect, of the power to vote more than fifty percent (50%) of the voting stock or ownership interests of such Person, or the ability to direct or to cause the direction of the management and policies of such Person, whether through the ownership of voting stock, by contract or otherwise. "Board" shall have the meaning set forth in Section 6.1 of this Agreement. "Capital" shall mean the total equity in the Company as described in Article 5 of this Agreement. "Capital Account" shall mean the account maintained for a Member by the Company pursuant to Section 5.3 of this Agreement. "Certificate of Formation" shall mean the certificate of formation for the Company, the form of which is attached hereto as Annex 1. "Code" shall have the meaning set forth in Section of this Agreement. "Definitive Agreements" shall mean, without limitation, (i) an amendment to this Agreement admitting additional owner participants as Members, specifying the attributes of equity ownership in the Company, providing for the regulatory filings and financial transactions to take place thereafter until Financial Closing, and providing for the ongoing governance of the Company after Financial Closing, (ii) the Participation Agreement, and (iii) such other definitive agreements in connection therewith as the participants deem necessary. "Development Phase" shall-mean the initial period of the Company from Formation through Financial Closing pursuant to the Proposed Transactions. "Dollars" and "$" shall mean dollars in the lawful currency of the United States of America. "FERC" shall mean the Federal Energy Regulatory Commission or any successor agency thereto. "Financial Closing" shall mean the date on which the Transmission Businesses are transferred to the Company. "Force Majeure" shall have the meaning set forth in Section 13.6 of this Agreement. "Formation" shall have the meaning set forth in Section 2.1 of this Agreement. "Management" shall have the meaning set forth in Section 6.8 of this Agreement. "Manager" shall have the meaning set forth in Section 6.2 of this Agreement. "Member" shall mean PEPCO and PSE&G and their permitted transferees and assignees. "Net Losses" shall mean the losses and deductions of the Company determined in accordance with accounting principles consistently applied from year to year under the method of accounting adopted by the Company and as reported separately or in the aggregate, as appropriate, on the tax return of the Company filed for U.S. federal income tax purposes. "Net Profits" shall mean the income and gains of the Company determined in accordance with accounting principles consistently applied from year to year under the method of accounting adopted by the Company and as reported separately or in the aggregate, as appropriate, on the tax return of the Company filed for U.S. federal income tax purposes. "Notice of Termination" shall have the meaning set forth in Section 13.2 of this Agreement. "Official Approvals" shall mean all approvals, permits and licenses for the establishment and operations of the Company which may be required (including, but without limiting the generality of the foregoing, establishment of the Company, participation by a Member in the Company, or the performance by a Member of any of its obligations hereunder) from FERC, the Securities & Exchange Commission and any and all officials or agencies of the United States and/or individual states. "Ownership Interest" shall mean a Member's share of the Company's Net Profits, Net Losses and distributions of the Company's assets pursuant to this Agreement and the Act. "Participation Agreement" shall mean the agreement among the Company and the participants that will specify the definite terms under which Transmission Businesses will be transferred to the Company. "Person" shall mean any individual, corporation, partnership, association, joint venture, trust, unincorporated organization, or any government or political subdivision thereof. "Proposed Transactions" shall mean a series of transactions entered into by interested TOs for the purpose of consolidating Transmission Businesses. "Tax Regulations" shall mean, except where the context indicates otherwise, the permanent, temporary or proposed regulations of the U.S. Department of the Treasury under the Code as such regulations may be lawfully changed from time to time. "Transfer" shall have the meaning set forth in Section 9.1 of this Agreement. "Transmission Assets" shall mean those facilities of the TOs, the costs of which are included in Accounts 351-359 of the FERC's Uniform System of Accounts. "Transmission Business" shall mean a TO's (i) Transmission Assets, (ii) Transmission Liabilities; (iii) rights and obligations under the TO's existing transmission tariffs and agreements and under the PJM open access transmission tariff administered by PJM Interconnection, Inc., including all rights to revenues received from the provision of transmission services, and (iv) real estate recorded in Account 350 of the FERC's Uniform System of Accounts and used in connection with the TO's Transmission Business. "Transmission Liabilities" shall mean all of a TO's liabilities and obligations, of any kind and nature whatsoever without any limitation as to amount, under all tariffs and contracts related to or otherwise in connection with its Transmission Business which are to be transferred to the Company pursuant to the Participation Agreement.
ARTICLE II FORMATION OF THE COMPANY
2.1 Formation . Promptly after the execution of this Agreement, the Members shall file the Certificate of Formation with the Secretary of State of Delaware in accordance with and pursuant to the Act. The filing date of the Certificate of Formation shall be the formation date of the Company (the "Formation"). 2.2 Name . The name of the Company shall be Gridco International L.L.C. 2.3 Principal Place of Business and Registered Office . The principal place of business and registered office of the Company within the State of Delaware initially shall be the office of its registered agent, The Corporation Trust Company. The Company may locate its places of business and registered office at any other place or places as the Board may from time to time deem advisable. As authorized by resolution of the Board, the registered office and registered agent may be changed from time to time by filing the address of the new registered office and/or the name of the new registered agent with the Delaware Secretary of State pursuant to the Act.
ARTICLE III ORGANIZATION
3.1 Organizational Meeting . The Members shall, unless otherwise agreed, cause to occur, within ninety (90) calendar days after the Formation, the holding of an organizational meeting of the Board for the purpose of, by unanimous vote:
	(i) adopting the business plan for development of the Definitive Agreements; (ii) appointing personnel to Management positions; and (iii) taking any other actions necessary to commence the Company's operations.
ARTICLE IV BUSINESS OF THE COMPANY
4.1 Purpose . Without limiting the Company's permitted businesses, the primary business of the Company during the Development Phase shall be to pursue the Definitive Agreements and all necessary regulatory filings in connection with the Proposed Transactions. 4.2 Powers . The Company shall have the power: (a) to accomplish any lawful business whatsoever, or to take actions which shall at any time appear conducive to the protection or benefit of the Company and its assets; (b) to exercise all other powers necessary to or reasonably connected with the Company's business that may be legally exercised by limited liability companies under the Act; and (c) to engage in all activities necessary, customary, convenient, or incident to any of the foregoing.
ARTICLE V CAPITALIZATION
5.1 Capital Contribution Ob1iqations . Upon Formation, there will be an initial capital contribution of $5000 by each Member to its Capital Account, and each Member shall have an initial Ownership Interest of fifty percent. From time to time, in the discretion of the Board, the Company may issue calls on the Members for capital, in the form of cash reasonably required to achieve the purposes of the Company during the Development Phase. In such case, each member's contribution will be effected through its Capital Account and the Members' Ownership Interests will be adjusted so that the ratio between (a) the Ownership Interest of PEPCO and (b) the Ownership Interest of PSE&G shall be equal to the ratio between (c) the Capital Account of PEPCO and (d) the Capital Account of PSE&G, in both cases after the respective Capital Accounts have been credited with any such contributions. Notwithstanding the foregoing, however, this Agreement shall not be construed as creating a deficit restoration obligation or otherwise as personally obligating any Member to make any capital contribution under this Agreement. 5.2 Maintenance of Capital Accounts . The Company shall establish and maintain Capital Accounts for each Member. The initial amount of each Member's Capital Account shall be $5,000. Each Member's Capital Account shall be increased by (i) the amount of any money actually contributed by the Member to the Capital of the Company, (ii) the fair market value of any property contributed by the Member, as determined by the Company and the contributing Member at arm's length at the time of contribution (net of liabilities assumed by the Company or subject to which the Company takes such property), (iii) allocations to the Member of Net Profits, and (iv) allocations to the Member of income not included in determining Net Profit. Each Member's Capital Account shall be decreased by (i) the amount of any money actually distributed to the Member from the Capital of the Company, (ii) the fair market value of any property distributed to the Member, as determined by the Company and the distributee Member at arm's length at the time of distribution (net of liabilities of the Company assumed by the Member or subject to which the Member takes such property), (iii) allocations to the Member of Net Losses, and (iv) allocations to the Member of expenditures not included in determining Net Losses. 5.3 Limitation of Liability . Each Member's liability shall be limited as set forth in this Agreement and the Act. A Member will not be liable for any debts or losses of the Company beyond the amount such Member contributes, or agrees to contribute, to the Company.
ARTICLE VI MANAGEMENT
6.1 The Board of Managers . The highest governing body of the Company shall be the Board of Managers (the "Board"). The property, affairs and business of the Company shall be managed by or under the direction of the Board, which may exercise all such powers of the Company and do all such lawful acts and things as are not by law or this Agreement directed or required to be exercised or done by the Members. The Board shall operate in accordance with the procedures set forth in this Agreement. The Board shall assume such responsibilities and have such authority, powers and rights as the Members may from time to time determine. 6.2 The Managers . The overall management and control of the Company will be performed by its Board. During the Development Phase, the Board shall consist of one (1) Manager chosen by each Member (the "Managers"). Members may also appoint alternate Managers who shall be entitled to attend meetings and vote in place of absent Managers appointed by the same Member. Each Manager and alternate Manager shall serve during the Development Phase for an indefinite term at the pleasure of the Member represented. The chairman of the Board shall initially be chosen from among the Managers by lot, and, at the first regular meeting of the Board in each calendar year, the Manager representing the other Member shall become the chairman. 6.3 Operations of the Board . In the event of a vacancy on the Board, however created, the vacancy shall be filled automatically by the alternate Manager appointed by the same Member, or in the absence of such alternate Manager, by nomination of the Member who nominated the vacating Manager. During the Development Phase, decisions of the Board shall be made by unanimous vote, and the presence of both Managers shall constitute a quorum for transacting business at all meetings of the Board. 6.4 Meetings . Regular meetings of the Board shall be held as agreed by the Board, at such times, on such dates and in such places as the Board may designate. Either Manager may at any time call a special meeting of the Board. Notice of any special meeting of the Board may be given by personal delivery, by telephone or telex to each Manager no later than fifteen (15) working days prior to the day the meeting is to be held and shall state the date, place and hour of the meeting, and the purpose or purposes for which the meeting is called. The business that may be transacted at any special meeting shall be limited to and consist of the purpose or purposes stated in such notice. 6.5 Action Without Meetings . Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting, if a written consent thereto is signed by both Managers, and such written consent is filed with the minutes of proceedings of the Board. 6.6 Participation by Conference Communication . Managers may participate in a Board meeting by means of telephone conference or similar means of electronic communication provided that all persons participating in the meeting can hear each other. Such telephone or similar participation in a meeting shall constitute presence at such meeting. 6.7 Delegation . The Board may by unanimous resolution delegate all or any portion of its powers to one or more officers of the Company. 6.8 Management . The Management of the Company shall consist of the executive officers appointed by the Board (the "Management"). The initial Management of the Company shall consist of the President, Vice-President, Secretary, and Treasurer. Initially, the Manager who is chairman of the Board shall be Vice-President and the other Manager shall be President, and the Secretary and Treasurer shall be appointed at the first meeting of the Board. Any member of the Management may be removed at any time by the Board. The Management will have such duties as will be determined by the Board. 6.9 Powers of Management . The powers of the Management shall be as set forth in this Agreement and as determined by the Board. The Management shall be responsible for the implementation of the policies and strategies of the Board and, subject to the authority of the Board, shall conduct the day-to-day business of the Company under the supervision of the President. 6.10 Standard of Care . A Manager's or officer's duty of care in the discharge of his or her duties to the Company and the Members is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law. In discharging all duties, a Manager or officer shall be fully protected in relying in good faith upon the Company's records and upon such information, opinions, reports or statements by any of its other Managers or officers, Members or their agents, or by any other person, as to matters the Managers or officers reasonably believe are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits or losses of the Company or any other facts pertinent to the existence and amount of assets from which distributions of cash and/or property to Members might properly be made. 6.11 Indemnity of the Managers, Officers, Employees, and Other Agents . The Company shall indemnify to the full extent authorized or permitted by the laws of the State of Delaware any Manager, officer or, with the approval of the Board, any other person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a Manager, officer, employee or agent of the Company, or is or was serving at the request of the Company as a manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, domestic or foreign. The Company shall be authorized to procure insurance policies in such amounts as reasonably required to support the intent of this Section 6.11.
ARTICLE VII FISCAL MATTERS
7.1 Expenses . (a) The Members intend to enter into letters of intent with other TOs regarding the development of the Definitive Agreements. Each letter of intent ("LOI") shall obligate the Members and the additional party to that LOI to share the costs and expenses the Company incurred during the participation period of such additional party as determined monthly, based on the ratio of the book value of that party's Transmission Assets and the aggregate book value of the Transmission Assets of all Letter of Intent signatories as calculated from FERC Form 1s of each Letter of Intent signatory for the year 1997. To the extent that any cost or expense is not shared in the foregoing manner, each of the Members agrees to be responsible for and bear a one-half share of all costs and expenses incurred by the Company determined monthly. (b) In the event a Member fails to pay all or any of its pro rata share of expenses, the non-defaulting Member may compel the defaulting Member to make the required payment by bringing an action at law, including but not limited to, an action for specific performance. 7.2 Fiscal Year . The fiscal year of the Company shall be the calendar year, unless otherwise determined by the Board. 7.3 Financial Controls . The Company's books of account shall be kept by the Treasurer, and shall be audited at least annually by an independent auditor duly certified under the laws of the United States and selected by a unanimous vote of the Board. The Members shall jointly review the results of each such audit.
ARTICLE VIII ALLOCATIONS, DISTRIBUTIONS AND NET PROFITS
8.1 Allocation of Net Profits and Losses From Operations . Except to the extent otherwise required by the Internal Revenue Code of 1986, as amended, or any successor or superseding law (the "Code"), and the Tax Regulations. Net Profits, Net Losses and other items of income, gain, loss, deduction and credit shall be apportioned among the Members in accordance with their respective Ownership Interests; provided that, to "the extent possible, any deduction or expenditure which accrues to the Company as a result of an adjustment to the income of a Member or an affiliate of a Member pursuant to Code Section 482 and the Tax Regulations thereunder shall be specially allocated to such Member in an amount and to the extent necessary to offset such adjustment to income. 8.2 Limitations on Distributions . No distribution of cash and/or property shall be declared and made unless, after the distribution is made, the assets of the Company are in excess of all liabilities of the Company. For the purposes of this Section 8.2, amounts due to Members pursuant to their Capital Accounts shall not be considered liabilities of the Company. 8.3 Profits . During the Development Phase, the amount of the annual Net Profit of the Company shall be retained by the Company for use in the development of the Company's business.
ARTICLE IX TRANSFER OF INTEREST; WITHDRAWAL
9.1 Limitation on Transfers . Each Member agrees that it shall not sell, pledge, encumber, assign or in any other way transfer any part of its interest in the Company (hereinafter referred to as "Transfer(s)"), without prior written consent of each of the other Members; provided , however , that the foregoing shall not be deemed to prohibit or impede the consolidation or merger of a TO (that either is a Member or whose subsidiary is a Member) with or into any other corporation or a conveyance, transfer, or lease of all or substantially all of its assets to any Person. The Company shall not recognize as a party to this Agreement any transferee of any interest which is transferred other than in compliance with the terms and restrictions of this Agreement and, unless there has been such compliance, any transferee of such interest shall have no rights whatsoever under this Agreement, or in the Company. The Members agree that they may negotiate a partial or complete Transfer among themselves at any time. 9.2 Approval of Transfer . Transfer of a Member's interest in the Company shall, if required by applicable law, be submitted for approval to the appropriate governmental authority and such approval, if required, shall be a condition precedent to the effectiveness of any such Transfer. 9.3 Withdrawal . Notwithstanding anything to the contrary herein, the Members shall be free to withdraw from the Company at any time.
ARTICLE X GOVERNING LAW
10.1 Governing Law . This Agreement shall be governed by, and construed and interpreted in accordance with, only and exclusively, the substantive laws of the State of Delaware, without regard to Delaware conflict of laws rules.
ARTICLE XI DISPUTE RESOLUTION
11.1 Good Faith Negotiation . Each Member shall negotiate in good faith to resolve any dispute that may arise between the Members or between a Member and a signatory to the Letter of Intent with respect to this Agreement or the Proposed Transactions ("Dispute"). It is the intention of the Members that any Dispute be resolved as expeditiously and efficiently as possible. Upon notification from a Member of the existence of a Dispute, the Board may review the conflict between the Members. 11.2 Continuing Ob1iqations . Pending final resolution of any Dispute, each Member shall proceed diligently with its performance of this Agreement and the fulfillment of all its obligations hereunder.
ARTICLE XII TERM, TERMINATION AND LIQUIDATION
12.1 Term . Unless otherwise agreed, the term of this Agreement shall commence on the date hereof and shall continue indefinitely, unless terminated pursuant to Sections 12.2 or 12.3. 12.2 Termination . This Agreement shall terminate upon issuance of a notice of termination (a "Notice of Termination") executed by all Members. 12.3 Dissolution . The Company shall be dissolved and its affairs wound up upon the first to occur of the following events: (a) the termination of this Agreement, as provided in Section 12.2 of this Agreement; (b) the unanimous written consent of the Members to dissolve the Company; (c) the entry of a decree of judicial dissolution against the Company; or (d) the failure to conclude the Development Phase within three years of the Formation, or such later date fixed unanimously by the Members in an amendment to this Agreement. 12.4 Distribution of Assets on Dissolution . Upon the winding up of the Company, the assets of the Company shall be distributed: (a) to creditors, including Members who are creditors, to the extent permitted by law, in satisfaction of the liabilities of the Company; then (b) to Members in accordance with positive Capital Account balances taking into account all Capital Account adjustments for the Company's taxable year in which liquidation occurs; and (c) as to any intellectual property contributed to the Company by the Members, such intellectual property shall be returned to the Member having contributed such intellectual property. 12.5 Winding Up and Certificate of Cancellation . The winding up of the Company shall be completed when all debts, liabilities, and obligations of the Company have been paid and discharged or reasonably adequate provision therefor has been made, and all of the remaining property and assets of the Company have been distributed to the Members. Upon the completion of winding up of the Company, a Certificate of Cancellation (as defined in the Act) shall be delivered to the Secretary of State for filing. The Certificate of Cancellation shall set forth the information required by the Act.
ARTICLE XIII MISCELLANEOUS
13.1 Scope of Members' Authority . Unless otherwise provided in this Agreement, neither Member shall, without the prior written consent of the other Member, in any manner use the name of, or commit or act or pursue to act for or as a representative of, or assume obligations or responsibilities on behalf of the other Member of the Company, whether before or after the date of Formation. 13.2 Indemnification . Each Member agrees to indemnify and hold harmless the Company and the other Member against any and all claims, judgments, losses, penalties, fines and reasonable attorneys' fees and consultants' fees associated therewith, as a result of: (I) its being a Member in the Company; or (ii) the violation of any portion of this Agreement. 13.3 Survival . This Agreement shall be binding upon the Members, their respective successors, and Persons to whom transfer of Ownership Interest is permitted pursuant to Section 9.1. 13.4 Entire Agreement . This Agreement constitutes the entire understanding of the Members with respect to the subject matter contained herein and supersedes all prior negotiations and understandings between them, whether written or oral. No amendment to this Agreement shall be effective unless it is in writing and executed by the Members hereto. 13.5 Severability . If anyone or more provisions of this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired; provided , however , that in such case the Members agree to use their reasonable efforts to achieve the purpose of the invalid provision by a new legally valid provision. 13.6 Force Majeure . Either Member shall be excused from failures or delays in performance of this Agreement which arise from conditions of Force Majeure, which shall be considered to mean unforeseen causes beyond the control of, and without the fault or negligence of, the non-performing or delaying Member. Such causes shall include, but are not limited to: war; civil insurrection; riot; acts of the Government of the United States acting in its sovereign capacity, whether promulgated in the form of law or otherwise; strikes; serious floods; fires; explosions and/or accidents which effect vital equipment or facilities used in the performance of this Agreement; provided , however , that the failure to perform or delay in performing must be caused by circumstances unforeseen by the delaying or non-performing Member. Excuse on the basis of Force Majeure shall not relieve the delaying Member from using its reasonable efforts to avoid or minimize the delay and to continue performance hereunder with the utmost dispatch whenever such conditions are removed or have been reduced to an extent which permits the continuation of performance. Any Member claiming any such excuse for failure or delay in performance shall give prompt notice thereof to the other Member. 13.7 No Waiver . No failure or delay on the part of a Member in the exercise of any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or of any other right. All rights and remedies under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available. 13.8 Notices . All notices, requests, demands or other communications hereunder shall be in writing and shall be given by personal service, by international air courier or by telex or facsimile to the Company and/or the appropriate Member or Members as follows:
		If to PEPCO to: Andrew W. Williams Potomac Electric Power Company 1900 Pennsylvania Avenue, N.W. Washington, D.C. 20068 If to PSE&G to: Edward J. Biggins Public Service Electric & Gas Company 80 Park Plaza Newark, New Jersey 07101 If to the Company to: Filiberto Agusti, Esquire Steptoe & Johnson LLP 1330 Connecticut Ave., N.W. Washington, D.C. 20036
All notices shall be effective when received, as conclusively evidenced in the case of notice by telex by receipt of a confirmed answer back. A Member may by notice to the other Member and the Company in accordance with this Section 13.8 designate a new address of notices. 13.9 Captions . Captions or headings used in this Agreement are for convenience of reference only, and shall not be considered in the construction of this Agreement. 13.10 Counterparts and Force and Effect of Language . This Agreement may be executed in duplicate, all of which shall be deemed to be an original and all of which shall constitute one and the same Agreement. IN WITNESS WHEREOF, the Members have caused this Agreement to be executed by their duly authorized representatives on the date first above written.
				POTOMAC ELECTRIC POWER COMPANY By: /s/ A. W. Williams Name: A. W. Williams Title: Vice President PUBLIC SERVICE ELECTRIC & GAS COMPANY By: /s/ P. R. H. Landrieu Name: P. R. H. Landrieu Title: Vice President
State of Delaware Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF LIMITED LIABILITY COMPANY OF "GRIDCO INTERNATIONAL L.L.C.", FILED IN THIS OFFICE ON THE TWENTIETH DAY OF NOVEMBER, A.D. 1998, AT 2 O'CLOCK P.M. [SEAL APPEARS HERE]
			/s/ Edward J. Freel Edward J. Freel Secretary of State
2969594 8100 981448917						AUTHENTICATION: 9420431 DATE: 11-23-98
CERTIFICATE OF FORMATION OF GRIDCO INTERNATIONAL L.L.C. LIMITED LIABILITY COMPANY
The undersigned, being authorized to execute and file this Certificate of Formation, hereby certifies that: FIRST: The name of the limited liability company (hereinafter referred to as the "Company") is GRIDCO INTERNATIONAL L.L.C. SECOND: The address of its registered office in the State of Delaware is 1209 Orange Street, New Castle County, Wilmington, DE 19801. The name of the Company's Registered Agent at that address is The Corporation Trust Company. IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Formation as of this 20th day of November, 1998.
					/s/ Andrew W. Williams Name: Andrew W. Williams Authorized Person

__________________________________________________________________________

GENERAL PARTNERSHIP AGREEMENT

HARMANS BUILDING ASSOCIATES

Dated as of Dec. 28, 1990

___________________________________________________________________________

GENERAL PARTNERSHIP AGREEMENT OF HARMANS BUILDING ASSOCIATES Dated as of Dec. 28, 1990 TABLE OF CONTENTS
Section		Page
I.	FORMATION AND GENERAL	1
II.	TERM	2
III.	PURPOSES	2
IV.	PRINCIPAL OFFICE	4
V.	CAPITAL CONTRIBUTIONS	4
VI.	CONTROL AND MANAGEMENT	15
VII.	ALLOCATIONS OF PROFITS AND LOSSES	31
VIII.	DISTRIBUTIONS	34
IX.	PARTNERSHIP EXPENSES, RESERVES AND FEES	39
X.	BUDGETS, PLANS AND CONSTRUCTION CONTRACT	41
XI.	RENT CHANGE ORDER AND DEFICIT CONTRIBUTIONS	43
XII.	ASSIGNMENT OF INTERESTS OF PARTNERS	44
XIII.	DEADLOCK; EVENTS OF DEFAULT	49
XIV.	DISSOLUTION AND TERMINATION	59
XV.	ACCOUNTING	61
XVI.	REPORTS AND STATEMENTS	61
XVII.	BANK ACCOUNTS	63
XVIII.	NOTICES	63
XIX.	DEFINED TERMS	64
XX.	MISCELLANEOUS	75
	Exhibit "A" - Property Description
	Exhibit "B" - Partner Representatives and Key Persons
	Exhibit "C" - PCI Contribution Note
	Exhibit "D" - Insurance Coverage
	Exhibit "E" - Reimbursable Pre-formation Costs
	Exhibit "F" - List of C&P Plans
	Exhibit "G" - C&P Budget

GENERAL PARTNERSHIP AGREEMENT OF HARMANS BUILDING ASSOCIATES Dated as of December 28 , 1990
This General Partnership Agreement (the "Agreement") is made and entered into effective as of the 28 ^th day of December, 1990, by and between LINPRO HARMANS LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter sometimes referred to as "Linpro"), and POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation (hereinafter sometimes referred to as "PCI"). Linpro and PCI are hereinafter sometimes referred to individually as a "Partner" and collectively as the "Partners.
SECTION I Formation and General
1.1 . Formation . The parties hereto do hereby form a general partnership pursuant to the Uniform Partnership Act of the State of Maryland (the "Partnership Act") for the limited purposes set forth herein Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Partnership Act. Promptly, after the execution and delivery of this Agreement, the Partners shall execute, acknowledge and/or swear to, as appropriate, and the Partnership shall file or record with the proper offices in the State of Maryland and each other jurisdiction and political subdivision in which the Partnership does business, such applications or other certificates or documents as are required or permitted by any applicable assumed or fictitious name statutes in effect in such jurisdiction or political subdivision. The Partners shall further execute, acknowledge and/or swear to, as appropriate, and the Partnership shall promptly file or record as aforesaid, such amendments or additional or other documents as may from time to time be required by such statutes or laws to permit the continued existence and operation of the Partnership.
1.2 . Name . The name of the Partnership shall for all purposes be HARMANS BUILDING ASSOCIATES, and such name shall be used at all times in connection with the Partnership's business and affairs.
1.3 . Defined Terms Reference is hereby made to Section XIX of this Agreement for the definition of certain capitalized terms used herein.
SECTION II Term
The term of the Partnership shall be deemed to commence on the execution of this Agreement and shall continue until terminated as provided in Section XIV.
SECTION III Purposes
Simultaneously with the execution of this Agreement, Linpro Harmans Land Limited Partnership, a Delaware limited partnership, has conveyed and assigned to the Partnership all of its right, title and interest in and to the Property (as defined below) and the C&P Lease (as defined below). Subject to the provisions of this Agreement, the purposes and business of the Partnership shall be to (a) acquire, own, hold, develop, subdivide, manage, operate, lease, finance, mortgage, sell and otherwise deal with that certain parcel of real property known as Lot 3, containing approximately 14.36 acres, as shown on Plat 2 of 4 in the subdivision known as Linpro-Harmans per Administrative Subdivision Plat recorded in Plat Book 128, Page 29 in the land records of Anne Arundel County, Maryland and located in an existing industrial park, known as Linpro Harmans Subdivision, at Harmans Road immediately south of Dorsey Road in Anne Arundel County, Maryland, and such other right, title and interest appurtenant thereto, as more particularly described on Exhibit "A" attached hereto and by this reference made a part hereof (herein sometimes referred to as the "Property"); (b) obtain such governmental approvals as may be necessary from time to time and contract for and supervise all work necessary or appropriate for (i) the development of the Property with such on-site improvements and off-site improvements necessary to accommodate the Building (as defined below) (all such site and off-site improvements and developments being herein sometimes referred to as the "Site Improvements") and (ii) construction of a service operations center for the Chesapeake and Potomac Telephone Company of Maryland ("C&P") consisting of an approximately 38,074 square foot building which is proposed to contain approximately 21,407 square feet of offices, 6,889 square feet of warehouse space and 9,778 square feet of maintenance space, together with parking spaces for 290 automobiles and 250 C&P service vehicles and a fuel depot (all of such improvements being herein sometimes referred to as the "Building") (the Site Improvements together with the Building being herein sometimes referred to as the "Improvements") (and the Improvements together with the Property being herein sometimes referred to as the "Project"), in accordance with the terms and provisions set forth in that certain Lease Agreement by and between Linpro Harmans Land Limited Partnership, a limited partnership, as landlord, and C&P, as tenant, dated December 28, 1989, as amended by letter agreements dated March 30, 1990 and July 12, 1990 (such lease agreement as previously amended, together with such further amendments as are approved by the Partners, being herein sometimes referred to as the "C&P Lease") and the plans and specifications described on Exhibit F attached hereto and by this reference incorporated herein (the "C&P Plans"); (c)conduct such engineering grading, soil investigations, testing and other site work necessary to prepare the Property for construction of the Improvements thereon; (d) contract for and supervise all work or appropriate for the construction of the Improvements; (e) own, hold, manage, operate, maintain, improve, finance, mortgage, lease, sell and otherwise deal with the Project, or any part thereof including entering into agreements with Partners, Related Entities or other third parties to perform services for the Partnership in connection with such foregoing purposes in accordance with and, subject to the terms hereof; and (f) conduct such other activities as may be necessary, advisable, convenient or appropriate to promote or conduct the business of the Partnership as set forth above, including, but not limited to, entering into other partnership agreements in the capacity of a general partner or a limited partner, becoming a member of a joint venture, participating in forms of syndication for investment, owning stock in corporations and the incurring of indebtedness and the granting of liens and security interests on the real and personal property of the Partnership, it being agreed that each of the foregoing is an ordinary part of the Partnership's business, and such purposes and business of the Partnership described in clauses (a) through (f) shall not be extended by implication or otherwise unless Approved by the Partners.
SECTION IV Principal Office
The principal office and place of business of the Partnership shall be located at The Linpro Company, 1717 Elton Road, Suite 211, Silver Spring, Maryland 20903. The Managing Partner may from time to time change such principal office and place of business or may change or establish such additional offices or places of business in the State of Maryland. The Managing Partner shall promptly notify the other Partner of any such change or establishment of offices.
SECTION V Capital Contributions
5.1 . Initial Capital Contributions . (a) The initial capital contributions of the Partners to the capital of the Partnership shall be ONE THOUSAND AND NO/100 DOLLARS ($1,000.00) which shall be contributed simultaneously with the full execution of this Agreement as follows:
			Partner		Contribution
			Linpro		$500.00
			PCI		$500.00
(b) In addition to the capital contributions required of PCI by Section 5.1(a) hereof, PCI shall also contribute to the capital of the Partnership an additional aggregate amount of up to One Million Seven Hundred and seventy-five Thousand Dollars ($1,775,000.00) in cash on an as needed basis in accordance with the provisions set forth below in this Section 5.1(b) (the "PCI Additional Capital Contribution" ). If for any period beginning on or after the formation of the Partnership, the sum of the capital contributions, loan proceeds, reserves, proceeds from Interim Capital Transactions and Net Cash Flow of the Partnership is or is reasonably anticipated to be insufficient to meet and pay Partnership debts and obligations, including costs of acquiring, holding and developing the Property, costs of construction of the Improvements, costs of purchase and installation of any personal property on or about the Project, costs associated with the Construction Loan, any interim loan, or any permanent loan and any costs related to payment of architectural, engineering, development, marketing and leasing costs, financing costs, accrued interest and other indirect costs which are incurred in connection with the Project or the Partnership (the amount of such shortfall of Partnership funds being hereinafter referred to as the "Construction Deficit"),the Managing Partner shall give written notice to PCI of the total amount of such Construction Deficit together with a detailed report showing the actual costs of the Project to the date of the notice and the projected additional costs of the Project and a statement showing all sources and uses of funds. Within thirty (30) days after delivery of such notice and the report and statement referred to above to PCI, PCI shall contribute the amount of such Construction Deficit to the Partnership as an additional capital contribution up to the aggregate amount of $1,775,000. The Managing Partner hereby agrees to give promptly to PCI such additional information regarding such Construction Deficit as may be reasonably requested Notwithstanding any of the foregoing to the contrary, the PCI Additional Capital Contribution shall be due and payable to the Partnership at such times and in such amounts as are required under the terms of the documents evidencing or securing the Construction Loan. Such amounts shall be contributed in immediately available funds, unconditionally and without right of set-off. Notwithstanding any other provision of this Agreement to the contrary, all amounts of the PCI Additional Capital Contribution made during the term of the Construction Loan shall be used by the Partnership solely in payment or prepayment of the Construction Loan.
(c) To evidence the obligation of PCI to make the installments of its Additional Capital Contribution, PCI shall deliver to the Partnership, its promissory note in the form set forth on Exhibit "C" attached hereto and by this reference incorporated herein for all purposes ("Contribution Note"). PCI acknowledges and agrees that the Partnership shall assign and endorse, with recourse, to the Construction Lender all of its right, title and interest in and to the Contribution Note, whereby the Partnership shall assign to the Construction Lender the right to receive any and all payments due under the Contribution Note. Any amount paid by PCI to the Construction Lender pursuant to the assignment of the Contribution Note to the Construction Lender shall be deemed a contribution of its Additional Capital Contribution pursuant to Section 5.1(b) hereof and shall be applied as a mandatory prepayment of the Construction Loan. At such time as the Construction Loan shall have been paid in full, the Managing Partner shall require the Construction Lender to endorse and assign the Contribution Note to the Partnership and immediately upon receipt thereof, the Partnership shall deliver the original thereof to PCI, provided the return of such PCI Contribution Note shall not have any effect on PCI's obligations under Section 5.1(b) hereof.
(d) If PCI should fail to make any of its contributions to the capital of the Partnership pursuant to Section 5.1(b) hereof on or before the date specified therein, PCI shall, without notice to or opportunity of PCI. to cure, be in default and the Partnership and Linpro may, in addition to and without prejudice any other rights they may have at law or in equity, including a suit for collection, as a remedy for such default, purchase all (but not less than all) of PCI's Interest in the Partnership for an amount equal to fifty percent (50%) of the total capital contributions previously made by PCI to the Partnership as of the date of such purchase, payable in cash; provided, however, that simultaneously with such purchase, the Contribution Note shall be cancelled and the original returned to PCI'; and provided, further, that the election of the remedy provided in this Section 5.1(d) shall automatically and completely waive and terminate all other rights the Partnership and Linpro may have at law or in equity, including any suit for collection, with respect to the failure of PCI to make any of its contribution pursuant to Section 5.1(b) hereof. Notwithstanding the provisions of Section XII hereof, the right to purchase PCI's Interest in the Partnership under this Section 5.1(d) may be assigned by Linpro and the Partnership to any other Person.
5.2 . Additional Capital Contributions . (a) Subject to Sections 5.2(b) and 5.2(c), any additional funds required by the Partnership to meet its cash requirements shall, to the extent possible, be provided by Partnership borrowings from third parties, upon such terms and conditions as Approved by the Partners.
(b) If prior to the completion of construction of the Project in accordance with the C&P Lease the sum of the capital contributions, loan proceeds, reserves, proceeds from Interim Capital Transactions and Net Cash Flow of the Partnership is or is reasonably anticipated to be insufficient to fund the costs of approved Rent Change Orders, as such term is defined in the C&P Lease, and the Partnership is 'unable to borrow such funds upon terms satisfactory to the Partners, the Managing Partner shall give written notice to the other Partner of the total amount of such shortfall (provided, however, that the other Partner may give the notice described in this Section 5.2(b) if the Managing Partner fails to do so and, in the reasonable judgment of the other Partner, there is or will soon be such a shortfall). The Managing Partner hereby agrees to give the other Partner reports and statements similar to those described in Section 5.1(b) hereof and such other information regarding such shortfall as may be reasonably requested. Within thirty (30) days after delivery of such notice PCI and Linpro shall each contribute their pro rata share of such amount (based on their relative Percentage Interests) as a "Rent Change Order Contribution" to the Partnership.
(c) Subject to Section 5.2(b) hereof, if for any period beginning on or after the earlier of (i) the date PCI shall have fully funded its Additional Capital Contribution or (ii) the date that PCI shall cease to have any obligation to fund any of its Additional Capital Contribution, the sum of the capital contributions, loan proceeds, reserves, proceeds from Interim Capital Transactions and Net Cash Flow of the Partnership is or is reasonably anticipated to be insufficient to meet and pay Partnership debts and obligations (including but not limited to the obligations of the Partnership under the Construction Loan and the C&P Lease) as they become due and payable (the amount of such shortfall of Partnership funds being hereinafter referred to as the "Deficit"), and the Partnership is unable to borrow such funds upon terms satisfactory to the Partners, the Managing Partner shall give written notice to the other Partner of the total amount of such Deficit (provided, however, that the other Partner may give the notice described in this Section 5.2(c) if the Managing Partner fails to do so and, in the reasonable judgment of the other Partner, there is or will soon be a Deficit). The Managing Partner hereby agrees to give the other Partner reports and statements similar to those described in Section 5.1(b) hereof and such other information regarding such Deficit as may be reasonably requested. Within thirty (30) days after delivery of such notice PCI and Linpro shall each contribute their pro rata share of such amount (based on their relative Percentage Interests) as an additional capital contribution to the Partnership.
(d) All additional capital contributions required to be made pursuant to Sections 5.2(b) and 5.2(c) shall be paid directly into an escrow account with a bank located in Maryland designated by the Managing Partner pursuant to an escrow agreement acceptable to the Managing Partner. The funds deposited in such account shall be released to the Partnership only (i) at the time both Partners have made their required additional capital contribution, or (ii) if one Partner fails to timely make its required additional capital contribution in whole or in part, at the time the other Partner elects to undertake and performs the actions described in Section 5.2(e) (i) or (ii).
(e) If any Partner fails to make any of its additional contributions to the capital of the Partnership pursuant to Section 5.2(b) or 5.2(c) on or before the date specified therein, and such Partner fails to cure such failure within ten (10) days after written notice thereof from the other Partner, such Partner that has failed to make its contribution ("Defaulting Partner") shall be in default as of the date such contribution was due (and such date of default shall sometimes herein referred to as the "Date of Default"). Upon the occurrence of any such default, the non-defaulting Partner ("Nondefaulting Partner") may, as its and the Partnership's sole and exclusive remedy, elect any one (but not more than one) of the following remedies:
	(i) Contribute to the Partnership the amount of the additional capital contribution required of the Defaulting Partner but not contributed by such Defaulting Partner and elect (by written notice thereof to the Defaulting Partner) to treat the entire amount of the Nondefaulting Partner's contribution (including the amount that will be released to the Partnership from the escrow account described in Section 5.2(d) hereof upon such election) as a Deficit Contribution.
	(ii) Contribute to the Partnership as an additional capital contribution of the Nondefaulting Partner the amount of the additional contribution required of the Defaulting Partner but not contributed by such Defaulting Partner and elect (by written notice thereof to the Defaulting Partner) to adjust the Partner's Percentage Interest in the Partnership as set forth below. In such event, the Percentage Interest of the Defaulting Partner shall be reduced at the rate of one (1) percentage point for every twenty thousand dollars ($20,000) that the Defaulting Partner failed to contribute under Section 5.2(b) or 5.2(c), as the case may be, and the Percentage Interest in the Partnership of the Nondefaulting Partner (or its assignee or designee, as the case may be) shall be increased by the same number of percentage points that the Percentage Interest in the Partnership of the Defaulting Partner is decreased pursuant to the terms and provisions of this Section 5.2(e)(ii). Solely for purposes of calculating the dilution of a Defaulting Partner's Percentage Interest under this Section 5.2(e), the amount of capital that the Defaulting Partner was required to contribute under Section 5.2(b) or 5.2(c), as the case may be, shall be determined by assuming that the Defaulting Partner's Percentage Interest is always fifty percent (50%). For example, if Rent Change Order Contributions of Two Hundred Thousand Dollars ($200,000) were required under Section 5.2(b), the Defaulting Partner was required and failed to contribute One Hundred Thousand Dollars ($100,000) and the Nondefaulting Partner elected to dilute the Defaulting Partner in accordance with this Section 5.2(e)(ii), the Defaulting Partner's Percentage Interest would be diluted by five (5) percentage points, from fifty percent (50%) to forty-five percent (45%). If, subsequently, further additional capital contributions of $200,000were required under Section 5.2(c) and the Defaulting Partner failed to contribute its pro rata share ($90,000, or 45% of $200,000), and the Nondefaulting Partner again elected to dilute the Defaulting Partner in accordance with this Section 5.2(e)(ii), the Defaulting Partner's Percentage Interest would again be diluted by five (5) percentage points, from forty-five percent (45%) to forty percent (40%), as if it has been required to contribute $100,000, or fifty percent (50%) of $200,000.
(f) Each Partner acknowledges and agrees that it would not be entering into this Agreement were it not for (i) the other Partner agreeing to make the capital contributions required by Section 5.1(b) and this Section 5.2 and (ii) the remedy provisions set forth in this Agreement, and in particular Sections 5.1(d) and 5.2(e). Each Partner further acknowledges and agrees that (i) in the event that any Partner fails to satisfy its obligations pursuant to Sections 5.1(b), 5.2(b) and 5.2(c) of this Agreement, the other Partner and the Partnership may have no adequate remedy at law for such breach, (ii) that any reduction in the Defaulting Partner's Partnership Interest or right to distributions as a result of the exercise of one of the remedies provided in Sections 5.1(d) and 5.2(e) hereof is intended as liquidated damages and not as a penalty by reason of the fact that the damages resulting from a breach hereof would be impossible to ascertain at the time hereof or of such breach, and (iii) the remedies set forth in Sections 5.1(d) and 5.2(e) are fair, just and equitable in all respects. Each Partner hereby irrevocably constitutes and appoints the other Partner (and each of its general partners or officers, as the case may be) as its true and lawful attorney-in-fact, in its name, place and stead, to make, execute, consent to, swear to, acknowledge, deliver, record and file such assignments, conveyances, agreements, instruments or other documents which may be necessary, in the sole and absolute discretion of the other Partner, to confirm and render fully effective the remedies set forth in Sections 5.1(d) and 5.2(e) or any other remedies set forth in this Agreement. It is expressly understood, intended and agreed by each of the Partners for itself, its administrators, legal representatives, successors and assigns, that the grant of this power of attorney to the other Partner and to the general partners or officers of the other Partner pursuant to this Section 5.2(f) is irrevocable and is coupled with an interest by reason of the facts, among others, that the other Partner will be relying on its power to act as contemplated by this provision, the other Partner would not have entered into this Agreement were it not for the powers granted to it by these provisions and the other Partner has rights in the Partnership property which the power is needed to protect. The grant of this power of attorney shall survive the subsequent death, legal incompetency, disability, incapacity, bankruptcy, retirement or withdrawal of any Partner or the partners or other beneficial owners of any Partner or the assignment of its or their interests in the Partnership or in such Partner, as the case may be.
5.3 . Property Contribution . In addition to the contributions required of Linpro by Sections 5.1 and 5.2 hereof, Linpro as the owner of the fee simple title to the Property, shall simultaneously with the execution and delivery of this Agreement, contribute the following ("Contributed Property") to the capital of the partnership:
(a) The Property, together with so much of the Improvements as have been constructed,
(b) All other Improvements situated on the Property,
(c) All construction and contracts, rights, leases, agreements and deposits pertaining to, incidental to or relating to the Property, if any, including any and all rights, titles and interests in and to any reports, site and other plans, studies, policies, surveys, maps, bonds, commitments, plans and specifications, drawings and any and all other items or material of any kind pertaining to, incidental to or related to the Property, if any (including the C&P Lease and the Omni Construction Contract).
The contribution of the Contributed Property by Linpro to the capital of the Partnership shall be by a special warranty deed, bill of sale, assignment and such other documents as are reasonably necessary to convey the Contributed Property, as set forth above, each in a form mutually acceptable to counsel for Linpro and counsel for PCI. The property shall be contributed subject to (1) a Deed of Trust and other documents securing a loan made by Bank of New England, N.A. having an outstanding principal balance of $2,100,000 (the "BNE Loan") which BNE Loan shall have, immediately prior to the contribution of the Contributed Property, been assigned by BNE to the Construction Lender and (2) the obligations of landlord under the C&P Lease. All items of income and expense relating to the Contributed Property shall be prorated as of the date of contribution between Linpro and the Partnership. The Partners agree that the gross fair market value of the Contributed Property on the date hereof is one hundred dollars ($100.00) in excess of the gross amount of the obligations and liabilities to which the Contributed Property is subject. Accordingly, the Partners agree that Linpro shall receive a net credit to its capital account of one hundred dollars ($100.00) with respect to the contribution of the Contributed Property. The Partners hereby agree that the gross fair market value and the Property on the date hereof is equal to $2,100,100.
5.4 . Capital Accounts . The capital accounts of the Partners shall be determined and maintained throughout the full term of this Agreement in accordance with the capital accounting rules of section 1.704-1(b) (2)(iv) of the Section 704(b) Regulations (relating to maintenance of capital accounts). Each Partner shall have a capital account which shall be credited (increased) by:
(a) the amount of its cash capital contributions to the Partnership and the agreed fair market value of property other than cash contributed to the Partnership by such Partner (net of liabilities secured by such contributed property that the Partnership is considered to have assumed or taken subject to for purposes of Section 752 of the Code);
(b) the amount of Profits and items thereof allocated to it pursuant to Section VII hereof; and
(c) any other increase required to be made to the capital account of the Partner by the Section 704(b) Regulations, to the extent not otherwise provided for herein;
and shall be debited (decreased) by:
(d) the amount of Losses and items thereof allocated to such Partner pursuant to Section VII hereof;
(e) all amounts distributed or deemed distributed to it pursuant to Section VII and the fair market value (as determined for purposes of Section 5.10) of property distributed to such Partner (net of liabilities securing such distributed property that such Partner is considered to have assumed or taken subject to under Section 752 of the Code); and
(f) any other reductions in the capital account of the Partner required by the Section 704(b) Regulations, to the extent not otherwise provided for herein.
5.5 . Interest on and Return of Capital . Except as specifically provided herein, no interest shall be paid on any capital contribution to the Partnership or capital account of a Partner. No Partner shall be liable for the return of the capital contributions or the capital account (or any portion thereof) of any other Partner, it being expressly understood and agreed that such return shall be made solely from the assets of the Partnership. No Partner shall be entitled to demand and receive property other than cash in return for its capital contributions to the Partnership, its capital account or its Partnership Interest.
5.6 . Loans by a Partner; Withdrawal of Capital . Loans by any Partner to the Partnership shall not be considered contributions to the capital of the Partnership and shall not increase the capital account of the lending Partner, and repayment of such loan shall not be deemed withdrawals from the capital of the Partnership. A Partner shall not be entitled to withdraw any part of its capital account or. to receive any distribution from the Partnership, except as specifically provided in this Agreement, and further, without the consent of all of the Partners, no Partner shall be entitled to make any additional capital contributions to the Partnership other than as provided in Section 5.2 hereof or as otherwise provided herein.
5.7 . Negative Capital Accounts . A negative or deficit balance in any Partner's capital account shall not be deemed to be an asset of the Partnership, and no Partner with a negative or deficit capital account balance shall have any obligation to the Partnership, to any other Partner or to any third party or creditor to restore said negative or deficit balance(s).
5.8 . Determination of Capital Accounts . Whenever it is necessary to determine the balance in the capital account of any Partner for purposes of this Agreement, such balance shall be determined after first giving effect to all allocations, for transactions effected prior to the time as of which such determination is made, of Profits, Losses and items thereof for the current year, and second, after giving effect to all distributions or deemed distributions for such year in respect of transactions effected prior to the date as of which such determination is to be made, and third, after giving effect to all allocations of Profits, Losses and items thereof for the transaction in question (that is, prior to giving effect to distributions or deemed distributions as a result of such transaction). Any Partner, including any additional or substitute Partner, who shall acquire or receive any Partnership Interest or whose Partnership Interest shall be increased by means of a transfer to him of all or part of the Partnership Interest of another Partner, shall have a capital account which reflects such transfer; provided, however, that Section 5.2(e)(ii) shall not be construed to effect any transfer of the capital account balance of the Defaulting Partner to the Nondefaulting Partner as of the date of exercise of such remedy, but shall affect the Partner's rights to Partnership Profits and Losses realized and distributions with respect to periods from and after such date.
5.9 . Waiver of Right of Partition and Dissolution . Having been previously advised that each may have a right to bring an action for partition, each of the Partners does hereby agree to and does hereby irrevocably waive for the duration of this Agreement any right or power any such Partner might have (i) to cause the Partnership or any of its assets to be partitioned, (ii) to cause the appointment of a receiver for the assets of the Partnership, and (iii) to compel any sale of all or any portion of the assets of the Partnership pursuant to any applicable law or laws, or to file a complaint or to institute any proceeding at law or in equity to cause the termination or dissolution of the Partnership, except to enforce, compel or implement or effect any dissolution, termination or liquidation of the Partnership occurring or required to occur pursuant to Articles XIII and XIV hereof. Each of the Partners hereby acknowledges and agrees that such Partner has been induced to enter into this Agreement in reliance upon the mutual waivers set forth in this Section 5.9, and that without such waivers, no Partner would have entered into this Agreement. No Partner has any interest in specific Partnership property, and the interest of all Partners in the Partnership are, for all purposes, personal property.
5.10 . Accounting for Distributions in Kind . In the event that the Partnership distributes to a Partner property other than cash, solely for purposes of computing the capital accounts of the respective Partners, such distribution shall be treated as a sale by the Partnership of the property so distributed for an amount equal to the fair market value of such property (with appropriate adjustments for any liability which is assumed or taken subject to by the distributee Partner), and the deemed Profits or Losses, as the case may be, shall be allocated in accordance with Section VII hereof. The fair market values used for purposes of this Section 5.10 in determining the amount of deemed gain or deemed loss shall be determinative of the values of such assets for purposes of determining the amounts of distributions to Partners under Section VIII. Such fair market value shall be determined in the following manner, should the Partners fail to agree on the determination of fair market value within 30 days after such property is proposed to be distributed. Linpro and PCI shall each select an appraiser who is a member of the Appraisal Institute (or its successors) who has at least five (5) years' experience as a real estate appraiser in appraising properties such as the Project and is familiar with the real estate market in which the Project is located. If either party fails to name such an appraiser within 30 days after notice by the other party that the other party has selected an appraiser (such notice to contain the name of such appraiser), the other party may select the second appraiser. The two appraisers so selected shall proceed promptly to determine the fair market value of the property in question, taking into consideration any outstanding indebtedness, liabilities, liens and obligations relating to such property, including the obligations of the Partnership under the C&P Lease. The determination of such fair market value by the two appraisers so selected shall be final and binding upon all parties; and if the two appraisers so selected are unable to agree upon a fair market value within 30 days after the appointment of the second appraiser, said two appraisers shall select a third appraiser (who shall also be a member of the Appraisal Institute, or its successors) who has at least five (5) years' experience as a real estate appraiser in appraising properties such as the Project and is familiar with the real estate market in which the Project is located, and the determination of the third appraiser as to fair market value shall be conclusive as to such fair market value and shall be final and binding upon all parties. In the event the two appraisers fail to agree on the selection of the third appraiser within ten (10) days after the end of the 30-day period set forth in the immediately preceding sentence, the third appraiser shall be designated by the President of the Washington, D.C. Board of Realtors, whose determination shall be binding on the parties. The Partnership shall pay the fees and expenses of the appraisers selected pursuant to the provisions of this Section 5.10.
SECTION VI Control and Management
6.1 . General Authority . Except as specifically limited in Sections 6.3 and 6.4 below or elsewhere in this Agreement, the Managing Partner shall be solely responsible for the day-to-day management and operation of the Partnership's business, and shall have full, exclusive and complete discretion in the management and control of the day-to-day affairs of the Partnership and the Partnership's day-to-day business for the purposes set forth in Section III. Linpro shall be the initial Managing Partner of the Partnership. Subject to Sections 6.3 and 6.4 below, the Managing Partner shall (a) make all decisions relating to the business and affairs of the Partnership, including, without limitation, all decisions required or permitted to be made by the Managing Partner under this Agreement, and (b) take all action proposed to be taken by or on behalf of the Partnership. All such decisions or actions taken or made by the Managing Partner hereunder shall be binding upon all of the Partners and the Partnership. All approvals and consents required herein shall be -required prospectively, in advance of the action or decision to be taken or made. However, in the event any approval or consent is given retroactively, it shall have full force and effect under this Agreement to the same extent as if given prospectively. Any one of the officers or general partners of the Managing Partner shall have full power and authority to execute all documents and take all other actions as Managing Partner and thereby bind the Partnership and the Partners with respect thereto. The Managing Partner agrees to manage and control the affairs of the Partnership and to conduct the operations contemplated under this Agreement in accordance with and subject to the terms of this Agreement and in the same manner as is customary and usual in the development, construction, operation and maintenance of projects of comparable quality in the metropolitan area of the Project.
6.2 . Specific Authority . Subject to any limitations expressly set forth in this Agreement (including those of Sections 6.3 and 6.4), the Managing Partner shall be authorized to manage the development, construction and maintenance of the Project and shall be authorized to perform or cause -to be performed, at the Partnership's expense and in its name, the negotiations and coordination of all contracts and all subcontracts, the arrangement for all construction, interim and long-term mortgage loans and the coordination of all management, administrative and operational functions relating to the Project and the other business of the Partnership. The power and authority of the Managing Partner to make decisions with respect to the day-to-day business and affairs of the Partnership and to take such action for and on behalf of the Partnership as it deems necessary or appropriate to enable the Partnership to carry out its purposes as set forth in this Agreement, shall include, without limitation, full and complete power and authority on behalf of the Partnership to, subject, however, to the provisions of Sections 6.3 and 6.4:
(a) perform any and all acts necessary or appropriate to carry out the purposes of the Partnership (including but not limited to those actions necessary to perform the obligations of the Partnership as landlord under the C&P Lease and those actions set forth below);
(b) perform any and all acts necessary or appropriate to the development, construction, improvement, management and operation of the Project, including, but not limited to: construction and/or installation of the Site Improvements and the Buildings to be constructed on the Property (including those required by the C&P Lease and the C&P Plans); make applications for subdivision, resubdivision, platting, replatting, or objections to rezoning of all-or any portion of the Property or other property; commence, defend or settle any or all litigation, arbitration or other proceeding regarding the Partnership, the Property, the Project or any aspect thereof;
(c) negotiate, execute and deliver on behalf of and in the name of the Partnership any and all documents deemed necessary or desirable by the Managing Partner to consummate the acquisition of the Property, the construction of all Improvements on the Property or other property as required by the C&P Lease, the C&P Plans and the C&P Budget and the operation and maintenance of the Project by the Partnership;
(d) collect all rentals and other income accruing to the Partnership and pay all acquisition, development and construction costs, and expenses of operation, whether capital or otherwise;
(e) pay any debts and other obligations of the Partnership, including amounts due under any financing and other loans to the Partnership and costs of ownership, operation and maintenance of the assets of the Partnership;
(f) pay all taxes, assessments, -rents and other impositions applicable to the assets of the Partnership and undertake when appropriate and necessary any action or proceeding seeking to reduce such taxes, assessments, rents or other impositions;
(g) negotiate and execute for and on behalf of the Partnership, space, ground or other leases in or of the Project;
(h) procure and maintain with responsible companies such insurance as may be available in such amounts and covering such risks as are deemed reasonably necessary or appropriate by the Managing Partner;
(i) take and hold all property of the Partnership (real, personal and mixed) in the Partnership name, or in the name of a nominee, trustee or agent of the Partnership;
(j) sell, mortgage, exchange, transfer or otherwise dispose of the Property or the Project and all or any portion of the Partnership's assets;
(k) execute and deliver on behalf of and in the name of the Partnership, or in the name of a nominee of the Partnership, deeds, deeds of trust, deeds to secure debt, notes, leases, subleases, mortgages, bills of sale, financing statements, security agreements, easements and any and all other instruments necessary or incidental to the conduct of the Partnership's business and the financing thereof;
(l) contract for and coordinate all accounting and clerical functions of the Partnership and employ Deloitte, Haskins & Sells, Arthur Andersen & Co. or such other public accounting firm Approved by the Partners, lawyers and management or service personnel as may from time to time be required to carry on the business of the Partnership, including, but not limited to, preparation of tax returns and services to be performed by either Partner or their Affiliates (including leasing, management, architectural, construction and other services);
(m) pay the fees, commissions, and expense reimbursements described in Sections 9.1 and 9.3;
(n) borrow money, or refinance, recast, modify or extend any loan to the Partnership, either on a secured or unsecured basis, including without limitation, the construction, interim and long-term financing for the Project, each such loan or borrowing to be upon such terms, conditions and to contain such provisions, including those pertaining to personal liability of the Partners, security, repayment, interest rate, amortization of principal, lender or other participations (whether in the form of a joint venture or partnership with the lender, a net profits interest or otherwise);
(o) perform any and all other obligations provided elsewhere in this Agreement to be performed by the Managing Partner; and
(p) otherwise provide for the day-to-day management of the Partnership and the Project on such terms as the Managing Partner shall determine in the exercise of its sole discretion.
6.3 . Limitations on Authority . Notwithstanding anything to the contrary in this Agreement, without the Approval of the Partners, the Managing Partner shall not have the right or power to do any of the following ("Major Decisions"):
(a) agreeing to purchase (or otherwise acquire) real property, or any material interest therein, selling or otherwise transferring or mortgaging or encumbering all or part of any of the Partnership's real property, other than the acquisition of the Property pursuant to this Agreement and other than in connection with the Construction Loan, or further subdividing, resubdividing, platting or replatting any of the Partnership's real property;
(b) approving or making any changes to the C&P Plans or C&P Budget, other than as provided in or in accordance with (i) the C&P Plans and the C&P Budget previously Approved by the Partners and (ii) Section 6.3(d) below;
(c) other than as provided in subparagraph (d) below, obtaining any loan or other financing or making other credit arrangements in the name of the Partnership, agreeing to pay any fees or commissions in connection with any such loan or credit arrangements, or agreeing to or effecting any material change in the terms of any such financing or credit arrangement;
(d) incurring any single obligation or making any single expenditure on behalf of the Partnership unless such obligation or expenditure is due to an emergency, and the Managing Partner in good faith believes such expenditure is necessary in order to preserve or protect the assets of the Partnership or to prevent imminent bodily harm to persons on the Property or affected by activities thereon;
(e) entering into, cancelling or modifying any construction contract for the Improvements;
(f) executing or approving any single change order or any aggregation of change orders arising under a construction contract required to be Approved by the Partners;
(g) entering into any other contract on behalf of the Partnership or modifying any such contract;
(h) entering into or amending any lease or other arrangement involving space in or of any part of the Property or the Improvements;
(i) waive, excuse, condone, discount, set-off, compromise or in any manner release or discharge C&P of and from any of the obligations, covenants, conditions and agreements under the C&P Lease, by C&P to be kept, observed and performed including the obligation to pay the rentals thereunder, in the manner and time specified in the C & P Lease;
(j) cancel, terminate or consent to any surrender of the C & P Lease or commence an action of ejectment or any summary proceedings for dispossession of the tenant under the C&P Lease, or exercise any right of recapture provided therein;
(k) modify, change, supplement or in any way alter or amend the terms of the C&P Lease;
(1) take any action or make any decision for which the approval or consent of the landlord is permitted or required pursuant to the terms of the C&P Lease;
(m) take any action or make any decision for which the vote, approval or consent of the Partnership is permitted or required in connection with Harmans Road Storm Water Association, Inc., a Maryland non-stock corporation;
(n) except as provided in subparagraph (d) above, making any capital improvements, repairs, alterations or changes to the Project;
(o) approving and adopting any Annual Budget or any modification thereto;
(p) other than for permitted transfers as provided in Sections 12.3 and 12.4, admitting any other Person to the Partnership as a Partner or providing any lender or tenant with an interest in Partnership capital, Profits or gross or net proceeds from any sale (or hypothetical sale) of Partnership property, other than as set forth in the C&P Lease;
(q) determining the maximum and minimum working capital and reserve of the Partnership;
(r) selecting or varying tax depreciation methods, any decision to make or revoke any tax elections available to the Partnership, changing the Partnership's method of accounting for federal income tax purposes or the Partnership's fiscal year, and making any other decisions with respect to the treatment of various transactions for tax purposes;
(s) any matters relating to litigation, including the commencement or defense of any claims or suits, and the adjustment, settlement, or the compromise of any claim, obligation, debt, demand, suit or judgment against the Partnership other than any matter involving a claim (or group of related claims) not made by C & P of less than Fifteen Thousand Dollars ($15,000) as reasonably determined by the Managing Partner;
(t) submitting a Partnership claim or liability to arbitration or reference, except pursuant to a contract by which the Partnership is bound or with regard to any matter involving a claim (or group of related claims) of less than Fifteen Thousand Dollars ($15,000) as reasonably determined by the Managing Partner;
(u) entering into any contract with a Partner, an Affiliate thereof or any other Related Entity, or any arrangement with a Partner, Affiliate or other Related Entity, except as otherwise specifically contemplated herein;
(v) entering into, cancelling or modifying the terms and conditions of any agreement providing for the management or leasing of all or any portion of the Property or the Improvements thereon;
(w) determining whether to repair, rebuild or replace any Improvements in the event of a fire or other casualty and deciding whether to continue to operate in the event a portion of the Project is taken in any eminent domain, condemnation, compulsory acquisition or similar proceeding by any competent authority for any public or quasi-public use or purpose;
(x) approving the carrier of the Partnership's insurance and any modification of the terms, conditions and amount of insurance coverage for the Partnership described in Exhibit "D" attached hereto;
(y) retaining any broker, agent or other independent contractor (1) to procure leases of or tenants for the Project, or (2) to sell, list for sale or otherwise procure buyers of all or any part of the Project, or (3) to procure any financing for the Project;
(z) selecting or utilizing accountants for the Partnership other than those specified in Section 6.2(1) hereof;
(aa) changing the nature of the Partnership's business and purposes;
(bb) using Partnership property as collateral for any debt or obligation of any Person other than the Partnership, or causing the Partnership to become a surety or guarantor of any debt or obligation of any Person other than the Partnership;
(cc) confessing any judgment against the Partnership;
(dd) assigning Partnership property in trust for benefit of creditors or an assignee's promise to pay the debt of the Partnership;
(ee) except as provided in (d), make any payment or disbursement of Partnership funds prior to the Rent Commencement Date (as such term is defined in the C & P Lease) unless and until the draw request detailing such expenditures has been Approved by the Partners (for this purpose, the Managing Partner shall submit the proposed draw request to the other Partner for its approval in a timely fashion such that Partnership expenses will be paid when due); and
(ff) taking any other action or making any other decision which, under the terms of this Agreement, is required to be Approved by the Partners or is subject to the Approval of the Partners.
Notwithstanding the foregoing provisions of this Section 6.3 to the contrary, any actions of the Partnership to enforce the obligations of PCI pursuant to the Contribution Note of PCI and PCI's other obligations pursuant to Section 5.1 hereof, including the election to pursue any remedy provided for therein, shall not be a Major Decision, and Linpro shall be entitled to take such action to enforce or collect such obligations without any approval or consent of any other Partner. Notwithstanding the provisions of this Section 6.3 to the contrary, any exercise by the Partnership or Nondefaulting Partner of the rights provided under Section 5.2(e) or Article XIII against the Defaulting Partner shall not be a Major Decision, and the Partnership and Nondefaulting Partner shall be entitled to take the actions described therein without any approval or consent of any other Partner. Furthermore, notwithstanding the provisions of this Section 6.3 to the contrary, any actions of the Partnership or PCI to enforce the obligations of Linpro pursuant to the construction completion guaranty given by Linpro to the Construction Lender shall not be a Major Decision and the Partnership and PCI shall be entitled to take such action to enforce such obligations without any approval of consent of any other Partner. The consent or dissent of the other Partner to any Major Decision (other than the approval of a Budget) shall be conveyed in writing to the Managing Partner within ten (10) days after receipt by the other Partner of written notification of such proposed action. The failure of the other Partner to respond within such ten-day period shall be deemed to be approval of such action by the other Partner. If the Managing Partner receives the approval, deemed approval or consent of the other Partner to such Major Decision, the Managing Partner shall be authorized to implement such action on the same or substantially similar terms authorized by the other Partner without further authorization, consent or involvement from the other Partner.
6.4 . Partner Meetings . (a) Until substantial completion of construction of the Improvements, regular monthly meetings of the Partners shall be held at the principal place of business of the Partnership (as specified in Section IV), or at such other place agreed to by the Partners. From and after substantial completion of construction of the Improvements, meetings of the Partners shall be held at such times as shall be specified by the Managing Partner (but not less frequently than quarterly, unless otherwise agreed to by the Partners). The chairman of such meeting shall be appointed by the Managing Partner. The chairman shall appoint persons to take minutes and perform similar functions. Any Partner may call a special meeting on not less than ten (10) days prior written notice to the other Partner, specifying the time, place and the purpose of such special meeting. Prior notice of any special meeting need not be given, however, if such notice is waived in writing by all the Partners. In addition, the attendance of. a Partner or its Representative at a special meeting shall constitute a waiver of notice thereof, except where such Partner Representative gives advance notice to the other Partner that he is attending such meeting for the express purpose of objecting to the transaction of any business threat on the grounds that such meeting is not lawfully called or convened. The minutes of each Partner's meeting (whether a regular or special meeting or whether held in person or by telephonic conference) shall be in writing and shall set forth in reasonable detail the actions, votes or approvals .taken at such meeting. The minutes of such meeting shall be delivered to each Partner as soon as reasonably practical following such meeting, and if no Partner objects in writing to the contents of such minutes within ten (10) business days after receipt of such written minutes, such written minutes shall be deemed approved and acknowledged to be a complete and accurate account of such meeting by each Partner and by the Representatives of each of the Partners.
(b) At each Partners' meeting the Managing Partner shall inform the other Partner of the status of Partnership operations, including negotiations of loans, construction contracts or other contracts, progress on the development and construction of the Improvements and any other affairs or events material to the Partnership's business, and the C&P Budget and any Annual Budget and shall consult with the other Partner with respect to such matters. Unless otherwise consented to in writing, during the construction period, all decisions of the Partners with regard to Major Decisions shall be made at Partner meetings called in according with the provisions of Section 6.4(a). Any actions required or permitted to be taken at any regular or special meeting of the Partners may be taken by means of (i) a conference using telephonic or other equipment at which all members participating can hear and speak to each other (with the action taken during such conference to be properly reduced to writing, distributed to all Partners and objections given within ten business days of such distribution and filed in the records of the Partnership) or (ii) by means of a writing setting forth the action so taken, provided, that any actions taken or decision reached pursuant to such writing shall be concurred in, and any such written consent shall be executed, by each Partner or its Representative. All actions taken and decisions reached pursuant to this Section 6.4 shall be deem to have been taken and reached pursuant to a meeting of the Partners. From and after substantial completion of construction of the Improvements, the Managing Partner shall make regular progress reports to the other Partner of the status of Partnership operations, progress on the development of any Annual Budget, and any other affairs or events material to the Partnership's business, including any upcoming or proposed decision of the Partners with regard to Major Decisions.
(c) Each Partner hereby designates the individuals specified in Exhibit "B" attached hereto as the "Representatives" (herein so called) of such Partner. Each such Representative of a Partner shall be and hereby is individually authorized and empowered as agent for such Partner to speak, act, direct, consent and sign on behalf of and to bind such Partner in all matters pertaining to the control and management of the Partnership and its business and affairs. Each Representative of a Partner is specifically and expressly authorized to exercise any and all rights, powers and duties expressly granted in this Agreement or by law to such Partner or to such Partner Representative, and any action by a Representative of a Partner pursuant to this Agreement shall, except as provided in this Section 6.4(c), be binding upon the Partner represented by such Representative. All consents, agreements, directions, approvals, signatures or other actions by or of a Partner required or permitted under this Agreement or by law shall be deemed to mean and refer to the consent, agreement, direction, approval, signature or other actions of any one of the Representatives of such Partner. Each of the persons referred in this Section 6.4(c) as a Representative of a Partner shall be authorized to act on behalf of such Partner, unless and until the Partner represented by such Representative shall have removed such Representative as set forth below. A Partner may remove one or more of its Representatives at any time by giving at least two (2) days prior written notice to the Partnership and the other Partner; provided, however, that each Partner shall at all times have at least two (2) Representatives appointed for it as provided in this Section 6.4(c). A Partner may appoint additional Representatives at any time by giving at least two (2) days prior written notice to the Partnership and the other Partner (such notice of appointment of additional Representatives to include the names and addresses of such additional Representatives and the effective date of their appointment). No Representative of a Partner appointed under this Section 6.4(c) shall be personally liable for any obligations of such Partner and shall be deemed for all purposes merely to be an agent of such Partner and the performance of their respective duties under this Agreement, the Representatives shall use reasonable efforts to conduct the business of the Partnership in a good and businesslike manner and in accordance with good industry practice. The Partnership to the fullest extent permitted by law shall indemnify and hold harmless each Representative from and against any and all claims, damages, liabilities, costs (including, without limitation, the cost of litigation and reasonable attorney fees), damages and causes of action arising out of, resulting from or attributable to the management of the partnership and the conduct of its business, affairs and operations by the Representatives, except where the claim at issue is based upon the bad faith, gross negligence, fraud or willful misconduct of such Representative. The indemnification rights herein contained shall be cumulative of, and in addition to, any and all rights, remedies and recourse to which Representatives shall be entitled at law or in equity.
6.5 . Appointment and Removal of Managing Partner .
(a) Initial Managing Partner . Linpro shall serve as the initial Managing Partner of the Partnership. Each Partner considers it essential to the success of the Partnership's business that the Key Persons of the other Partner be active in the management of Partnership affairs. If all of the Key Persons of a Partner cease to be active in the management of the Partnership, then that Partner shall immediately appoint at least one replacement Key Person acceptable to the other Partner in its sole but reasonable discretion. For purposes of this Section 6.5(a), Key Persons shall be considered to be "active" in the management of the Partnership if they regularly supervise, and consult on all Major Decisions with, individual employees or partners of the Partner (or Affiliates thereof) who are qualified by experience to undertake the management responsibilities delegated to them by such Key Persons.
(b) Change or Removal of Managing Partner .
	(i) The Managing Partner may be removed as Managing Partner for cause upon the written request of the other Partner (provided the other Partner is not itself a Defaulting Partner at such time). Such written request shall be delivered to the Managing Partner and shall state the cause for removal and the effective date of such removal, which effective date may be immediately upon delivery of the notice or thereafter. If the Managing Partner disputes whether cause for removal exists or whether the other Partner has authority to remove the Managing Partner, the Managing Partner shall continue to act as such but, at the sole election of the other Partner, the matter shall be submitted to arbitration to determine if cause for removal exists or if the other Partner as such authority (and such determination shall be binding on the Partners). "Cause" for the removal of the Managing Partner shall mean gross negligence, fraud, malfeasance, or knowing violation of applicable laws which materially and adversely affects the Partnership. In addition, the Managing Partner may be removed as Managing Partner at any time within 90 days after the other Partner receives written notification or obtains actual knowledge of the occurrence of any of the following events:
		(A) An Event of Default described in any of clauses (a) - (g) of Section 13.2 hereof by the Managing Partner or any general partner or officer thereof;
		(B) Dilution of the Managing Partner's Percentage Interest by more than 50% of its original Percentage Interest or any subsequent dilution occurring thereafter; or
		(C) With respect to Linpro only, the combined net worth of all "managing partners" of Linpro (as defined in this Agreement) shall be reduced to an amount less than Twenty Million Dollars ($20,000,000), based on the annual financial statements described in Section 16.2 hereof;
	provided, however, that the Managing Partner may not be removed upon the grounds described in clauses (A) - (D) above if at the time of such removal (x) the C&P Lease is in full force and effect, and (y) such removal would constitute, a default by the Partnership as landlord under the C&P Lease, unless C&P waives in writing its right to declare such removal as constituting a default by landlord thereunder; and further provided, if removal occurs prior to the Rent Commencement Date (as defined in the C&P Lease) the other Partner shall have the option to remove the Managing Partner as Managing Partner of the Partnership, but allow such removed Managing Partner to continue to manage construction of the Project.
	(ii) Promptly after removing a Managing Partner the other Partner shall be entitled to and is authorized to hire, at Partnership expense, an unaffiliated third party manager to manage the Partnership and the Project, without any further consent or authorization of the removed Managing Partner (such action not being a Major Decision). Promptly after being removed, the former Managing Partner shall deliver to the other Partner all books, records, correspondence, contracts, purchase orders, documents, bills, equipment, supplies and other. Assets or rights - of the Partnership relating to the management and operation of the Partnership, and shall otherwise cooperate with the reasonable requests of the other Partner in making an orderly transition of management authority and responsibility. The legal, accounting and any other costs incurred by the Partnership or other Partner in bringing or participating in any action to establish cause or other grounds to, or to compel or enforce removal of, the Managing Partner in accordance with this Section 6.5, if any, shall be an offset to any and all amounts distributable to the former Managing Partner and/or to the amount to the former Managing Partner pursuant to Sections VIII and XIV hereof in the event that such action results (by settlement or otherwise) in removal of the Managing Partner on the grounds specified in this Section 6.5. The procedure established for removal of the Managing Partner in this Section 6.5 is in addition to and not in lieu of the rights of the other Partner under Section XIII hereof, and the other Partner may pursue its rights under either or both of such sets of provisions, including any rights and remedies available at law or in equity (other than with regard to any Event of Default described in Sections 13.2(a), (b), (c), and (i) of this Agreement).
6.6 . Third Party Reliance on Authority of Managing Partner . The signed statement of. the Managing Partner (acting through any one of its general partners, if it is a partnership, or by an officer, if it is a corporation), reciting that the Managing Partner (and such general partner of the Managing Partner, if it is a partnership, or such officer if it is a corporation), has authority to undertake any act or has the necessary votes or consents of the Partners to take any such act, when delivered to any third party (including any lender, tenant or purchaser, including any purchaser of the Project or other property from the Partnership, but excluding any Affiliate of the Managing Partner) ("Third Party"), shall be all the evidence that any such Third Party shall need concerning the capacity of such Managing- Partner and any general partner thereof; and any such Third Party shall be entitled to rely upon such statement and shall not be required to inquire further as to any of the facts contained in such statement, said facts being deemed to be true insofar as such Third Party is concerned. After delivering such statement, the Managing Partner and any general partner or officer thereof, by its or his signature alone, may sign any instrument and bind the Partnership and the Partners and encumber the Partnership property, just as though all of the Partners and all of the partners or officers of the Managing Partner had also signed. Each of the Partners and/or its assigns hereby waive any and all defenses or other remedies that may be available against any such Third Party or other Person (excluding an Affiliate) to contest, negate or disaffirm any action of the Managing Partner in connection with any such statement provided pursuant to this Section 6.6. Each contract, agreement,. deed, lease, mortgage, security agreement, promissory note or other instrument or document executed by the Managing Partner or its representative with respect to any business or property of the Partnership shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery thereof, this Agreement was in full force and effect, (b) such instrument or document was duly executed in accordance with the terms and provisions of this Agreement and is binding upon the Partnership and the Partners and (c) the Managing Partner or its representative was duly authorized and empowered to execute and deliver any and every such instrument or document for and on behalf of the Partnership. Such statement shall not, however, have any effect between the Partners, unless the action in question was in fact authorized pursuant to this Agreement.
6.7 . Time Devoted to Partnership . Each Partner shall devote that portion of its time to the Partnership affairs necessary to fulfill its obligations hereunder as may be reasonably required by the Partnership business. Any Partner may engage in, acquire or possess an interest or interests in other business ventures of any nature or description, independently or with others, whether or not competitive with the business of the Partnership, including but not limited to, the real estate business in all its phases, which shall include without limitation, ownership, operation, management, syndication and development of real property, and neither the Partnership nor any Partner shall have any rights in or to such independent ventures or the income or profits derived therefrom. No Partner shall be obligated to present any particular investment opportunity or other opportunity to the Partnership or to the other Partner, even if such opportunity is of a character which, if presented to the Partnership or the other Partner, could or might be taken by the Partnership or such other Partner, and each such Partner shall have the right to take any investment for its own account (individually or as trustee) or to recommend any particular investment opportunity to any other Person whatsoever. Each Partner hereby acknowledges that each other Partner or its Affiliates currently own, or may in the future acquire, interests in real estate projects in the immediate vicinity of the Property that are or may be in competition with the Project.
6.8 . Limitation on Liability of the Partners; Indemnification. No Indemnitee shall be liable, responsible or accountable in damages or otherwise to any Partner for any acts performed (or failure to act) by such Indemnitee in good faith and reasonably believed to be within the scope of the authority granted to such Person by or in accordance with this Agreement, specifically including any such act or failure to act which is attributable in whole or in part to the negligence of such Indemnitee, but specifically excluding any such act or failure to act which is primarily attributable to gross negligence, malfeasance (including but not limited to knowing violation of applicable laws that materially and adversely affects the Partnership) or fraud. To the fullest extent permitted by law, the Partnership (but not any Partner) shall indemnify and hold harmless each Indemnitee for any loss, damage, liability, cost or expense (including reasonable attorneys' fees) arising out of any act or failure to act by such Indemnitee, if such act or failure to act is in good faith and is reasonably believed to be within the scope of the authority granted to such Person by or in accordance with this Agreement, specifically including any act or failure to act which is attributable in whole or in part to the negligence of such Indemnitee, but specifically excluding any such act or failure to act which is primarily attributable to gross negligence, malfeasance (including but not limited to knowing violation of applicable laws that materially and adversely affects the Partnership) or fraud. The termination of a proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that an Indemnitee did not act in good faith. The Partnership shall also provide such indemnification in any action, suit or proceeding by or inn the right of the Partnership to procure a judgment in its favor. Expenses incurred in defending any action, suit or proceeding shall be paid by the Partnership in advance of final disposition of such proceeding upon receipt of an undertaking (which shall be secured by a pledge of the indemnified Partner's Partnership Interest or other collateral reasonably acceptable to the Partners) by or on behalf of the Indemnitee to repay such amount with interest at the Base Lending Rate from the date of any such advance if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Partnership as authorized thereunder. The indemnification called for by this Section 6.8 shall continue as to any Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns, administrators and personal representatives of such Indemnitee. The Partnership may purchase and maintain insurance on behalf of any one or more of the Indemnitees and any other Person, as the Partners shall determine, against any liability that may be asserted against or expense that may be incurred by such Person in connection-with the activities of the Partnership, whether or not the Partnership would have the power to indemnify such Person against such liability thereunder. An Indemnitee shall not be denied indemnification in whole or in part because the Indemnitee had an interest in the transaction with respect to which indemnification applies, if the transaction was otherwise permitted by the terms of this Agreement. The provisions of this Section 6.8 are for the benefit of the Indemnitees and their heirs, successors, assigns, administrators and personal representatives, and shall not be deemed to create any rights for the benefit of any other Person. Each Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by such Partner to be genuine and to have been signed or presented by the proper party or parties. Each Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by such Partner. The opinion of such consultant or adviser as to matters which such Partner reasonably believes to be within such consultant's or adviser's professional or expert competence shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by such Partner in good faith and in accordance with such opinion (provided, however, in the event a Partner seeks to rely on such an opinion for purposes of this Section 6.8, such opinion shall be confirmed in writing by the consultant or advisor that rendered such opinion). Notwithstanding the foregoing, the provisions of this Section 6.8 shall not apply to or with respect to any of the actions or obligations of Linpro under or in connection with the construction completion guaranty described in Section 6.9 hereof.
6.9 . Construction Completion Guaranty . For the benefit of the Construction Lender, Linpro, in its individual capacity and not in its capacity as a Partner of the Partnership, shall execute a construction completion guaranty in a form acceptable to Linpro and the Construction Lender with respect to the construction of the Improvements upon the Property. Payments made or costs incurred by Linpro in fulfilling its obligations under its construction completion guaranty to the Construction Lender shall not be capital contributions of Linpro to the Partnership, nor shall they increase the capital account of Linpro in the Partnership unless funded through capital contributions pursuant to Sections 5.2 (b) or (c). Linpro hereby waives any right of subrogation it may have to the position of the Construction Lender as against the Partnership or any of the Partners, any right of co-contribution, reimbursement or indemnity it may have with respect to fulfillment of its obligations under the construction completion guaranty, except to the extent Linpro funds such obligations through capital contributions pursuant to Sections 5.2(b) or (c) hereof, in which case it shall have (but be limited to) the remedies available in Section 5.2(d) or Section XIII hereof with respect to the failure, if any, of PCI to contribute capital as required under such Sections 5.2(b) or (c).
SECTION VII Allocations of Profits and Losses
7.1 . Allocation of Profits and Losses .
(a) General Allocations . For each year of the Partnership (or part thereof), Profits or Losses will first be allocated between the Partners (after giving effect to Section 7.3 and Section 7.1(b)) so as to eliminate or minimize proportionately, the differences between their respective Partially Adjusted Capital Accounts and Target Accounts for that fiscal year; provided, however, that no portion of the Profits for any fiscal year shall be allocated to a Partner whose Partially Adjusted Capital Account is greater than or equal to its Target Account and no portion of the Losses for any fiscal year shall be allocated to a Partner whose Target Account is greater than or equal to its Partially Adjusted Capital Account for such year.
(b) Other Special Allocations .
	(i) If the Partnership has a Profit for any fiscal year (determined prior to giving effect to this Section 7.1(b)(i)), each Partner whose Partially Adjusted Capital Account is greater than his Target Account for such year shall be allocated items of Partnership expense or loss for such year equal to the difference between his Target Account and his Partially Adjusted Capital Account. In the event the Partnership has insufficient 'items of expense or loss for such year to satisfy the previous sentence with respect to all such Partners, the available items of expense or loss shall be divided among such Partners in proportion to such differences.
	(ii) If the Partnership has a Loss for any fiscal year (determined prior to giving effect to this Section 7.1(b)(ii)), each Partner whose Target Capital Account is greater than his Partially Adjusted capital Account for such year shall be specially allocated items of Partnership income or gain for such year equal to the difference between his Target Capital Account and his Partially Adjusted Capital Account. In the event the Partnership has insufficient items of income or gain for such year to satisfy the previous sentence with respect to all such Partners, the available items of income or gain shall be divided among the Partners in proportion to such differences.
7.2 . Tax Allocations . For federal income tax purposes, except as otherwise provided in Sections 7.3 and 7.4, each item of income, gain, loss and deduction of the Partnership shall be allocated among the Partners in accordance with the manner in which the corresponding item of Profit or Loss is allocated.
7.3 . Special Allocations .
(a) Minimum Gain Chargeback . Notwithstanding any other provision of this Section VII, if there is a net decrease in Partnership Minimum Gain or Partner Minimum Gain during a Partnership taxable year, prior to any other allocation, each Partner shall be specially allocated items of Partnership income and gain for such year (and if necessary, subsequent years) in an amount and manner required by Treasury Regulations Section 1.704-1T(b)(4)(iv)(e) or 1.704-1T(b)(4)(iv)(h), or any successor provisions.
(b) Qualified Income Offset . If a Partner receives an unexpected adjustment, allocation or distribution as described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d), items of Partnership income or gain shall be specially allocated to such Partner in an amount and manner sufficient, to eliminate, to the extent required by Treasury Regulations under Code Section 704(b), the Adjusted Capital Account Deficit, of such Partner as quickly as possible; provided that an allocation pursuant to this Section 7.3(b) shall be made only if and to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 7.3 have been tentatively made as if-this Section 7.3(b) were not in this Agreement. This Section 7.3(b) is intended to comply with Treasury Regulation Section 1.704-1(b)(2)(ii)(d) or any successor provision thereto and shall be interpreted consistently therewith.
(c) Nonrecourse Deductions . Nonrecourse Deductions of the Partnership shall be allocated to the Partners in proportion to their respective Percentage Interests.
(d) Allocation of Partner Nonrecourse Deductions . Any Partner Nonrecourse Deductions for any fiscal year or other period shall be allocated to the Partner that made or guaranteed or is otherwise liable with respect to the loan to which such Partner Nonrecourse Deductions are attributable in accordance with principles under Treasury Regulation Section 1.704-1T(b)(4)(iv)(h) or any successor provision.
(e) Code Section 754 Adjustment . To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining capital accounts, the amount of such adjustment to the capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their capital accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
7.4 . Section 704(c) Compliance . In accordance with section 704 (c) of the Code and the applicable Treasury regulations thereunder, income, gain, loss, and deduction, including tax depreciation, with respect to any property contributed to the capital of the Partnership, or with respect to any property which properly has, in accordance with Treasury Regulation Section 1.704-1(b) (2) (iv) (f) and (g), a Book Basis different than its adjusted tax basis, shall, solely for tax purposes, be allocated among the Partners so as to take into account any variation between the adjusted tax basis of such property to the Partnership and the Book Basis of such property. Allocations pursuant to this Section 7.4 are solely for purposes of federal, state and local taxes and shall not affect, nor in any way be taken into account in computing, any Partner's Capital Account or share of Profits, Losses or other items or distributions pursuant to any provision of this Agreement.
SECTION VIII Distributions
8.1 . Net Cash Flow . After providing for the satisfaction of all the current debts and obligations of the Partnership, after any required payments on any loan or other financing, the Partnership shall, as soon as reasonably practical, make monthly distributions and annual adjusting distributions of Net Cash Flow of the Partnership, to the extent available (after establishment of appropriate and reasonable reserves, as determined by the Partners) to the Partners in the following manner and order of priority:
(a) first, an amount (under this clause (a)) of Net Cash Flow up to the aggregate, cumulative unpaid Rent Change Order Preferred Returns of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's cumulative, unpaid Rent Change Order Preferred Return;
(b) second, an amount (under this clause (b)) of Net Cash Flow up to the Windfall Net Cash Flow shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests;
(c) third, for the period beginning on the date of formation of the Partnership and continuing until the Tenth Anniversary, all (under this clause (c)) of the remaining Net Cash Flow for such period shall be distributed to PCI; and
(d) fourth, for the period commencing on the date immediately after the Tenth Anniversary and continuing until the termination of the Partnership, all remaining Net Cash Flow for such period (after distributions pursuant to clause (a) and (b) above) shall be distributed to the Partners as follows:
	(i) first, an amount (under this clause (it) (a)) of such remaining Net Cash Flow up to the amount of the aggregate, cumulative unpaid Preferred Returns of the Partners as of the date of distribution hereunder, pro rata in proportion to the respective amounts of each Partner's cumulative, unpaid Preferred Return as of such date;
	(ii) next, an amount (under this clause (d) (ii)) of such remaining Net Cash Flow up to the aggregate, cumulative unpaid Deficit Contribution Preferred Returns of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's cumulative, unpaid Deficit Contribution Preferred Return; and
	(iii) thereafter, any remaining balance of Net Cash Flow of the Partnership shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests.
In the event that the Partners' Percentage Interests change within a Partnership fiscal year (other than by reason of distributions pursuant to this Section VIII), any Net Cash Flow distributed pursuant to clause (b) or (d) (iii) with respect to such year shall be distributed pro rata in proportion to both the number of days in such year and the Partners I respective Percentage Interests that were in effect on such days.
For purposes of computing the amount of PCI'S cumulative, unpaid Preferred Return distributable to PCI under clause (d)(i) above, PCI's cumulative Preferred Return shall be reduced by the lesser of (i) the amount of PCI's Preferred Return on the Tenth Anniversary, or (ii) the amount of Net Cash Flow and proceeds of any Interim Capital Transactions distributed or distributable to PCI during or with respect to the period ending on the Tenth Anniversary under Sections 8.1(c) and 8.2(c) hereof. For the purposes of computing the amount of the Partners' cumulative, unpaid Deficit Contribution Preferred Returns distributable under clause (d)(ii) above, no distributions under Section 8. 1 (a), (b) or (c) shall be regarded as paid in reduction of a Partner's Deficit Contribution Preferred Return.
8.2 . Distributions of Proceeds of Interim Capital Transactions . After providing for the satisfaction of all the current debts and obligations of the Partnership and after establishing reserves necessary to fund construction costs as set forth in the C&P Plans and C&P Budget, including any required payments on any loan or other financing and excluding any non-required principal prepayments of Partnership debts or liabilities (which shall be made only with the Approval of the Partners) and after distribution to Linpro or its Affiliate of the Project Development Distribution (as provided in Section 8.4 hereof), the Partnership shall, as soon as reasonably practical following an Interim Capital Transaction, distribute the net proceeds of such Interim Capital Transactions to the Partners to the extent available (after establishment of appropriate and reasonable reserves, as determined by the Partners) in the following manner and order of priority:
(a) first, an amount (under this clause (a)) of such net proceeds up to the aggregate balance of the Rent Change Order Contribution Accounts of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's Rent Change Order Contribution Account;
(b) second, an amount (under this clause (b)) of such net proceeds up to the aggregate balance of the Deficit Contribution Accounts of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's Deficit Contribution Account;
(c) third, an amount (under this clause (c)) of such net proceeds up to the aggregate balance of the cumulative unpaid Preferred Return of the Partners as of the date of distribution hereunder shall be distributed to the Partners in proportion to the respective amounts of the cumulative, unpaid Preferred Return of each such Partner as of such date;
(d) fourth, an amount (under this clause (d)) of such net proceeds up to the aggregate balance of the Unrecovered Capital Accounts of the Partners shall be distributed to the Partners in proportion to the respective balances in the Unrecovered Capital Account of each such Partner; and
(e) thereafter, any remaining net proceeds shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests at the time of the transaction or event generating the net proceeds distributable under this clause (e).
8.3 . Distribution of Proceeds Available Upon Dissolution and Winding Up . Upon the dissolution and winding up of the Partnership, after providing for the satisfaction of all the debts and obligations of the Partnership and after any required payments on any loan or other financing, the Partnership shall, as soon as reasonably practical, distribute net proceeds available (after establishment of appropriate and reasonable reserves, as determined by the Partners) upon dissolution and winding-up to the Partners within the time period specified by Treasury Regulation Section 1.704-1(b) (2) (ii) (b) (2) in the following manner and order of priority (after allocating Profit or Loss and any items of income, gain, loss or deduction pursuant to Section VII hereof):
(a) first, an amount (under this clause (a)) of such net liquidation proceeds up to the aggregate balance of the Rent Change Order Contribution Accounts of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's Rent Change Order Contribution Account;
(b) second, an amount (under this clause (b)) of such net liquidation proceeds up to the aggregate balances of the Deficit Contribution Accounts of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's Deficit Contribution Account;
(c) third, an amount (under this clause (c)) of such net liquidation proceeds up to the aggregate amount of the cumulative, unpaid Preferred Return of the Partners at that time shall be distributed to the Partners in proportion to the respective cumulative, unpaid Preferred Return of each such Partner;
(d) fourth, an amount (under this clause (d)) of such net liquidation proceeds up to the aggregate balance of the Unrecovered Capital Accounts of the Partners at that time shall be distributed to the Partners in proportion to the respective balance in the Unrecovered Capital Account of each such Partner; and
(e) then, any remaining net liquidation proceeds shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests at the time of such distribution.
To the extent any reserves are established for contingent, unforeseen or other liabilities or obligations of the Partnership, as set forth above, such reserves shall be held for the purpose of paying such contingent, unforeseen or other liabilities or obligations and, at the expiration of such period as deemed reasonably advisable by the Partner liquidating the assets of the Partnership, of distributing the balance of such reserves in the manner provided herein above in this Section 8.3.
8.4 . Project Development Distributions . Notwithstanding any other provision of Section 8.1, 8.2 or 8.3 to the contrary, Linpro or its Affiliate shall be entitled to receive a distribution of the Project Development Distribution, which amount shall be distributed in cash out of the Construction Loan proceeds on the date that both of the following shall have occurred (a) the Partnership shall have achieved the "Commencement of Construction" (as defined in the C&P Lease), which refers generally to the date that the Partnership has obtained all required building permits or other governmental authorizations to commence construction of the Project and (b) the Partnership has received (or PCI is reasonably satisfied that the Partnership has made its reasonable efforts to obtain) a written acknowledgment from C&P that "Commencement of Construction" shall have occurred.
8.5 . Cost Savings Distributions . Notwithstanding any other provision of Sections 8.1, 8.2 or 8.3 to the contrary, in the event that actual construction costs incurred in connection with the construction of the Improvements are less than the' amount of such construction costs set forth on the C&P Budget, the amount of such cost savings, net of the amount to be paid or distributed to any other party pursuant to the Omni Construction Contract, up to an aggregate amount of $200,000 of such net cost savings, shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests at the time of such distribution, and any additional amount of such cost savings over $200,000 shall be distributed 100% to PCI. Such cost savings distributions shall be made with 60 days after completion of construction of the Improvements.
8.6 . Place of Distribution . All cash distributions to PCI shall be made directly to PCI at Suite 600, 900 19th Street, N.W., Washington, D.C. 20006. All cash distributions to Linpro shall be made directly to Linpro at Suite 211, 1717 Elton Road, Silver Spring, MD 20903. Either Partner may change its address for distributions by notice to the Managing Partner.
8.7 . Distributions in Kind . If any assets of the Partnership shall be distributed in kind, such assets shall be distributed to the Partners entitled thereto as tenants-in-common in the same proportions in which such Partners would have been entitled to cash distributions, as determined after application of Section 5.9 hereof.
SECTION IX Partnership Expenses, Reserves and Fees
9.1 . Partnership Expenses . Except as otherwise provided in the Omni Construction Contract, all of the Partnership's expenses shall, where practical, be billed directly to and paid by the Partnership; provided, however, that the Partnership shall not be required to pay any Partner's allocable overhead costs (other than reasonable allocation of Linpro's accounting and data processing services, which amount shall be reimbursed to Linpro). The Partners shall be entitled to be reimbursed for those costs or expenses incurred by them on behalf of the Partnership prior to its formation, such as letter of credit fees with respect to the contract for' the purchase of the Property, architectural and engineering costs and the other expenses Approved by the Partners, set forth in Exhibit E attached hereto, and shall not be entitled to be reimbursed f or any other pre-formation costs incurred by them. In the event any Partnership costs and expenses are or have been paid by a Partner on behalf of the Partnership, then, except as expressly provided herein to the contrary, such Partner shall be entitled to be reimbursed for such payment or expense as long as incurring the obligation to pay such costs or expenses was Approved by the Partners if so required under this Agreement and such payment is reasonably necessary for Partnership business and is reasonable in amount.
9.2 . Reserves . (a) From and after the date of this Agreement, the Managing Partner may establish one or more separate operating, replacement and working capital reserve accounts (" Reserve Account ") with respect to the Project. In such amount as the Partners shall determine to be appropriate, and may deposit therein from time to time such amounts from net revenues from operations and net proceeds received by the Partnership from capital transactions before any distributions of any such revenues or proceeds to the Partners. In setting the amount of Partnership reserves, the Partners acknowledge that it is their intent to set only such reserve levels as are reasonably necessary to meet the current needs of the Partnership and not to accumulate funds f or the purposes of prepaying existing Partnership debt or avoiding or delaying the borrowing of additional funds for the construction or refinancing of the Improvements, to the extent that such accumulation would unreasonably delay the distribution of, or prevent the Partnership from distributing, the unpaid amount of the Partners' Preferred Return.
(b) The Reserve Account may be charged with any expenditures for the operation of the Partnership or the purchase, repair, maintenance or construction of items relating to the Project, whether such items are treated as current expense deductions or as capital expenditures under generally accepted accounting practices; provided, however, that no expenditures shall be made from the Reserve Account to the extent that the cost of the purchase, repair or construction is provided by insurance proceeds or proceeds of a loan secured by a security interest in the property repaired or purchased, or a real property mortgage loan or of similar financing or refinancing with respect to the Project. Nothing contained in this Section 9.2 shall in any way limit or restrict, or expand the right of the Managing Partner to use other assets or funds of the Partnership (other than deposits to the Reserve Account) for any such expenditures for the operation of the Partnership or the purchase, repair, maintenance or construction of items relating to the Project.
9.3 . Construction Management Fee . In consideration of the services of Linpro or its affiliate in connection with supervising the construction of the Improvements and as reimbursement for certain overhead expenses in connection with such work, the Partnership shall pay Linpro (or such affiliate) a construction management fee (" Construction Management Fee ") equal to $36,000. The Construction Management Fee shall be payable in advance in twelve equal monthly installments, with the first such monthly installment being due and payable upon the closing of the Construction Loan. The Partners hereby acknowledge and agree that amounts paid by the Partne27ship pursuant to this Section 9.3 constitute and/or are intended to constitute amounts paid to a Partner other than in its capacity as a member of the Partnership as described in Code Section 707(a), and are not intended to be Partnership distributions to a Partner in its capacity as a Partner.
SECTION X Budgets, Plans and Construction Contract
10.1 . Development and construction Contracts, Plans and Budgets. The Partners hereby Approve the C&P Plans described on Exhibit F and the C&P Budget attached hereto as Exhibit G . In addition, the Partners hereby Approve the C&P Lease and the Omni Construction Contract.
10.2 . Procedures for Modification of Budgets and Plans . If any Partner, through its Representatives, makes objections or suggests revisions to the C&P Plans or C&P Budget, the Partners shall use their best, good faith efforts to agree as soon as possible on a revised plan and budget acceptable to both Partners. The Managing Partner shall make any revisions to the C&P Plans and C&P Budget Approved by the Partners. The Managing Partner shall have no authority to undertake or implement the actions described in, or operate the Partnership in accordance with, any proposed revisions to the C&P Plans or C&P Budget until such revised plans and budget have been Approved by the Partners; provided, however, that the Partners may Approve discreet portions of any plan and budget or may Approve a plan and budget in stages and authorize and require the Managing Partner to implement such Approved portion or stage of a plan and budget. The Managing Partner may on its own initiative propose for the Partners' consideration amendments or modifications to the C&P Plans or C&P Budget previously Approved by the Partners as, in the Managing Partner's reasonable discretion, are necessary or desirable due to changed business conditions or other circumstances or considerations.
10.3 . Annual Budget . The Managing Partner shall prepare (or cause to be prepared) an annual operating budget for the Partnership (such annual budget as Approved by the Partners and as amended from time to time with the Approval of the Partners being referred to herein as the " Annual Budget "), which shall include, among other things, budgeted revenues (including contemplated proceeds of capital transactions) and expenses, projected capital improvements, repairs or replacements, reserves, and a pro forma cash flow projection for the Project for such year. The Annual Budget shall be accompanied by notes or other narrative setting forth in reasonable detail any material assumptions made or relied upon in generating such budget. The Annual Budget initially shall be prepared (or caused to be prepared) each year in proposed form by the Managing Partner and delivered to the Partners no later than November 15 of the year preceding the year for which such Budget is to be effective. The partners or their Representatives shall diligently review such proposed budget and meet to review and discuss such budget no later than December 15 of such year. If any Partner, through its Representatives, makes written objections to, or comments on, the proposed Annual Budget on or before such meeting, or at any time thereafter prior to Approval of such budget by the Partners, the Partners shall use their best and good faith efforts to agree as soon as possible on a revised Annual Budget acceptable to both Partners. The Managing Partner shall have no authority to undertake or implement the actions described in, or operate the Partnership in accordance with, any proposed Annual Budget, as revised by the Partners, until such Annual Budget has been Approved by the Partners. The Managing Partner may, however, on its own initiative propose for the Partners, consideration amendments or modifications to any Annual Budget previously approved by the Partners as, in the Managing Partner's reasonable discretion, are necessary or desirable due to changed or uncontemplated business conditions or other circumstances or considerati6ns. If, after following the procedure set forth in this Section 10.3, the Partners are unable to approve the Annual Budget for the ensuing fiscal year by January I of such year, then, pending Approval of the Annual Budget, the Managing Partner shall continue to operate the Partnership in a manner which is as consistent as possible with the previous year's Annual Budget, as most recently revised, with suitable adjustments in revenues and expenses as dictated by inflationary factors or as otherwise dictated by necessary changes in operations. The first Annual Budget shall be prepared for the remainder of the year in which the Rent Commencement Date (as defined in the C&P Lease) occurs, and shall be prepared and Approved on a timetable analogous to that described above as if the Rent Commencement Date were the beginning of the year.
SECTION XI Rent Change Order and Deficit Contributions
11.1 . Rent Change Order Contribution Accounts . (a) Any contribution made by a Partner to the Partnership pursuant to Section 5.2(b) shall be deemed to be a Rent Change Order Contribution for the purpose of this Agreement and shall be added to the Rent Change Order Contribution Account (as defined in Section 11.1(b)] of the Partner making the contribution. Rent Change Order Contributions shall be repaid, with a preferred return, solely by means of those payments pursuant hereto which reduce the balance of the Rent Change Order Contribution Accounts of the Partners, as provided in Section 11.1(b).
(b) The " Rent Change Order Contribution Account " of a Partner shall mean the aggregate Rent Change Order Contributions made by the Partner to the Partnership pursuant to Section 5.2 (b), increased by (i) the amount of accumulated Rent Change Order Preferred Return thereon [computed as provided in Section 11.1(c)], and decreased by (ii) the amounts distributed to the Partner pursuant to Sections 8.1(a), 8.2(a) and 8.3(a) in reduction of the Rent Change Order Contribution Account of the Partner.
(c) The Rent Change Order Preferred Return shall be computed on the unreturned Rent Change Order Contributions at a rate per annum equal to 11.83%, compounded annually.
(d) For the purposes of this Agreement, the distributions specified in Section 11.1(b) which decrease the Rent change Order Contribution Account of a Partner shall be treated first as a distribution of the accumulated Rent Change Order Preferred Return on the Rent Change Order Contributions and next as a return of Rent Change Order Contributions.
11. 2 . Deficit Contribution Accounts . (a) Any contribution made by a Partner to the Partnership pursuant to Section 5.2(e)(i) shall be a Deficit Contribution for all purposes of this Agreement and shall be added to the Deficit Contribution Account (as defined in Section 11.2(b)] of the Partner making' the contribution. Deficit Contributions shall be repaid, with a preferred return, solely by means of those payments pursuant hereto which reduce the balance of the Deficit Contribution Accounts of the Partners, as provided in this Section 11.2.
(b) The " Deficit Contribution Account " of a Partner shall mean the aggregate Deficit Contributions made by the Partner to the Partnership pursuant to Section 5.2 (e) (i) increased by (i) the amount of accumulated preferred return thereon (computed as provided in section 11.2(c)], and decreased by (ii) the amounts distributed to the Partner pursuant to Sections 8.1(d)(ii), 8.2(b) and 8.3(b) in reduction of the Deficit Contribution Account of the Partner.
(c) The preferred return shall be computed on the unreturned Deficit Contributions at a rate per annum equal to the greater of (i) the Base Lending Rate plus 3. 0%, or (ii) 11.83%, compounded annually.
(d) For all purposes of this Agreement, the distributions specified in Section 11.2(b) which decrease the Deficit contribution Account of a Partner shall be treated first as a distribution of the accumulated preferred return on the Deficit Contributions and next as a return of the Deficit Contributions.
SECTION XII Assignment of Interests of Partners
12.1 . General Restrictions . The interest in the Partnership of any Partner may be assigned only as permitted by the provisions of Section XIII or this Section XII. Neither the Partnership nor the Partners shall be bound by any such assignment until a counterpart of the instrument of assignment, executed and acknowledged by the parties thereto, is delivered to the Partnership and the Partners, and such assignment shall be effective as of the date specified therein.
12.2 . Specific Restrictions . Except as provided in Section XIII, this Section 12.2 or Section 12.3, 12.4 or 12.5 hereof, (a) neither Linpro nor any general partner of Linpro shall transfer, sell, assign, pledge, encumber, grant a security interest, give or otherwise dispose of all or any part of its interest in the Partnership or in Linpro, whether voluntarily or by operation of law, or at judicial sale or otherwise, to any person, without the prior written consent of PCI, and (b) PCI shall not transfer, sell, assign, pledge, encumber, grant a security interest, give or otherwise dispose of all or any part of its interest in the Partnership, whether voluntarily or by operation of law, or at judicial sale or otherwise, to any person, without the prior written consent of Linpro. Notwithstanding the provisions of Section 12.5 hereof, Linpro may not sell all or any portion of its interest in the Partnership prior to the "Rent Commencement Date," as such term is defined in the C&P Lease.
12.3 . Permitted Transfers by Linpro and Partners of Linpro . Not with standing anything in Section 12.2 hereof to the contrary, provided the same does not violate or cause the Partnership as landlord under the C&P Lease or as borrower under the Construction Loan to breach any term thereof, Linpro may assign or transfer all (but not less than all, unless such transfer or assignment is a pledge or other transfer to provide security for an obligation of Linpro) of its interest in the Partnership to an Affiliate of Linpro (provided one or more of Eric Eichler, John A. Berry, Jay G. Cranmer, John Chirtea, Mark Corneal, J. Patrick Armstrong or Peter P. Dilullo, the " Current General Partners ,") control all day-to-day and major management decisions of such Affiliate, and directly (or indirectly through wholly owned affiliates) possess (during the construction of the Project) or, together with Persons described in clause (c) below (after completion of such construction), more than 50% of the stock or partnership interests in such Affiliate), and so long as such Current General Partners continue to control all day-to-day and major management decisions of Linpro and such general partners continue to directly (or indirectly through wholly owned affiliates) possess (during the construction of the Project) or, together with persons described in clause (c) below (after completion of such construction) , more than 50% of the partnership interests in Linpro, any partner of Linpro may assign or transfer all or any part of his or its interest in Linpro (a) to an Affiliate of such transferor, (b) to a person who is then a partner of Linpro and who is not Insolvent or Bankrupt within the meaning of Section 14.1, (c) whether voluntarily or involuntarily, on death or inter vivos (in trust or otherwise), to or for the benefit of any member of his immediate family (i.e., spouse, brothers and sisters, parents, children, including those adopted, their direct descendants and the spouses of any of them), or (d) to a person who is then a "partner" in The Linpro Company.
12.4 . Permitted Transfers by PCI . Notwithstanding anything in Section 12.2 hereof to the contrary, PCI may assign or transfer all (but not less than all, unless such transfer or assignment is a pledge or other transfer to provide security for an obligation of PCI) of its interest in the Partnership to an Affiliate of PCI.
12.5 . Additional Permitted Transfers . (a) In the event Linpro or PCI desires at any time to sell, assign or transfer (" Transfer ") all or any part of its interest in the Partnership (the " Interest ") other than as permitted by Sections 12.3 or 12.4 hereof, such Partner (the " Offeror ") may only do so if such Transfer (i) is to a third party who is (A) generally of good reputation, (B) capable of fulfilling the financial obligations of a Partner hereunder, (C) with respect to a transfer by Linpro, experienced in the management of projects similar to the Project, and if such transfer occurs during the construction period, experienced in the development of projects similar to the Project, and (D) with respect to a Transfer by PCI, not actively involved (either directly or through affiliated entities) in the development, management and/or operation of projects similar to the Project on a local or national basis (a " Third Party "), (ii) complies with the terms of this Section 12.5 and (iii) does not cause material adverse tax consequences to a Partner or partner therein (other than those tax consequences associated with transfers to foreign or tax exempt transferees. The Offeror shall first send a written notice (the "Notice") to the other Partner (the " Offeree ") offering to Transfer such Interest to the Offeree. The offering Notice shall set forth the purchase price for such Interest, together with the other terms and conditions of such offer.
(b) The Offeree, by written notice to the Offeror given within thirty (30) days of the receipt of the Notice from the Offeror (the "Response Period"), may elect to purchase the Interest on the terms and conditions set forth in the Notice. Such written notice shall be accompanied by a certified or cashier's check in an amount equal to 5% of the proposed purchase price. Failure of the Offeree to respond within the Response Period shall be deemed consent to the proposed Transfer and the provisions of Section 12.5(d) below shall apply.
(c) If the Offeree shall so elect, the Offeror shall sell and the Offeree shall buy the Interest. The aforesaid sale shall close on the date which is one hundred twenty (120) days following the Offeree's election to purchase the Interest in accordance with this Section 12.5. The closing shall be held at the principal office of the Partnership or at such other place as may be mutually agreed to by the Partners. At the closing, the Offeree shall tender the remainder of the purchase price by certified or cashier's check or, at the Offeror's election, by wire transfer, against delivery by the Offeror of an assignment of the Interest. In the event the Offeree fails to close the purchase of the Interest on the date of closing thereof, the Offeror may, as its sole and exclusive remedy, cause the Offeree to forfeit its deposit as liquidated damages for such failure to close, with such deposit being paid directly to the Offeror notwithstanding the provisions of Section VIII to the contrary. In addition, upon any such default, the terms and provisions of this Section 12.5 shall be of no further force and effect with respect to the defaulting Offeree and the Offeror shall be permitted to transfer the Interest in the Partnership to a third party without the consent of the Offeree.
(d) If the Offeree does not elect to purchase the Interest by sending written notice of such election to the Offeror prior to the expiration of the Response Period, the offeror shall be free for a period of one hundred eighty (180) days after the lapse of the Response Period to Transfer the Interest to a Third Party on substantially the same terms as set forth in the Notice. However, if the Offeror proposes to sell the Interest on terms not substantially the same as those set forth in the Notice, it shall again give the Offeree a Notice under this Section 12.5 and the Offeree shall again have the rights set forth in this Section 12.5.
12.6 . Foreign or Tax Exempt Transferee . Not with standing Section 12.5 hereof, no Partner may assign, transfer or otherwise dispose of all or any part of the its interest in the Partnership to a person who is not a citizen and resident: of the United States or to a tax-exempt entity within the meaning of section 168 (h) (2) of the Code unless such transferee agrees with the remaining Partners to specially allocate depreciation deductions such that the remaining Partners suffer no increase in allocable shares of Partnership taxable income due to the decreased Partnership depreciation deductions that result from the presence of a foreign or tax-exempt partner and executes an amendment to this Agreement in form and substance satisfactory to the remaining Partners to effect this result. In the event that any Partner in the Partnership is not or shall cease to be a citizen and resident of the United States of America, such Partner by execution of this Agreement or any amendment hereto agrees to file such forms or other information as may be necessary in order to eliminate any obligation on the part of the Partnership or any Partner to withhold from amounts distributed to such Partner pursuant to this Agreement, United States Federal income taxes pursuant to section 1441 or any other section of the Code.
12.7 . Substituted Partner . No permitted assignee or transferee of all or part of the interest in the Partnership of a Partner in the Partnership shall have the right to become a substituted partner in the Partnership, unless:
(a) the assignor has granted to the assignee the right to become a substituted partner in the Partnership in the instrument of assignment;
(b) the assignee has executed an instrument reasonably satisfactory to the other Partner accepting and adopting the terms and provisions of this Agreement; and
(c) the assignor or the assignee has paid or reimbursed the Partnership and the other Partner any reasonable legal, accounting and other expenses in connection with the admission of the assignee as a substituted partner in the Partnership.
12.8 . Minimum Ownership by Partners . Notwithstanding anything herein to the contrary, without the prior written consent of the other Partner, no Partner shall have the right to sell, assign or otherwise transfer its interest in the Partnership to any person if after such sale, assignment: or transfer, either the Partner (but only if such Partner continues to hold an interest in the Partnership) or the purchaser, assignee or transferee would hold an interest in the Partnership of less than 1%.
12.9 . Section 754 Election . In the event of a transfer of all or part of the interest of a Partner in the Partnership, by sale or exchange, at th6 request of the transferor, or in the event of a distribution which could give rise to an optional basis adjustment described in Section 754 of the Code, the Partnership shall elect, pursuant to Section 754 of the Code, or the corresponding provision of subsequent law, to adjust the basis of the Partnership property as provided by Sections 734 and 743 of the Code, and any costs of such election or costs of administrating or accounting for such election shall be at the sole cost and expense of the transferor, or the distributee, as the case may be.
12.10 . Allocations Between Transferor and Transferee . In the event of a transfer of all or any part of the interest of a Partner in the Partnership by sale or exchange, unless otherwise agreed between the transferor and the transferee, upon the transfer of such interest, the net profits, net losses, net gains and credits attributable to the interest: so transferred shall be allocated between the transferor and the transferee as of the date set forth in the instrument: of transfer, and such allocation shall be based upon the number of days during the applicable fiscal year of the Partnership that the interest so transferred was held by each of them, without regard to the results of Partnership activities and operations during the period in which each was the holder; provided, however, that the net gains or net losses on the sale of the Project or any portion thereof shall be allocated to the holder of record of the interest on the date of sale; and provided further, that any such transferee or transferor shall not be entitled to cause the Partnership to close its books on an interim basis. Distributions shall be made to the holder of record of the interest on the date of distribution.
SECTION XIII Deadlock; Events of Default
13.1 . Deadlock . As used in this Agreement a "Deadlock" shall have occurred if the Partners have failed, after good faith efforts by the Partners or their Representatives, to Approve or agree to reject, modify or delay the decision whether to Approve, reject, or modify the C&P Plans, the C&P Budget, any Annual Budget or any Major Decision presented to the Partners f or action within sixty (60) business days of the date of the Partners meeting at which the Partners first fail to Approve or agree to reject, modify or delay decision with respect to such matter and the Partners express inconsistent or conflicting opinions or views with respect to such decision. Except as provided below in paragraph (h) of this Section 13.1, in the event of any Deadlock, either Partner (the " Offeror" ) shall have the right to make an offer as described below (the " Buy-Sell Offer ") to the other Partner (the " Offeree ") as set forth below:
(a) The Buy-Sell Offer shall (i) be in writing and be signed by the Offeror; (ii) specify a cash purchase price (" Overall Purchase Price ") for all of the assets of the Partnership, as if free and clear of all loans and other financing; (iii) specify the amount of the overall Purchase Price which is attributable to the Project and other Partnership assets; (iv) specify the other major economic terms and conditions upon which the Offeror would be willing to sell to the Offeree either its interest in the Partnership or all of the Partnership assets (and in each case, under the circumstances described below, those same terms and conditions to apply to the sale by the Offeree to the Offeror of either its interest in the Partnership or all of the Partnership assets) in each case consistent with the terms of the alternative elections set forth below in Section 13.1(b); and (v) disclose the terms and details of any discussion, refinancing or proposed sale that the Offeror has entertained, negotiated or discussed during the last 180 days with any third party for all or any portion of the Project.
(b) The Offeree shall have the right, exercisable by delivery of notice in writing (the " Election ") to the Offeror within 90 days from the receipt of the Buy-Sell Offer to elect to either:
	(i) sell to the offeror all of the Offeee's right, title and interest in and to its Partnership Interest for the amount that the Offeree would receive if all Partnership assets were sold for the overall Purchase Price, all existing loans and other financing were paid in full, and the remaining proceeds were distributed to the Partners and the Partnership liquidated, all as provided in Section 8.3;
	(ii) purchase all of the Offeror's right, title and interest in and to its Partnership Interest for the amount that the Offeror would receive if all Partnership assets were sold for the Overall Purchase Price, all loans and other financing and other Partnership obligations were paid in full, and the remaining proceeds distributed to the Partners and the Partnership liquidated, all as provided in Section 8.3;
	(iii) purchase all of the Partnership assets from the Partnership for a cash purchase price equal to the Overall Purchase Price; or
	(iv) cause the Partnership to sell to Offeror all of the Partnership assets for a cash purchase price equal to the Overall Purchase Price.
(c) In the case of a purchase of all the assets of the Partnership as described in clauses (b) (iii) or (iv), above, the Partner making such purchase may elect, in its sole discretion, to (i) pay all loans and other financing in full from the Overall Purchase Price or (ii) take some or all of the Project subject to such loans and other financings securing such portions of the Project, in which case the overall Purchase Price shall be reduced by the amount of the loans and other financings to which the Project is taken subject to and the other loans and other financings shall be paid from the overall Purchase Price; provided, however, that clause (c) (ii) may not be elected and all loans and other financings must be paid in full from the Overall Purchase Price unless all applicable lenders of such loans and other financings not to be paid consent to the transfer, and agree to release the non-purchasing Partner from all liability with respect to such loans and other financings not being paid and any collateral (including, but not limited to, any note, letters of credit. or guarantees) provided by the non-purchasing Partner is returned or cancelled.
(d) The Offeree shall deliver the Election to the Offeror within 90 days after receipt of the Buy-Sell Offer. Failure of the Offeree to give the Offeror notice of Offeree's Election shall be deemed, upon the expiration of such 90-day period, to be an Election to sell under clause (b) (i), above.
(e) All closings of a purchase hereunder shall take place on the date 60 days after Offeree's Election or deemed Election. If the Project is conveyed under Sections 13.1(b) (iii) or (iv), the Partnership shall convey the Project to the purchasing Partner by a special warranty deed, subject to only those exceptions which existed on the date the Property was acquired by the Partnership and such other restrictions, encumbrances, easements, streets and rights-of-way dedicated or created in connection with the development of the Project or the construction of the Improvements and other exceptions to title as may exist [other than liens securing loans, except for loans and other financings to which the Project is to be taken subject to as provided in Section 13.1(c)] which do not materially and adversely affect the ownership or management: of the Project. Title insurance premiums, escrow fees and all other closing costs (other than ad valorem and other real property taxes which shall be prorated between the Partnership and the purchasing Partner in the usual and customary manner, and other than transfer taxes and recordation fees which shall be allocated one-half to the selling Partner and one-half to the purchasing Partner) in connection with such conveyance shall be paid by the purchasing Partner. In the case of a conveyance under Sections 13.1(b)(i) or (ii), all costs of closing shall be paid one-half by the selling Partner and one-half by the purchasing Partner. Closing costs shall not include, however, attorneys' fees or accounting or other professional fees incurred by either Partner (such cost to be paid by the Partner incurring such costs). The purchase price at any closing shall be paid in immediately available funds.
(f) Either Partner shall be entitled to enforce its rights under this Article XIII by specific performance. I f the offeror defaults under this Article, it shall have no right: to make any future Buy-Sell Offer and shall have no right of first offer provided in Section 12.5 hereof. No Buy-Sell Offer may be made until all periods for making elections and performing obligations under any previous Buy-Sell Offer pursuant to this Article XIII shall have terminated.
(g) Either Partner may freely assign its rights and obligations pursuant to this Article XIII to any other third party, by delivering notice of such assignment to the other Partner, provided the assigning Partner shall remain primarily liable for any and all of its obligations under this Section 13.1, as if such Partner had not assigned its rights pursuant to this paragraph (g).
(h) Notwithstanding the foregoing, no Partner shall have the right or power to utilize or initiate the buy-sell procedure set forth in this Section 13.1 with respect to any Deadlock occurring or continuing prior to the Tenth Anniversary.
13.2 . Events of Default . For all purposes of this Agreement, any of the following constitute an Event of Default:
(a) the making of an assignment by a Partner for the benefit of creditors, any General Partner becoming a party to any liquidation or dissolution action or proceeding, the appointment of a receiver, conservator or liquidator for a Partner or for a significant portion of the Partner's assets and, if any of the foregoing occur involuntarily, the same is not dismissed, stayed or discharged within ninety (90) days (thirty (30) days in the case of an appointment of a receiver, conservator or liquidator);
(b) the filing by a Partner of a petition in bankruptcy, reorganization, arrangement or composition under .any section or chapter of the Federal Bankruptcy Code or any similar law of the United States or any state thereof, or the filing of such a petition against a Partner which is not vacated within ninety (90) days after the date of filing;
(c) the occurrence of any of the events described in clauses (a) and (b) of this Section 13.2 (i) with regard to any parent corporation of PCI; (ii) with regard to more than one of the managing partners of Linpro (as defined in the partnership agreement of Linpro); or (iii) with regard to any general partner of Linpro, if such event has a material adverse effect on the business of the Partnership (including, but not limited to, application of a higher interest rate on Partnership financing or the requirement by any Partnership lender of any additional security or collateral, including letters of credit or guarantees) that would not have occurred but for the occurrence of such event;
(d) legal action by a creditor against a Partner for a non-Partnership obligation, that creates an encumbrance on the Project or any part thereof (such as the recordation of a judgment of a lis pendens) provided that the same is not fully released or discharged, whether by payment thereof or by f1ling a bond causing such judgment, lien or other encumbrance to be removed from the Project within thirty (30) days after its imposition, and provided further that the Partner that is or was the subject of such action by a creditor shall not be in default hereunder if it is diligently and in good faith contesting such matter, by appeal or other means that result in a stay of execution on such encumbrance pending resolution of such contest;
(e) the imposition on any Partner's interest in the Partnership or any distributions of Net Cash Flow or Interim capital Transaction proceeds, voluntarily or involuntarily or by operation of law, of any material lien, charge, encumbrance or adverse claim, provided that the same is not fully released or discharged within 90 days after its imposition, and provided further that the Partner whose Partnership Interest is subject to such material lien, charge, encumbrance or adverse claim shall not be in default hereunder if it is diligently and in good faith contesting such matter and, if in the reasonable judgment of the other Partner, the foreclosure or other sale or transfer of the Partnership Interest subject to the lien, charge, encumbrance or adverse claim is not imminent;
(f) an attempted or purported assignment, transfer, sale, disposition, pledge, grant of a security interest or hypothecation of a Partner's interest in the Partnership without the prior written consent of the other Partner, except as permitted under this Agreement;
(g) removal of the Managing Partner for cause pursuant to Section 6.5(b) hereof (other than clause (A) - (C) thereof);
(h) the occurrence of any event with regard to any Partner which would amount to its gross negligence, fraud, malfeasance or knowing violation of applicable laws which materially and adversely affects the Partnership;
(i) dilution of a Partner's Percentage Interest by more than 50% of its original Percentage Interest pursuant to Section 5.2(e) and any subsequent further dilution occurring after such a 50% reduction; and
(j) any breach by a Partner of any other material duty imposed upon it under this Agreement, including but not limited to the failure by either Partner to fulfill any purchase or sale obligation of such Partner arising pursuant to Sections 13.1 or 13.4 hereof, if such breach has not been cured or the Defaulting Partner has not commenced appropriate action to cure said breach within thirty (30) days following the giving of written notice of such breach by the other Partner or does not thereafter diligently, continuously, and in good faith continue to cure or take action to cure the breach.
The Partner with respect to which any Event of Default described in the foregoing clauses occurs shall be the " Defaulting Partner ," and the other Partner shall be the " Nondefaulting Partner. "
13.3 . Rights Upon Event of Default . Upon the occurrence of any Event of Default And for a period of one year thereafter, provided such event (other than removal of the Managing Partner for cause) is then continuing, the Nondefaulting Partner may, in addition to and not in exclusion of its remedies available under this Agreement, at law or in equity, elect to exercise any one or more of the following remedies:
(a) purchase all (but not less than all) of the Defaulting Partner's Partnership Interest in accordance with Section 13.4 hereof and, if the Nondefaulting Partner has made such election 'to purchase the Defaulting Partner's Partnership Interest in accordance with Section 13.4 below, convert the Defaulting Partner to a limited partner as provided in Section 13.5 hereof; or
(b) dissolve the Partnership without the consent of the Defaulting Partner.
13.4 . Purchase Options.
(a) The Nondefaulting Partner may, but shall not be obligated to, purchase all (but not less than all) of the Partnership Interest of the Defaulting Partner by giving such Partner written notice of its intention to do so at any time for a period of one year after the occurrence of any Event of Default (the " Election Notice ") and otherwise complying with the requirements of paragraphs (b) through (f) hereof.
(b) Within thirty (30) days of the date of receipt by the Defaulting Partner of the Election Notice, the Partners shall meet and attempt to agree on the Fair Market Value (as defined below) of the Partnership's assets. If the Partners agree on the Fair Market Value of the Partnership's assets within such thirty (30) day period (or such longer period as may be mutually agreed to, in writing, by the Partners), then such agreed upon Fair Market Value shall be set forth in writing and promptly delivered to the Partnership's accountants, and shall be the basis for determining the Purchase Price of the Defaulting Partner's interest in the Partnership for purposes of this Section 13.4. Such determination of value shall be final and binding upon the Partners f or all purposes of this Agreement. If the Partners have not agreed on the Fair Market Value of the Partnership's assets within the thirty (30) day period (or such longer period as has been mutually agreed to, in writing), including a failure to agree arising from a refusal or inability of the Defaulting or Nondefaulting Partner to meet with the other Partner to attempt to agree on such Fair Market Value, then the Fair Market Value of all of the Partnership assets shall be determined in accordance with the appraisal procedure set forth in Section 5.9 hereof. The appraisers shall submit copies of their opinion and determination of the Fair Market Value of all of the Partnership's assets simultaneously both to the Defaulting and Nondefaulting Partners and to the Partnership's accountants, and such determination shall be the basis for determining the Purchase Price of the Defaulting Partner's Partnership Interest for purposes of this Section 13.4. The "Fair Market Value" of the assets of the Partnership shall mean the cash price that a sophisticated purchaser would pay for all the assets of the Partnership on the date of the Election Notice. This Section 13.4(b) for determination by appraisal shall be specifically enforceable to the extent such remedy is available under applicable law, and the determination of Fair Market Value hereunder shall be final and binding upon the parties hereto for all purposes of this Agreement.
(c) Determination of Purchase Price . Within fifteen (15) days after the determination of the Fair Market Value of the assets of the Partnership, the Partnership's accountants shall determine the amount of cash which would be distributed to the Defaulting Partner in liquidation of its interest in the Partnership if the assets of the Partnership had been sold for the Fair Market Value as of the date of the Election Notice and the proceeds thereof were applied to the payment of all liabilities of the Partnership as of such date and the establishment of reserves for contingent or unforeseen liabilities and the remaining amount were distributed to the Partners in accordance with Section 8.3 hereof. Such amount is hereinafter referred to as the " Purchase Price " of the Defaulting Partner's interest in the Partnership. Within fifteen (15) days after the determination of the Fair Market Value of the Partnership's assets, the Partnership I s accountants shall give the Partners written notice of the Purchase Price of the Defaulting Partner's interest in the Partnership, along with a summary statement setting forth the calculation thereof (the " Accountant's Notice "). The determination by the Partnership's accountants of such amounts (including the determination of the amount to be set aside as reserves for contingent or unforeseen liabilities) shall be conclusive and binding on both the Defaulting and Nondefaulting Partners, except for obvious and merely mathematical errors of calculation. The Partnership shall pay the fees and expenses of the Partnership's accountants incurred or charged for the services described in this Section 13.4. This provision for the determination of the Purchase Price shall be specifically enforceable to the extent that such remedy is available under applicable law.
(d) Closing of Purchase and Sale . The closing of the purchase and sale of the Defaulting Partner's interest in the Partnership shall be consummated through an appropriate escrow within thirty (30) business days following the date of the Accountant's Notice, as provided in Section 13.4(c) above. At such closing, (1) the Defaulting Partner shall transfer to the Nondefaulting Partner or its designee the entire interest of the Defaulting Partner in the Partnership free and clear of all liens, security interests and claims except liens, security interests and claims of the Nondefaulting Partner, and shall deliver to the Nondefaulting Partner or its designee such instruments of transfer, releases and such evidence of the due authorization, execution and delivery and of the absence of any liens, security interests or competing claims as the Nondefaulting Partner or its designee shall reasonably request, and (2) the Defaulting Partner shall receive the Purchase Price, adjusted for the Costs of Transfer (as defined below), in cash. As used herein "Costs of Transfer" shall mean any prepayment penalties on Partnership financing which become due because of the transfer under this Section 13.4, real estate transfer, sales, and stamp taxes, escrow fees, recording fees, and all other closing costs. Such "Costs of Transfer" shall not, however, include attorneys' fees or accounting or other professional fees of either party. Such Costs of Transfer shall be paid one-half by the Nondefaulting Partner or its designee and one-half by the Defaulting Partner. The escrow agent shall provide both Partners with a closing statement reflecting (on an itemized basis) the Costs of Transfer.
(e) Liabilities . In the event of the purchase of PCI's interest in the Partnership pursuant to this Section 13.4, the PCI Contribution Note shall be cancelled and the original thereof returned to PCI. The purchase of the interest of the Defaulting Partner pursuant to this Section 13.4 shall release the Defaulting Partner (and the Nondefaulting Partner shall indemnify the Defaulting Partner) from all liabilities and claimed liabilities of the Partnership incurred after the date of the Election Notice and from all liabilities and claimed liabilities incurred prior to such date except for (i) liabilities not taken into account (or liabilities the full extent of which were not taken into account) in the determination of Purchase Price, (ii) liabilities or losses arising out of the actions of the Defaulting Partner after the date of the Election Notice, and (iii) tort liabilities not covered by insurance for events occurring prior to the Election Notice. The Partners acknowledge that in determining the Purchase Price of the Defaulting Partner's Partnership Interest pursuant to Section 13.4(c) hereof, an amount was or should have been set aside as reserves for contingent or unforeseen liabilities. In the event that such reserved amount ultimately exceeds the amount of any Partnership contingent or unforeseen liabilities (and legal costs incurred in contesting such liabilities) arising during or incurred with respect to the period ending on the date of the Election Notice, the Nondefaulting Partner or its designee shall make an additional payment to the Defaulting Partner equal to its pro rata share of such excess. Payment of such amount shall be made within thirty (30) days after the date the Partnership actually distributes to its Partners the final amounts reserved for contingent and unforeseen liabilities pursuant to the last sentence of Section 8.3 hereof or, if no such reserves are created upon liquidation of the Partnership, within thirty (30) days after the date of final distribution in liquidation of the Partnership. In the event that the amount reserved in determining the Purchase Price is insufficient to satisfy the contingent or unforeseen liabilities that arose during or were incurred with respect to the period ending on the date of the Election Notice (including legal costs incurred in defending or contesting such liabilities), the Defaulting Partner shall continue to be liable for its pro rata share of such liabilities (and legal costs) and shall pay or reimburse the Nondefaulting Partner or its designee or the Partnership, as appropriate, within thirty (30) days of demand therefore by the Partnership or the Nondefaulting Partner or its designee, as the case may be.
(f) Withdrawal of Defaulting Partner . Upon closing of the purchase of the Defaulting Partner's interest in the Partnership, the Defaulting Partner shall withdraw completely from the Partnership as a Partner. The Nondefaulting Partner or its designee shall succeed to the capital account of the Defaulting Partner as of such date, and the Defaulting Partner shall have no further rights to distributions from the Partnership, and shall not have any other rights of a partner of the Partnership from such date. Both Partners shall execute any and all documents and instruments necessary or incidental to the transfer of the Defaulting Partner's interest in the Partnership, its withdrawal from the Partnership or to effectuate the purpose of this Section 13.4.
13.5 . Conversion of a Partner's Interest . (a) The Partners acknowledge that it is in the best interest of the Partnership and all of the Partners to assure that the Partners are active, solvent and cooperative participants in the Partnership. Accordingly, in the event a Partner becomes Insolvent or Bankrupt or a Nondefaulting Partner elects to purchase the Partnership Interest of a Defaulting Partner pursuant to Sections 13.3 and 13.4 hereof (the " Conversion Event ") then, and in such event, the Partnership shall continue, and (i) the Bankrupt, Insolvent or Defaulting Partner (the " Removed Partner ") or its legal representatives, successors or assigns, shall immediately and concurrently therewith cease to have the authority and power of a general partner in the Partnership, and (ii) the Removed Partner or its legal representatives, successors or assigns shall, upon filing in Maryland of the certificate provided for in Section 13.5(b) hereof, become a limited partner hereof and the Partnership shall be converted to a limited partnership. The Removed Partner's (or its successors') Percentage Interest shall be the same as a limited partner as its Percentage Interest as a General Partner but such Partner shall lose all management and/or approval rights hereunder. Notwithstanding the fact that such Removed Partner shall have been converted to a limited partner, such Removed Partner shall remain liable for its contractual obligations under this Agreement, including its obligations to make additional capital contributions pursuant to Section 5.2 hereof, and shall continue to have personal liability for Partnership obligations incurred prior to the date of conversion of its Partnership Interest to the same extent it would have had such liability as a general partner, but shall cease to have personal liability for Partnership obligations incurred on and after the date of conversion of its Partnership Interest except to the extent it is liable for such obligations as a limited partner under the Maryland Uniform Limited Partnership Act.
(b) Upon the occurrence of the Conversion Event, the other Partner (the " Remaining Partner ") shall be and is hereby irrevocably constituted and appointed as the true and lawful attorney-in-fact for the Removed Partner to make, execute, consent to, swear to, acknowledge, deliver, record and file, in the name, place and stead of each Removed Partner, its legal representatives, successors or assigns, a certificate of limited partnership under the laws of the State of Maryland, and- under the applicable laws of any other jurisdiction in which the Remaining Partner deems such filing to be necessary or desirable, to reflect the following facts: (i) the Removed Partner is no longer a general partner; (ii) its former general partnership interest has been converted into a limited partnership interest in a like percentage, and (iii) such additional matters relating to the transaction or the identity of the successor limited partners as may be deemed appropriate or necessary by the Remaining Partner. The Partnership shall bear the expense of preparation and filing of the amended partnership agreement and the certificate of limited partnership. Additionally, the Removed Partner, its legal representatives, successors or assigns shall execute and deliver to the Partnership such additional documents as may be reasonably requested for the purposes of further documenting or reflecting the conversion of such general partnership interest into such limited partnership interest, provided, however, that no failure or refusal on the part of the Removed Partner or its successor in interest to comply with this provision shall be construed as a condition to the effectiveness of such conversion. If the Removed Partner is the Managing Partner, the provisions of Section 6.5(b) (ii) shall apply.
SECTION XIV Dissolution and Termination
14.1. Time for Dissolution . The Partnership shall be dissolved and, except as provided in Section 14.2, its business wound up, upon the earliest to occur of:
(a) December 31, 2039;
(b) Linpro, with the consent of PCI, determining that the Partnership should be dissolved;
(c) An election by the Nondefaulting Partner pursuant to Section 13.3(b) hereof to dissolve the Partnership;
(d) the Partnership becoming Insolvent or Bankrupt;
(e) the last of Linpro or PCI becoming Insolvent or Bankrupt; or
(f) the sale of all or substantially all of the Partnership's assets.
For the purposes of this Agreement, a Person shall be deemed to be " Bankrupt " when such Person files a petition in bankruptcy, or voluntarily takes advantage of any bankruptcy or insolvency law, or is adjudicated a bankrupt, or when a petition or answer is filed proposing the adjudication of such Person as a bankrupt and such Person either consents to the filing thereof or such petition or answer is not discharged or denied prior to the expiration of 90 days from the date of such filing. A Person shall be deemed to be " Insolvent " when such Person shall state by written notice to the Partners or any creditor that his or its assets are insufficient to pay his or its liabilities as they arise or when a receiver or trustee is appointed for such Person (whether voluntarily or involuntarily) and, in the case of an involuntary appointment, is not discharged prior to the expiration of ninety (90) days from the date of such appointment. The Bankrupt or Insolvent Partner shall send written notice of the occurrence of any filing of a petition in bankruptcy, the appointment of a receiver or trustee or any other matter which renders, or with the passage of 90 days may render, it Bankrupt or Insolvent to the other Partner within fifteen days of any such event.
14.2 . No Release of Liability . It is understood and agreed that no dissolution of the Partnership or Conversion Event shall release or relieve any of the parties hereto of their contractual obligations under this Agreement.
14.3. Disposition of Assets Upon Dissolution . Upon any dissolution of the Partnership, subject to the provisions of Section 13.5 hereof, all assets shall be sold and the proceeds distributed, or the assets distributed in kind if the Partners so elect, to the Partners in the manner and the priority provided for in Section 8.3.
SECTION XV Accounting
15.1 . Fiscal Year . The fiscal year of the Partnership shall be the calendar year.
15.2. Books and Records . The Managing Partner shall keep, or cause to be kept, full and accurate records of all transactions of the Partnership in accordance with principles and practices generally accepted for the cash method of accounting, unless otherwise required by the Code.
15.3. Location of Books of Account; Inspection . All of the books of account of the Partnership shall, at all times, be maintained in the principal office of the Partnership, and shall be open during reasonable business hours for the reasonable inspection and examination by any Partner or its authorized representatives, who shall have the right to make copies thereof.
15.4 . Tax Returns . The Managing Partner shall cause to be prepared, by Deloitte Haskins & Sells, Arthur Andersen & Co. or such other public accounting firm Approved by the Partners, all tax returns and statements, if any, which must be filed on behalf of the Partnership with any taxing authority, and shall submit such returns and statements to the Partners no later than March 1 of each year, and when Approved by the Partners, make timely filing thereof. Within sixty (60) days after the end of each fiscal year of the Partnership, the Managing Partner shall cause to be delivered to each Partner an unaudited statement setting forth in reasonable detail pertinent information concerning such Partner's distributive share of Partnership income or loss for such year, the distributions of cash made for such fiscal year and such other information as may be reasonably necessary to enable such Partner to prepare and timely file its own tax returns.
15.5 . Tax Matters Partner. Linpro is designated as "Tax Matters Partner" as referred to in Section 6231(a)(7)(A) of the Code.
SECTION XVI Reports and Statements
16.1. Annual Partnership Financial Statements . Within 120 days after the end of each fiscal year of the Partnership, the Managing Partner shall cause to be delivered to the Partners financial statements certified by the Managing Partner (and certified by an independent certified public accountant if such certification is requested in writing by either Partner, in which case such certification shall be at the expense of such Partner, and the Managing Partner may withhold and pay from cash otherwise distributable to such Partner pursuant to the provisions of Section VIII an amount sufficient to pay for such certification), prepared at the Partnership's expense, which statements shall set forth as of the end of and for such fiscal year, the following:
(a) a profit and loss statement and a balance sheet of the Partnership accompanied by appropriate notes or other detail, statements or schedules;
(b) the balances in the capital accounts of each Partner; and
(c) such other information, as in the judgment of the Managing Partner, shall be reasonably necessary for the Partners to be advised of the results of operations of the Partnership.
16.2 . Partner Financial Statements . Within one hundred twenty (120) days following the end of each Partner's fiscal year, PCI and each "managing partner" of Linpro (as. defined in the partnership agreement of Linpro) shall provide year end financial statements for such Partner, certified to by the Chief Financial Officer of such Partner or the corporate parent of such Partner.
16.3 . Semi-Annual Reports . Within ninety (90) days after the end of each semi-annual period of the Partnership, the Managing Partner shall cause to be delivered to the Partners a report of the state of the business and affairs of the Partnership for such semi-annual period which report shall set forth, as of the end of such semi-annual period, the following:
(a) a cash flow statement of the Partnership reflecting the Partnership's revenues and expenses;
(b) a statement comparing current revenues, profit, loss and operating expenses to any appropriate Budget;
(c) a balance sheet showing assets and liabilities;
(d) a narrative report on the status of construction and any other factors of significance to the Partners; and
(e) such other information as in the judgment of the Managing Partner shall be reasonably necessary for the Partners to be advised of the financial status and results of operations of the Partnership.
SECTION XVII Bank Accounts
The Managing Partner may open and maintain one or more bank accounts at a bank or banks located in the Washington, D.C. metropolitan area in the name of the Partnership in which shall be deposited all funds of the Partnership. Withdrawals from such account or accounts shall be made only in accordance with this Agreement upon the signature or signatures of such person or persons as the Managing Partner shall designate. The Partners acknowledge and agree that funds of the Partnership may be withdrawn from one or more of its accounts and deposited in a central account in the name of an entity affiliated with the Managing Partner, so long as such funds do not exceed the amount of costs and expenses previously Approved by the Partners as costs and expenses which will be deposited in such affiliated account (which costs and expenses shall not include payments to the Partnership's general contractor or any Partnership lender, which amounts shall be paid directly out of Partnership accounts) and so long as separate entries are made on the books and records of the Partnership and on the books and records of such other affiliated entity reflecting that deposits in the bank account of such entity with respect to amounts received from the Partnership have been deposited therein for the account of the Partnership and that withdrawals from such bank account have been made for the purpose of disbursing funds to the Partnership or for the purpose of paying costs, expenses or liabilities of the Partnership.
SECTION XVIII Notices
Whenever any notice is required or permitted to be given under any provision of this Agreement, such notice shall be in writing, signed by or on behalf of the person giving the notice, and shall be deemed to have been given when delivered by personal delivery or on the third (3rd) business day after it is mailed by certified mail, postage prepaid, return receipt requested, addressed to the person or persons to whom such notice is to be given as follows (or at such other address as shall be stated in a notice similarly given):
	(a)	If to Linpro, such notice shall be given at:
		The Linpro Company 1717 Elton Road, Suite.211 Silver Spring, MD 20903 Attention: Mr. John Chirtea
	with a copy to
		Jones, Day, Reavis & Pogue Metropolitan Square 1450 G Street, N.W. Washington, D.C. 20005-2088 Attention: Sigmund T. Weiner, Esq.
	(b)	If to PCI, such notice shall be given at
		Potomac Capital Investment Corporation Suite 600 900 19th Street, N.W. Washington, D.C. 20006 Attention: Mr. Frank J. Spingler
	with a copy to
		Hazel & Thomas, P.C. Suite 400 2001 Pennsylvania Avenue, N.W. Washington, D.C. 20006 Attention: Stanley A. Levine, Esq.
provided, however, all Partners shall at all times provide an address within the continental United States.
SECTION XIX Defined Terms
19.1 . Defined Terms . As used in this Agreement, the following terms have the following respective meanings, unless the context clearly requires otherwise:
" Accountant's Notice". As defined in Section 13.4(b) of this Agreement.
" Adjusted Capital Account Deficit ": With respect to any Partner, the deficit balance, if any, in such Partner's capital account as of the end of the relevant fiscal year, after giving effect to the following adjustments:
	(i) Credit to such capital account any amounts which such Partner is obligated to restore or is deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulation Sections 1.704-lT(b) (4)(iv)(f) and (h)(5) or any successor provisions thereto; and
	(ii) Debit to such capital account the items described in Treasury Regulation Sections 1.704-l(b)(2)(ii)(d) (4), (d)(5) and (d)(6), or any successor provisions thereto.
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii) (d) or any successor provision thereto and shall be interpreted consistently therewith.
" Affiliate ": With regard to any Person, (a) any partner or shareholder in such Person or any partner in any partner in such Person; (b) any member of the immediate family of (i) any such Person, (ii) any partner in such Person, (iii) any partner in any partner in such Person or (iv) any Person described below in clause (c) of this definition; (c) any Person which controls, is controlled by or is under common control with (i) such Person, (ii) any partner or shareholder in such Person or (iii) any partner in any partner in such Person, or any Person that is controlled by the same Persons that shall then control such Person or any partner in such Person or any partner in any partner in such Person. As used herein, the term "immediate family" shall mean the spouse, ancestors, lineal descendants, brothers, sisters, nieces, nephews, aunts, uncles, spouses of any of them, and trusts established for the benefit of any of them. As used herein, the term "control", "controlled by" and "under common control with" shall include the ownership of ten percent (10%) or more of the beneficial interest in the person referred to.
" Agreement ": This Partnership Agreement as amended from time to time, together with the exhibits attached hereto.
" Annual Budget ": As defined in Section 10.3 of this Agreement.
" Approved by the Partners ", " Approval of the Partners " or " Approved " or " Approval ": The unanimous approval of the Partners in accordance with Section 6.4 of this Agreement, as evidenced by the written consent of one Representative of each Partner or by written minutes of a meeting of the Partners approved or deemed approved in accordance with Section 6.4 hereof. The Partners acknowledge and agree that they have approved as of the date of this Agreement the C&P Lease, the Omni Construction Contract, the Projected Project Costs and Rate Factor and the C&P Plans.
" Base Lending Rate ": The rate of interest identified as the "Prime Rate" in the money rates column published each day in The Wall Street Journal and defined therein as the base rate on corporate loans at large U.S. money center commercial banks. If The Wall Street Journal should cease publishing such rate, then the "Prime Rate" shall mean and refer to the rate of interest -announced from time to time by The Riggs National Bank of Washington, D.C., or its successor, as its "prime interest rate", "base lending rate", "index rate" or other reference rate, as the case may be, for commercial lending transactions (or the first of those listed above if more than one is announced). Any change in the interest rate resulting from a change in the Prime Rate shall be effective without notice to any party on the date of such change.
" Book Basis ": With respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:
(a) The initial Book Basis of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset;
(b) The Book Basis of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the Partners, or if the Partners are unable to agree, in accordance with the appraisal procedures set forth in Section 5.10, as of the following times: (a) the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis capital .contribution or the distribution by the Partnership to a Partner of more than a de minimis amount of cash or Partnership property as consideration for an interest in the Partnership; and (b) the liquidation of the Partnership within the meaning of Treasury regulation Section 1.704-l(b)(2)(ii)(g).
(c) The Book Basis of any Partnership asset distributed to any Partner shall be the gross fair market value of such asset on the date of distribution, as determined by the Partners, or if the Partners are unable to agree, in accordance with the appraisal procedures set forth in Section 5.10; and
(d) The Book Basis of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Section 743(b), but only to the extent that such adjustments are taken into account in determining capital accounts pursuant to Treasury regulation Section 1.704-1(b)(2)(iv)(m); provided, however, that Book Basis shall not be adjusted pursuant to this subparagraph (d) to the extent that the Managing Partner determines that an adjustment pursuant to subparagraph (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d). If the Book Basis of any asset has been determined or adjusted pursuant to subparagraphs (a), (b) or (d) hereof, such Book Basis shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.
" Budget ": One or both of the Annual Budget and/or the C&P Budget.
" Building ": As defined in Section III of this Agreement.
" C&P ": As defined in Section III of this Agreement.
" C&P Budget ": That certain budget attached hereto as Exhibit " G ", as amended from time to as provided in this Agreement.
" C&P Lease ": As defined in Section III of this Agreement.
" C&P Plans ": As defined in Section III of this Agreement.
" Code ": The Internal Revenue Code of 1986, as amended.
" Construction Deficit ": As defined in Section 5.1(b) of this Agreement.
" Construction Lender ": Signet Bank/Maryland, a Maryland banking corporation.
" Construction Loan ": That certain $10,600,000 construction and interim financing loan from Signet Bank/Maryland pursuant to that certain loan commitment letter dated November 21, 1990 (" Commitment ").
" Construction Management Fee ": As defined in Section 9.3 of this Agreement.
" Costs of Transfer ": As defined in Section 13.4(d) of this Agreement.
" Date of Default ": As defined in Section 5.2(e) of this Agreement.
" Deadlock ": As defined in Section 13.1 of this Agreement.
" Defaulting Partner ": The Partner described as a defaulting Partner pursuant to Sections 5.2(e) or 13.2 hereof, as the case may be.
" Deficit ": As defined in Section 5.2(c) of this Agreement.
" Deficit Contribution(s) ": The capital contributions made pursuant to Section 5.2(e)(i) hereof.
" Deficit Contribution Account ": As defined in Section 11.2 of this Agreement.
" Deficit Contribution Preferred Return ": The preferred return described in Section 11.2(c) of this Agreement.
" Depreciation ": With respect to any Partnership asset for each fiscal year or other period of the Partnership, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to such asset for such year or other period, except that, if the Book Basis of such asset at the beginning of such year or other period differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation for such' year or other period shall be an amount that bears the same ratio to such beginning Book Basis as the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period is zero, Depreciation for such year or other period shall be determined with reference to such beginning Book Basis using any reasonable method selected by the Partners.
" Development ": The Property as improved by the Site Improvements alone.
" Election Notice ": As defined in Section 13.4(a) of this Agreement.
" Event of Default ": As defined in Section 13.2 of this Agreement.
" Fair Market Value ": As defined in Section 13.4(b) of this Agreement.
" Improvements ": The Site Improvements together with the Buildings.
" Indemnitee ": Any Partner, any partner of a Partner, and any officer, director, shareholder or employee of any Partner or partner of a Partner.
" Interim Capital Transaction ": A sale, financing, refinancing or other transaction which, according to generally accepted accounting practices, is attributable to capital but which does not result in the dissolution and winding up of the Partnership.
" Key Persons ": As to each Partner, those persons designated under the name of such Partner on Exhibit "B". Each Partner may make any changes, additions and deletions to its list of Key Persons, provided that any new or replacement person appointed by a Partner as a Key Person is approved by the other Partner in its reasonable discretion.
" Linpro ": Linpro Harmans Land Limited Partnership, a Delaware limited partnership, its successors or permitted assigns.
" Major Decisions ": As defined in Section 6.3 of this Agreement.
" Managing Partner ": Linpro, or its successors or permitted assigns, or any other Partner who becomes a Managing Partner pursuant to the provisions of Section 6.5 of this Agreement.
" Net Cash Flow ": For any period for which such amount is being computed, (a) Operating Revenues of the Partnership during such period, minus (b) the Operating Expenses of the Partnership during such period.
" Nondefaulting Partner ": The Partner described as a nondefaulting Partner in Sections 5.2(d) or 13.2 hereof, as the case may be.
" Nonrecourse Deductions ": As defined in Treasury Regulation Section 1.704-lT(b)(4)(iv)(a).
" Omni Construction Contract ": That certain Construction Contract-Cost Plus Fee with Guaranteed Maximum by and between Harmons Building Associates and Omni Construction Inc.
" Operating Expenses ": For any period for which such Operating Expenses are being determined, the sum of the total gross expenditures of the Partnership for operations during such period, including (a) all cash operating expenses (including all management fees and other fees, expenses and allowances paid to any Partner, but not including the Project Development Distribution), (b) all debt service payments of the Partnership (other than out of the proceeds of any Sale or loan and excluding payments of the Deficit and Rent Change Order Contribution Accounts), (c) all expenditures by the Partnership which are treated as capital expenditures (as distinguished from expense deductions) under generally accepted accounting practices, (d) real estate taxes, personal property taxes and sales taxes and (e) deposits to the Reserve Account; provided, however, that Operating Expenses shall not include any payments or expenditures to the extent the sources or funds used for such payment or expenditure are not included in Operating Revenues.
" Operating Revenues ": For any period for which such Operating Revenues are being determined, the sum of the total gross revenues of the Partnership from operations received by the Partnership during such period, including all receipts of the Partnership from (a) rent, additional-rent and percentage rent paid to the Partnership (including for parking facilities), (b) concessions, (c) rent or business interruption insurance, if any, (d) funds deposited into the Partnership operating account to the extent such funds are withdrawn from the Reserve Account as a result of reductions in such reserves, (e) reimbursements of expenses paid by the Partnership which are to be borne by others, (f) deposits in the event of a forfeiture thereof to the Partnership, and (g) other revenues and receipts realized by the Partnership from operations and customarily included in net cash flow; but shall not include advanced rentals paid (until such time as they are earned by the Partnership), insurance loss proceeds (except for any proceeds from business or rental interruption insurance), proceeds or funds from Interim Capital Transactions and the sale or other disposition of Partnership assets following the dissolution of the Partnership.
" PCI ": Potomac Capital Investment Corporation, a Delaware corporation, or its permitted successors and assigns.
" PCI Additional Capital Contributions ": As defined in Section 5.1(b) of this Agreement.
" Partially Adjusted Capital Account ": With respect to any Partner for any fiscal year of the Partnership, the Capital Account of that Partner at the beginning of that fiscal year, adjusted for all contributions and distributions during such fiscal year and all special allocations pursuant to Section 7.3 with respect to that fiscal year and by assuming that amounts distributable with respect to that fiscal year pursuant to this Agreement (other than incident to liquidation) are distributed in that fiscal year (and that such amounts are not taken into account again when they are actually distributed), but before giving effect to any allocations of Profits or Losses pursuant to Section 7.1.
" Partner Minimum Gain ": The minimum gain attributable to Partner Nonrecourse Debt, as defined in Treasury Regulation Section 1.704-lT(b) (4) (iv) (h).
" Partner Nonrecourse Debt ": As determined in accordance with Treasury Regulation Section 1.704-lT(b) (4) (iv) (h) or any successor provision thereto.
" Partner Nonrecourse Deductions ": As defined Treasury Regulation Section 1.704-1T(b) (4) (iv) (h).
" Partners ": Linpro and PCI, or their successors and permitted assigns.
" Partnership ": The general partnership formed pursuant to this Agreement.
" Partnership Act ": As defined in Section 1.1 of this Agreement.
" Partnership Interest ": For each Partner separately, all of that Partner's rights in connection with the Partnership, including, but not limited to such Partner's Percentage Interest in the Partnership, rights in specific Partnership property, if any (including, but not limited to, contract rights), rights to participate in the management of the Partnership, rights to distributions, reimbursements or other payments, rights to Profits, Losses and other allocations and all other rights of such Partner under this Agreement and the Partnership Act.
" Partnership Minimum Gain ": The gain that would be recognized by the Partnership for federal income tax purposes if property of the Partnership which is security for nonrecourse debt of the Partnership were foreclosed upon and such property were transferred to the creditor in satisfaction of such debt, as determined under Treasury Regulation Section 1.704-1T(b)(4)(iv)(c) or any successor provision thereto.
" Percentage Interest ": Except as adjusted pursuant to Section 5.2(e) hereof, fifty percent (50%) in the case of PCI and fifty percent (50%) in the case of Linpro.
" Person ": Any individual, partnership, limited partnership, foreign limited partnership, joint venture, trust, estate, corporation, joint stock company, association, custodian, trustee, executor, administrator, nominee or other entity, in its own or a representative capacity.
" Preferred Return ": As to each Partner separately and as of any date, an amount equal to a nine and one-half percent (9.50%) cumulative preferred return per annum (but compounded monthly) on the Unrecovered Capital Account of such Partner.
" Profits " or " Losses ": For each fiscal year or other period, an amount equal to the Partnership's taxable income or loss for such year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a) (1) of the Code shall be included in taxable income or loss), with the following adjustments:
(a) any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;
(b) any expenditures of the Partnership described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury regulation Section 1.704-l(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted from such taxable income or loss;
(c) in the event the Book Basis of any Partnership asset is adjusted pursuant to subparagraphs (b) or (c) of the definition of Book Basis, the amount of such-adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses and allocated in accordance with Section VII hereof;
(d) gain or loss resulting from any disposition of Partnership assets with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Basis of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Book Basis;
(e) in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year or other period, computed in accordance with the definition of Depreciation contained herein; and
(f) any items of income, gain, deduction and loss allocated pursuant to Section 7.3 shall not be taken into account in determining Profit and Loss.
" Project ": The Property as improved by both Site Improvements and Buildings.
" Project Development Distribution ": An amount equal to. $311,000.00.
" Property ": As defined in Section III of this Agreement.
" Purchase Price ": As defined in Section 13.4(c) of this Agreement.
" Related Entity ": Any other Person in which the Partnership owns an interest.
" Removed Partner ": As defined in Section 13.5 of this Agreement.
" Rent Change Orders ": As defined in the C&P Lease.
" Rent Change Order Contributions ": As defined in Section 5.2(b) hereof.
" Rent Change Order Contribution Account ": As defined in Section 11.l(b) hereof.
" Rent Change Order. Preferred Return ": As defined in Section 11.l(c) hereof.
" Representatives ": As defined in Section 6.4(c) hereof.
" Reserve Account ": As defined in Section 9.2.
" Sale ": The sale or condemnation of all or any portion of the Property or the Project.
" Section 704(b) Regulations ": The final income tax regulations under Section 704(b) of the Code relating to the determination of a Partner's distributive share of partnership income, gain; loss, deduction or credit (or item thereof), and any outstanding proposed income tax regulations under section 704(b) of the Code.
" Site Improvements ": As defined in Section III of this Agreement.
" Target Account ": With respect to any Partner for any fiscal year of the Partnership, a balance (which may be either positive or negative) equal to (i) the hypothetical distribution that Partner would receive if all Partnership assets (including cash) were sold for cash equal to their Book Basis (taking into account any adjustments to Book Basis for that fiscal year), all Partnership liabilities were satisfied to the extent required by their terms (limited, with respect to each Partnership nonrecourse liability, to the Book Basis of the assets securing such liability) and all net assets of the Partnership (including the proceeds from the disposition) were distributed in full pursuant to Section 8.3 hereof, all as of the last day of the fiscal year, reduced by (ii) that Partner's share of Partnership Minimum Gain and Partner Minimum Gain as determined pursuant to Treasury Regulation Section 1.704-1T(b)(4)(iv) immediately prior to the hypothetical sale.
" Tenth Anniversary ": The tenth anniversary of the "Rent Commencement Date", as such term is defined in the C&P Lease.
" Unrecovered Capital Account ": As to each Partner separately and as of any given time, an amount equal to the excess, if any, of (a) the aggregate amount of the capital contributions made by such Partner to the Partnership pursuant to Article V hereof (other than Rent Change Order Contributions and Deficit Contributions) over (b) the sum of all amounts theretofore distributed to such Partner pursuant to Sections 8.2(d), 8.3(d) and 8.5 hereof.
" Windfall Net Cash Flow ": For any fiscal year or shorter accounting period, beginning on the "Rent Commencement Date" (as such term is defined in the C&P Lease), the amount of (A) the excess (if any) of (i) the actual Net Cash Flow of the Partnership for such period, over (ii) the amount of Net Cash Flow that would exist for such period if instead of making the actual debt service payments on the construction or permanent loan for the Project for such period the Partnership were making debt service payments during or for such period on a self-amortizing, 20-year term loan of $9,000,000 at the actual interest rate that applies to the permanent loan to the Partnership from Mass Mutual Life Insurance Company of Springfield, Massachusetts, if the Partnership has in fact obtained such a loan, or if the Partnership has not obtained such a loan, at the rate that the Partners agree would have applied under such a loan based on the terms of the letter agreement of November 30, 1990 engaging Latimer & Buck to obtain a 20-year, self-amortizing loan of $9,000,000 from Mass Mutual, but all other Partnership Operating Expenses were unchanged, less (B) the amount of the Rent Change Order Preferred Returns of the Partners for such period.
19.2 . Accounting Terms . Except as otherwise specifically provided herein, all terms herein which relate to accounting matters shall be interpreted in accordance with generally accepted accounting practices.
19.3 . Additional Terms . Capitalized terms used in this Agreement and not defined in Section 19.1 hereof shall (unless otherwise expressly provided herein) have the meanings assigned to them in other portions of this Agreement.
SECTION XX Miscellaneous
20.1 . Binding Effect . Except as herein otherwise provided to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns.
20.2 . Amendments . No amendment, modification or waiver of this Agreement, or any part hereof, shall be valid or effective unless in writing and signed by Linpro and PCI.
20.3 . Applicable Laws . This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland.
20.4 . Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument which may be sufficiently evidenced by one counterpart.
20.5 . Waiver . No consent or waiver, either expressed or implied, by any Partner to or of any breach or default by any other Partner, in the performance by such other Partner of the obligations thereof under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Partner of the same or any other obligations of. such other Partner under this Agreement. Failure on the part of any Partner to complain or to pursue complaints with respect to any acts or failure to act of any other Partner, or failure on the part of any Partner to declare any other Partner in default, irrespective of how long such default continues, shall not constitute a waiver by such Partner of the rights and remedies thereof under this Agreement or otherwise at law or in equity.
20.6 . Additional Acts . In connection with this Agreement, as well as all transactions contemplated by this Agreement, each Partner agrees to execute and deliver such additional documents, instruments and take all such necessary action and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.
20.7 . Construction . The headings and titles of the Sections, Sub-sections and Paragraphs herein have been inserted as a matter of convenience of reference only and shall not control or affect the meaning or construction of any of the terms or provisions herein.
20.8 . Gender . Whenever the context shall so require, all words herein in any gender shall be deemed to include the masculine, feminine, or neuter gender, and all singular words shall include the plural, and all plural words shall include the singular.
20.9 . Legal Construction . In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. Furthermore, in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
20.10 . Prior Agreement Superseded . This Agreement supersedes any prior understanding or written or oral agreements between the parties respecting the within subject matter and contains the entire understanding between the parties with respect thereto.
20.11 . This Agreement . The words "herein," "hereof," "hereunder," "hereby," "this Agreement" and other similar reference shall be construed to mean and include this Agreement and all amendments thereof and supplements thereto unless the context should clearly indicate or require otherwise.
20.12 . Non-Exclusive Remedies . Except as otherwise provided herein, no remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to every such remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. It is expressly agreed that the remedy at law for breach by any of the parties for its obligations hereunder is inadequate in view of the complexities and uncertainties in measuring the actual damages which would be sustained by reason of either party's failure to comply fully with each of such obligations. Accordingly, the obligations of each party hereunder are expressly made enforceable by specific performance.
20.13 . No Third Party Beneficiary Rights . This Agreement is made solely and specifically between and for the benefit of the parties hereto, and their respective successors and assigns, subject to the express provisions hereof relating to successors and assigns, and no other person, individual, corporation or entity, whatsoever, shall have any rights, interests or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.
20.14 . Exhibits . All exhibits, attachments, annexed instruments and addenda referred to herein shall be considered a part of this Agreement as fully as if and with the same force and effect as if such exhibit, attachment, annex or addendum had been included herein in full.
20.15 . General Representations . Each of the Partners represents and warrants to the other Partner that (a) the execution, delivery and performance of this Agreement and its ancillary documents attached hereto as Exhibits (" Ancillary Documents ") have been duly and validly authorized by all necessary action, corporate or otherwise, on the part of it, (b) the execution, delivery and performance of this Agreement and Ancillary Documents will not result in a breach or violation of or a default under its articles of incorporation or partnership agreement, or under any loan or other agreement or instrument by which it or any of its properties is bound or under any statute, rule, regulation, order or other law to which it or any of its properties is subject, (c) this Agreement and those Ancillary Documents to which it is a party are legal, valid and binding obligations of it, enforceable against it in accordance with their terms and conditions, (d) it is a legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of formation and has all necessary power and authority to own its property and carry on its business as presently conducted (including in the manner contemplated by this Agreement and Ancillary Documents) and is duly qualified to do business and is in good standing in all jurisdictions which the ownership or use of its property or its activities presently make such qualification necessary, except for such jurisdictions in which the failure to be so qualified or in good standing would not materially impair its obligations pursuant to this Agreement, (e) all authorizations, approvals and consents, if' any, required to be obtained from, and all registrations, declarations and filings, if any, required to be made with, all governmental authorities and regulatory bodies and all other persons or entities to permit it to execute and deliver, and to perform its obligations, under this Agreement and Ancillary Documents have been obtained or made and all such authorizations, approvals, consents, registrations, declarations and filings are in full force and effect, and all terms and conditions contained in or existing in respect of, such authorizations, approvals, consents, registrations, declarations and filings have, to the extent necessary prior to the date of execution and delivery hereof and thereof, been duly satisfied and performed, (f) neither it nor any of its partners or shareholders in the hands of a receiver or has committed an act of bankruptcy, and (g) there are no judgments, orders, or decrees of any kind against it unpaid or unsatisfied of record nor any legal action, suit or other legal or administrative proceeding pending before any court or administrative agency which would have a material adverse effect on its financial condition.
20.16 . Language . The language used in this Agreement shall be deemed to be the language chosen by the Partners to express their mutual intent, and no rule of strict construction shall be applied against any Partner.
20.17 . Confidentiality . Each Partner shall keep confidential and not use or disclose to others and shall use its best efforts to prevent any of its employees, former employees, agents and representatives from using or disclosing, without the prior written consent of the other Partners, any information or data which both (i) pertains to this Agreement, any negotiations pertaining thereto, any of the transactions contemplated hereby or the business of the Partnership and (ii) the other Partner hereto has labeled in writing as confidential or proprietary; provided , however , that nothing in this Section 20.17 shall apply to any information or data (a) which the Partner in question can show is known to the public or which hereafter becomes known to the public other than by its acts or omissions; or (b) the disclosure of which is required by, securities, accounting or other - applicable laws or regulations; or (c) which it could show was already in its possession prior to receipt from the other Partner. Nothing in this Section 20.17 shall expand or contract the rights or obligations of either Partner with respect to any information previously provided to such Partner pursuant to any other confidentiality agreement. The provisions of this Section 20.17 shall survive the termination of this Agreement and the liquidation of the Partnership.
20.18 . Limitation of Liability . Notwithstanding anything in this Agreement to the contrary, in no event shall the Partnership or PCI have recourse against (i) the principal personal residences of any partner of Linpro or (ii) any other assets of Linpro or any partner of Linpro (an " Obligor ") except those business assets of such Obligor at the time of enforcement of such Obligor's obligations under this Agreement then comprising or relating to the group of entities and properties commonly known as or operating under "The Linpro Company" name. The assets referred to in clause (ii) of the preceding sentence, which are intended to be subject to execution upon any judgment obtained by PCI in enforcement of such Obligor's obligations, shall include receivables from, and ownership interests or other investments in, partnerships, corporations or other entities known as or operating under "The Linpro Company" name.
IN WITNESS WHEREOF, the parties hereto have executed this Partnership Agreement as of the day and year first above written.
				LINPRO: LINPRO HARMANS LAND LIMITED PARTNERSHIP, a Delaware limited partnership By: Linpro Harmans Land Associates Limited Partnership By: _____________________________ __________________________ (Name) ___________________________ (Title) By: /s/ JOHN CHIRTEA John Chirtea (Name) General Manager (Title)
THE DISTRICT OF COLUMBIA
BEFORE ME, the undersigned authority, on this day personally appeared _______________ and John Chirtea, general partners of LINPRO HARMANS LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership and a general partner of LINPRO HARMANS LAND LIMITED PARTNERSHIP, a Delaware limited partnership, known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledged to me that they executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 30 ^th day of December, 1990.
My commission expires: My Comm. Expires, Jan. 14, 1992				/s/ Notary Public- in and for County the District of Columbia
IN WITNESS WHEREOF, the parties hereto have executed this Partnership Agreement as of the day and year first above written.
				LINPRO: LINPRO HARMANS LAND LIMITED PARTNERSHIP, a Delaware limited partnership By: Linpro Harmans Land Associates Limited Partnership By: /s/ JOHN A. BERRY John A. Berry (Name) General Manager (Title) By: /s/ JOHN CHIRTEA John Chirtea (Name) General Manager (Title)
THE STATE OF ______________ COUNTY OF _________________
BEFORE ME, the undersigned authority, on this day personally appeared and , general partners of LINPRO HARMANS LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership and a general partner of LINPRO HARMANS LAND LIMITED PARTNERSHIP, a Delaware limited partnership, known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledged to me that they executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 30 ^th day of December, 1990.
My commission expires:				Notary Public- in and for County
				PCI: POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation By: /s/ F. J. SPINGLER F. J. Spingler (Name) Vice President - Real Estate (Title)
THE DISTRICT OF COLUMBIA
BEFORE ME, the undersigned authority, on this day personally appeared F. J. Spingler, a Vice President/Real Estate, of Potomac Capital Investment Corporation, a Delaware corporation, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of said corporation, and that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 30 ^th day of December, 1990.
My commission expires: My Comm. Expires Jan. 14, 1992				Notary Public- in and for County The District of Columbia

EXHIBIT "A"

REAL PROPERTY DESCRIPTION

All that lot or parcel of ground situated and lying in Anne Arundel County, Maryland and more particularly described as follows:

Lot 3, containing 14.360 acres, as shown on Plat 2 of 4 inn the subdivision known as Linpro-Harmans Property per Administrative Subdivision Plat recorded in Plat Book 128, Page 29 (the "Administrative Plat") in the Land Records of Anne Arundel County, Maryland (the "Land Records");

Together with the undivided interest allocated to said Lot 3 in the Reserved Parcel for Stormwater Management as set forth in General Note 3 on Plat 1 of the Administrative Plat and all right, title and interest pertaining to said Lot 3 under that certain Storm Water Facilities Maintenance and Management Agreement and Declaration of Easements, Covenants and Restrictions of even or approximate date hereof between Linpro Harmans Land Limited Partnership and Harmans Road Storm Water Association, Inc. and recorded or to be recorded in the Land Records;

Together with rights of vehicular and pedestrian ingress and egress over private 70 foot, 60 foot and 50 foot common access rights-of-way shown on that certain minor subdivision plat recorded in the Land Records in Liber 3646 at Page 103 and all right, title and interest pertaining to said Lot 3 under that certain Maintenance Agreement dated April 10, 1990 between Linpro Harmans Land Limited Partnership and Kop-Flex, Inc. and recorded in the Land Records in Liber 5100, Folio 653;

Together with rights contained in that certain Memorandum of Water Line Easement dated April 10, 1990 between Linpro Harmans Land Limited Partnership and Kop-Flex, Inc. and recorded in the Land Records in Liber 5100, Folio 625; and

Together with any and all easements, privileges, appurtenances, rights, title and interest pertaining to said Lot 3.

		EXHIBIT " B " to the Partnership Agreement
PARTNER REPRESENTATIVES AND KEY PERSONS
LINPRO:
	Name	Address
	Mark S. Corneal John Chirtea John A. Berry	Suite 211 1717 Elton Rd. Silver Spring, MD 20903
PCI :
	Frank J. Spingler Eileen Hallquist	Suite 600 900 19th St., N.W. Washington, D.C. 20006

			EXHIBIT " C " to the Partnership Agreement
PCI CONTRIBUTION NOTE
PROMISSORY NOTE FROM POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation to the Order of HARMANS BUILDING ASSOCIATES, a Maryland general partnership
				December 28, 1990
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS SO REGISTERED OR AN EXEMPTION FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.
	PROMISSORY NOTE

$1,775,000.00				December 28, 1990
FOR VALUE RECEIVED, POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation (the "Maker"), promises to pay to the order of HARMANS BUILDING ASSOCIATES, a Maryland general partnership having an address at 1717 Elton Road, Suite 211, Silver Spring, Maryland 20903 (the "Partnership"), at said address of the Partnership or such other place as the Partnership. may designate in writing to the Maker, the principal sum of One Million Seven Hundred Seventy-Five Thousand and No/l00ths Dollars ($1,775,000.00), without interest. Provided that the Signet Loan (as hereafter defined) has not been paid in full, then the principal sum hereof shall be payable in one (1) installment which shall be dated on the date which occurs one (1) year from the date of this Promissory Note. If the Signet Loan has been paid in full prior to one year from the date hereof, then the principal sum hereof shall be payable in accordance with the terms and provisions of the General Partnership Agreement of the Borrower.
The Maker shall have the right to prepay the principal indebtedness evidenced hereby in whole or in part at any time or times without premium or penalty.
The Maker hereby waives presentment, demand, notice of dishonor, protest and all other demands and notices in connection with the delivery, acceptance and enforcement of this Note.
The Maker agrees to pay on demand all costs of collection, including reasonable attorneys' fees, incurred by the holder in enforcing the obligations created by this Note.
This Note may only be sold, transferred or assigned in whole to Signet Bank/Maryland, a Maryland banking corporation, pursuant to a construction and interim loan transaction in the principal amount of up to Ten Million Six Hundred Thousand Dollars ($10,600,000.00) (the "Signet Loan") and may be further sold, transferred or assigned only in whole by Signet Bank/Maryland. Under no circumstances may this Note be sold, transferred or assigned in part by any holder.
None of the terms or provisions of this Note may be excluded, modified or amended except by a written instrument duly executed on behalf of the Maker, the Partnership ;and the holder of this Note expressly referring hereto and setting forth the provisions- so excluded, modified or amended.
All rights and obligations hereunder shall be governed by the laws of the State of Maryland and this Note shall be deemed to be under seal.
No delay or omission of the Partnership in exercising any right or remedy which the Partnership has hereunder shall constitute a waiver of any such right or remedy. A waiver on one occasion shall not operate as a bar to or waiver of any such right or remedy on any future occasions.
In case any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
WITNESS/ATTEST: By: /s/ Lori LaAsmar		MAKER: POTOMAC CAPITAL INVESTMENT CORPORATION By: /s/ F. J. SPINGLER Frank J. Spingler Vice President
Pay to the order of Signet Bank/Maryland, with full recourse, the foregoing Promissory Note. The undersigned does hereby assign, transfer and convey all of its right, title and interest in and to the foregoing Promissory Note, does hereby endorse the foregoing Promissory Note and does hereby direct the proceeds of the foregoing Promissory Note to be paid to Signet Bank/Maryland, all with full recourse, on this 28th day of December, 1990.
[SIGNATURES CONTINUED ON NEXT PAGE]
WITNESS/ATTEST: By: /s/ Lori LaAsmar By: /s/ Lori LaAsmar		HARMANS BUILDING ASSOCIATES, a Maryland general partnership By: Linpro Harmans Building No. 1 Limited Partnership, a Delaware limited partnership General Partner By: /s/ JOHN CHIRTEA (SEAL) John Chirtea General Partner By: Potomac Capital Investment Corporation, a Delaware corporation, General Partner By: /s/ F. J. SPINGLER Frank J. Spingler Vice President

		EXHIBIT " D " to the Partnership Agreement
	INSURANCE COVERAGE
Type	Limits	Deductible
Property Damage	Maximum $60,000,000 per occurrence	$ 5,000
General Liability	$2,000,000 aggregate $1,000,000 per occurrence	-0-
Excess Liability	Up to $55,000,000 in addition to primary General Liability	-0-
Excess Umbrella Liability	Up to $5,000,000 in addition to primary General Liability	$25,000
Workers Compensation	Statutory $1,000,000	-0-
Above coverage are blanket policies for The Linpro Company. The Partnership would be insured under each policy with the Partnership and/or any lender named as additional insured. Policies are renewed on an annual basis. Note that certain exclusions exist within each policy that affect the limits listed.

	Exhibit "E" to Partnership Agreement
Reimbursable Pre-formation Costs
Engineering	$118,197
Appraisal and Real Estate Taxes	8,731
Geotechnical Studies	12,100
Permit Fees	54,692
Letter of Credit Fees	2,200
Construction Loan Fee	10,000
Pre-development Interest	20,857*
Closing Costs and Legal Fees	44,168
Project Overhead	1.649
	$272,594
_________________ * Subject to readjustments for actual November and December, 1990 interest.

EXHIBIT "F" to the
Partnership Agreement

LIST OF C&P PLANS

C & P SERVICE OPERATIONS CENTER			December 17, 1990 Page 1 of 3
		EXHIBIT F
A.	Contract Drawings and Specifications as follows:
			Date
	1.	Specifications prepared by DNC Architects, Inc.	10/09/89
	2.	Bulletin No. 1 prepared by DNC Architects, Inc.	12/01/89
	3.	Soils Report prepared by Earth Engineering & Sciences, Inc.	10/89
	4.	Facsimile received from Ross Murphy Finkelstein, Inc.	2/16/90
	5.	Letter from DNC Architects, Inc., to The Linpro Company referencing OMNI Construction, Inc.'s, comments on Bid Documents.	1/22/90
	6.	DNC Architects, Inc., Drawings:
		Drawing No .:
		SP-1 Approved for Sediment Control	5/15/90
		SP-2 Approval by Anne Arundel Soil Conservation District	5/15/90
		SP-3 through SP-9	10/09/89
		CS	10/09/89
		A5, A6	10/09/89
		DS	12/01/89
		Al	10/09/89
		A2, A3, A4	12/01/89
		A7	12/01/89
		A8	10/09/89
		A9	12/01/89
		A10, All, A12, A13, A14	10/09/89
		A15	12/01/89
		A16	No Date
		A17, A18, A19	12/01/89
		A20, S1	10/09/89

C & P SERVICE OPERATIONS CENTER			December 17, 1990 Page 2 of 3
		EXHIBIT F
		Drawing No .:	Date
		S2, S3	12/01/89
		S4, S5, S6, S7, S8, S9, S10	10/09/89
		S11, M1, M2, M3, M4, M5, M7, M8	12/01/89
		M9	10/09/89
		M10, El, E2	12/01/89
		E3	10/09/89
		E4	12/01/89
		E5	10/09/89
		E6, E7	12/01/89
		E8	10/09/89
	7.	Greenhorne & O'Mara, Inc. Drawings:
		Drawing No .:
		1 of 4 through 4 of 4	1/05/90
	8.	Greenhorne & O'Mara, Inc. Drawings:
		Sediment Control Drawings
		1 of 5 Approved for Sediment Control:	1/11/90
		2 of 5 through 5 of 5 - 7/89	stamped by Professional Engineer 1/02/90
	9.	Anne Arundel County Department of Public Works Drawings:
		Harman's Road Widening Drawings :
		Road and Storm Drains
		1 of 6 thru 6 of 6 Approved by Dept. of Public Works	8/13/90
		Grading and Sediment Control
		1 of 3 Approved for Sediment Control	9/13/90
		2 of 3 - No Date Stamped by Professional Engineer	5/15/90
		3 of 3 - No Date Stamped by Professional Engineer	6/21/90

C & P SERVICE OPERATIONS CENTER			December 17, 1990 Page 3 of 3
		EXHIBIT F
		Pavement Marking Plan
		1 of 1 Approved by Review Engineer	8/07/90
		Traffic Control Plan
		1 of 1 Approved by Anne Arundel County	8/07/90
	10.	See attached Bid Assumptions dated 12/17/90 and revisions to Division 1 of the Project Manual which are a part of this Exhibit B.

EXHIBIT "G" to the
Partnership Agreement

C&P BUDGET

CERTIFICATE OF AMENDMENT TO CERTIFICATE OF LIMITED PARTNERSHIP OF LINPRO HARMANS LAND LIMITED PARTNERSHIP
This Certificate of Amendment (" Amendment ") is made as of the 28 ^th of day of December, 1990.
WHEREAS, pursuant to that certain Agreement and Certificate of Limited Partnership (the " Original Partnership Agreement ") dated the 1st day of June, 1988, and that certain Certificate` of Limited Partnership (the " Oriainal Certificate ") dated the 1st day of June, 1988 and filed with the Office of the Secretary of State of the State of Delaware on July 5, 1988, a limited partnership was formed pursuant to the Delaware Revised Uniform Limited Partnership Act ("Act"), under the name of Linpro Harmans Land Limited Partnership (the " Partnership "); and
WHEREAS, Potomac Capital Investment Corporation, a Delaware corporation (" PCI ") desires to be admitted as a general partner of the partnership upon the terms and conditions set forth in the Partnership Agreement (as defined below);
WHEREAS, after admission of PCI to the Partnership as a general partner thereof, John A. Berry, Jay G. Cranmer, J. Patrick Armstrong, Peter P. DiLullo and John Chirtea (each of the foregoing being original general partners of the Partnership), together with Kurt M. Eichler, Denise E. Wood, David J. Eichler, Linpro Maryland Admin Partners Limited Partnership and the Irrevocable Trust of Jay G. Cranmer (each of which were original limited partners of the Partnership), have assigned and transferred all of, and Eric Eichler has assigned and transferred a portion of, their right, title and interest in and to the Partnership to Linpro Harmans Land Associates Limited Partnership, a Delaware limited partnership (" Linpro "), such interest to be continued as a general partner's interest in the Partnership; and
WHEREAS, Linpro desires to be admitted to the Partnership as a general partner; and
WHEREAS, Eric Eichler desires to convert his remaining interest in the Partnership to a limited partner's interest in the Partnership; and
WHEREAS, the Partnership is presently in existence as a limited partnership pursuant to the Act; and
WHEREAS, by an Amended and Restated Agreement and Certificate of Limited Partnership (the " Partnership Agreement ") dated the 28 ^th day of December, 1990, the Original Partnership Agreement was amended and restated; and
WHEREAS, the Partnership Agreement and the Act require the filing of this Certificate of Amendment with the Secretary of State;
Now, therefore, the parties hereto do hereby certify that:
1. Names and Addresses of New General Partners . From and after the effective date of this Amendment, the names and the business, residence or mailing addresses of each of the general partners of the Partnership are as follows:
	Name		Business, Residence or Mailing Address
	Linpro Harmans Land Associates Limited Partnership		1717 Elton Road, Suite 211 Silver Spring, Maryland 20903
	Potomac Capital Investment Corporation		Suite 600 900 19th St. Northwest Washington, D.C. 20006
Linpro Harmans Land Associates Limited Partnership and Potomac Capital Investment Corporation are hereby admitted to the Partnership as general partners thereof.
2. Withdrawing General Partners . Effective as of the date of this Amendment, John A. Berry, Jay G. Cranmer, J. Patrick Armstrong, Peter P. DiLullo and John Chirtea hereby withdraw as general partners of the Partnership.
3. Conversion of Eric Eichler's Interest . Effective as of the date of this Amendment, the remaining interest in the Partnership held by Eric Eichler is hereby converted to a limited partner's interest in the Partnership.
4. Ratification . Except as specifically amended by this Amendment, the Original Certificate is hereby confirmed and ratified.
This Certificate of Amendment has been executed as of the day and year first above written by all the general partners of the Partnership.
		LINPRO: LINPRO HARMANS LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership By: _____________________________ __________________________ (Name) ___________________________ (Title) By: /s/ JOHN CHIRTEA John Chirtea (Name) General Manager (Title)
THE DISTRICT OF COLUMBIA
BEFORE ME, the undersigned authority, on this day personally appeared John Chirtea, general partners of LINPRO HARMANS LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership, known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledged to me that they executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 30 ^th day of December, 1990.
My commission expires: My Comm. Exps, Jan. 14, 1992		/s/ Notary Public- in and for County the District of Columbia
		PCI: POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation By: /s/ F. J. SPINGLER F. J. Spingler (Name) Vice President - Real Estate (Title)
THE DISTRICT OF COLUMBIA
BEFORE ME, the undersigned authority, on this day personally appeared F. J. Spingler, a Vice President/Real Estate, of Potomac Capital Investment Corporation, a Delaware corporation, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of said corporation, and that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 30 ^th day of December, 1990.
My commission expires: My Comm. Exps. Jan. 14, 1992		Notary Public- in and for County The District of Columbia

FIRST AMENDMENT TO GENERAL PARTNERSHIP AGREEMENT OF HARMANS BUILDING ASSOCIATES Dated As Of December 28, 1990
This First Amendment to the General Partnership Agreement of Harmans Building Associates (the " Amendment ") is made and entered into effective as of the 28 ^th day of December, 1990, by and between LINPRO HARMANS BUILDING NO. 1 LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter sometimes referred to as " Linpro Building "), and POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation (hereinafter sometimes referred to as " PCI ") (Linpro Building and PCI being hereinafter sometimes referred to individually as a " Partner " and collectively as the "Partners") and LINPRO HARMANS LAND LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter sometimes referred to as the " Withdrawing Partner ").
WITNESSETH
WHEREAS, Harmans Building Associates, a Maryland general partnership (the " Partnership ") was formed under the laws of the State of Maryland pursuant to that certain General Partnership Agreement of Harmans Building Associates dated as of December 28, 1990 (the " Original Partnership Agreement ") by and between the Withdrawing Partner and PCI; and
WHEREAS, the Withdrawing Partner has assigned all of its right, title and interest in and to the Partnership to Linpro Harmans Land Associates Limited Partnership (" Linpro Land "), a Delaware limited partnership and a general partner of the Withdrawing Partner; and
WHEREAS, Linpro Land has assigned all of its right, title and interest in and to the Partnership to the partners of Linpro Land (the " Assigning Partners "); and
WHEREAS, the Assigning Partners have assigned all of their right, title and interest in and to the Partnership to Linpro Building; and
WHEREAS, the Partnership is presently in existence as a general partnership under the Uniform Partnership Act of the State of Maryland; and
WHEREAS , the Partners and the Withdrawing Partner desire to enter into this Amendment for the purpose of (a) admitting Linpro Building into the Partnership as a general partner of the Partnership, (b) second, providing for the withdrawal of the Withdrawing Partner as a partner of the Partnership, and (c) otherwise amending the Original Partnership Agreement as hereinafter set forth;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
1. Admission of Linpro . From and after the effective date of this Amendment, Linpro Building is hereby admitted to the Partnership as a general partner, succeeding to all the rights, title and interests of the Withdrawing Partner in and to the Partnership, including all of the Withdrawing Partner's Percentage Interest in the partnership, capital account, Unrecovered Capital Account, rights to distributions, reimbursements or other payments (including any distributions of cash flow which have not been distributed, rights to any Net Cash Flow and net proceeds including rights to any Rent Change Order Capital Accounts and Deficit Contribution Capital Accounts), fees or commissions, rights to profits, losses and other allocations and all other rights and benefits of the Withdrawing Partner of every description whatsoever belonging to or accruing to the benefit of the Withdrawing Partner.
2. Withdrawing Partner . From and after the effective date of this Amendment, Linpro Harmans Land Limited Partnership hereby withdraws from the Partnership.
3. Linpro . From and after the date of this Amendment, the Original Partnership Agreement is hereby amended to provide that any reference to "Linpro" in the Original Partnership Agreement shall mean and refer to Linpro Harmans Building No.1 Limited Partnership, other than the references to Linpro Harmans Land Limited Partnership in Section III of the Original Partnership Agreement.
4. Continuation of the Partnership . Linpro Building agrees to serve as one of the general partners of the Partnership and PCI agrees to continue to serve as one of the general partners of the Partnership, and each agrees to continue the Partnership until the Partnership is terminated without reconstitution as provided in the Original Partnership Agreement, and the Partners agree that the Partnership has not been dissolved or terminated and shall not be wound up as a result of any of the transactions described in this Amendment.
5. Linpro Obligations . Linpro Building agrees to be bound by all of the terms, provisions and conditions of, and accepts and adopts the terms, conditions and provisions of, the Original Partnership Agreement, as amended by this Amendment. Linpro hereby agrees to assume (to the same extent that the Withdrawing Partner had liability thereon as if it and not the Withdrawing Partner had executed the Original Partnership Agreement), all of the Withdrawing Partner's liabilities, obligations and responsibilities under the Original Partnership Agreement, provided, however, the limitation of liability language contained in Section 20.18 of the Original Partnership Agreement shall also apply to Linpro Building.
6. Defined Terms . Capitalized terms used and defined in this Amendment shall have the meanings assigned to them in this Amendment (including those in the recital paragraphs hereof), and capitalized terms used herein in this Amendment and not defined herein shall have the meanings assigned to them in the Original Partnership Agreement, in each case, unless the context clearly requires otherwise.
7. Effective Date . This Amendment is effective as of the date first above mentioned, and from and after that date (A) the Withdrawing Partner shall cease to be a Partner in or member of the Partnership and (b) that portion of the net profits or net losses and cash flow (including cash flow which has not been distributed) of the Partnership allocable to the Partnership interest of the Withdrawing Partner shall be credited, distributed or charged, as the case may be, to Linpro Building and not to the Withdrawing Partner.
8. Binding Effect . Except as herein otherwise provided to the contrary, this Amendment shall be binding upon and inure to the benefit of the parties hereto, their heirs, legal and personal representatives, successors and assigns; provided, however, that no party shall have any right, power and authority to assign any rights, powers, duties or obligations hereunder.
9. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute but one and the same instrument which may be sufficiently evidenced by one counterpart, and any of the parties hereto may execute this Amendment by signing any such counterpart.
10. Headings and Titles . The headings and titles of the Articles, Sections, Sub-sections and Paragraphs herein have been inserted as a matter of convenience of reference only and shall not control or affect the meaning or construction of any of the operative terms or provisions herein.
11. Gender . Whenever the context shall so require, all words herein in any gender shall be deemed to include the masculine, feminine, or neuter gender, and all singular words shall include the plural, and all plural words shall include the singular.
12. Construction . In case any one or more of the provisions contained in this Amendment shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalid, illegal or unenforceable provision or provisions shall be fully severable and shall not affect any other provision hereof and this Amendment shall be construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein. Furthermore, in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as part of this Amendment a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
13. This Amendment . The words "herein," "hereof," "hereunder," "hereby," "this Amendment" and other similar reference shall be construed to mean and include this Amendment and all amendments thereof and supplements thereto unless the context should clearly indicate or require otherwise.
14. No Third Party Beneficiary Rights . This Amendment is made solely and specifically between and for the benefit of the parties hereto, and their respective successors and assigns, subject to the express provisions hereof relating to successors and assigns, and no other person, individual, corporation or entity, whatsoever, shall have any rights, interests, or claims hereunder or be entitled to any benefits under or on account of this Amendment as a third party beneficiary or otherwise.
15. Exhibits . All exhibits, attachments, annexed instruments and addenda referred to herein shall be considered a part of this Amendment as fully as if and with the same force and effect as if such exhibit, attachment, annex or addendum had been included herein in full.
16. Ratification and Confirmation . Except to the extent specifically amended by this Amendment, the parties hereto do hereby ratify and confirm the terms and provisions of the Original Partnership Agreement.
IN WITNESS WHEREOF, this Amendment is executed as of the day and year first above written.
	WITHDRAWING GENERAL PARTNER: LINPRO HARMANS LAND LIMITED PARTNERSHIP, a Delaware limited partnership By: Linpro Harmans Land Associates Limited Partnership, a Delaware limited partnership By: (Name) (Title) By: /s/ JOHN CHIRTEA John Chirtea (Name) General Partner (Title)
	PARTNERS: LINPRO HARMANS BUILDING NO. 1 LIMITED PARTNERSHIP, a Delaware limited partnership By: Linpro Harmans Land Associates Limited Partnership, a Delaware limited partnership By: (Name) (Title) By: /s/ JOHN CHIRTEA John Chirtea (Name) General Partner (Title)
	PCI: POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation By: /s/ F. J. SPINGLER Vice President Real Estate

SECOND AMENDMENT TO GENERAL PARTNERSHIP AGREEMENT OF HARMANS BUILDING ASSOCIATES Dated As of April 1, 1993
This Second Amendment to the General Partnership Agreement of Harmans Building Associates (the "Amendment") is made and entered into effective as of the ___ day of March, 1993, by and between LINPRO HARMANS BUILDING NO. 1 LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter sometimes referred to as " Withdrawing Partner "), POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation (hereinafter sometimes referred to as " PCI "), and POTOMAC HARMANS CORPORATION, a Maryland Corporation (hereinafter sometimes referred to as " Admitted Partner ") (the Admitted Partner and PCI being hereinafter sometimes referred to individually as a "Partner" and collectively as the "Partners").
WITNESSETH
WHEREAS, Harmans Building Associates, a Maryland general partnership (the "Partnership") was formed under the laws of the State of Maryland pursuant to that certain General Partnership Agreement of Harmans Building Associates dated as of December 28, 1990 (the "Original Partnership Agreement") by and between Linpro Harmans Land Limited Partnership and PCI; and
WHEREAS, the Original Partnership Agreement was amended as of December 28, 1990 by the First Amendment to General Partnership Agreement of the Partnership pursuant to which the Withdrawing Partner was admitted to the Partnership (the Original Partnership Agreement as so amended being hereinafter sometimes referred to as the "Amended Partnership Agreement"); and
WHEREAS, the Withdrawing Partner has assigned all of its right, title and interest in and to the Partnership to the Admitted Partner; and
WHEREAS, the Partnership is presently in existence as a general partnership under the Uniform Partnership Act of the State of Maryland; and
WHEREAS, the Partners and the Withdrawing Partner desire to enter into this Amendment for the purpose of (a) admitting the Admitted Partner into the Partnership as a general partner of the Partnership, (b) providing for the withdrawal of the Withdrawing Partner as a partner of the Partnership and (c) otherwise amending the Amended Partnership Agreement as hereinafter set forth;
NOW, THEREFORE, the parties hereto do hereby agree as-follows:
1. Admission of Admitted Partner . From and after the effective date of this Amendment, Potomac Harmans Corporation is hereby admitted to the Partnership as a general partner, succeeding to all the rights, title and interests of the Withdrawing Partner in and to the Partnership, including all of the Withdrawing Partner's Percentage Interest in the partnership, capital account, Unrecovered Capital Account, rights to distributions, reimbursements or other payments (including any distributions of cash flow which have not been distributed, rights to any Net Cash Flow and net proceeds including rights to any Rent Change Order Capital Accounts and Deficit Contribution Capital Accounts), fees or commissions, rights to profits, losses and other allocations and all other rights and benefits of the Withdrawing Partner of every description whatsoever belonging to or accruing to the benefit of the Withdrawing Partner.
2. Withdrawing Partner . From and after the effective date of this Amendment, Linpro Harmans Building No. 1 Limited Partnership hereby withdraws from the Partnership.
3. Continuation of the Partnership . Potomac Harmans Corporation agrees to serve as one of the general partners of the Partnership and PCI agrees to continue to serve as one of the general partners of the Partnership, and each agrees to continue the Partnership until the Partnership is terminated without reconstitution as provided in the Amended Partnership Agreement, and the Partners agree that the Partnership has not been dissolved or terminated and shall not be wound up as a result of any of the transactions described in this Amendment.
4. Admitted Partner Obligations . The Admitted Partner agrees to be bound by all of the terms, provisions and conditions of, and accepts and adopts the terms, conditions and provisions of, the Amended Partnership Agreement, as amended from time to time. The Admitted Partner hereby agrees to assume (to the same extent that the Withdrawing Partner had liability thereon as if it and not the Withdrawing Partner had executed the Amended Partnership Agreement), all of the Withdrawing Partner's liabilities, obligations and responsibilities under the Original Partnership Agreement; provided, however, that nothing herein shall relieve the Withdrawing Partner of its obligations, if any, under that certain Purchase and Sale Agreement between the Withdrawing Partner and the Admitted Partner of even date herewith.
5. Defined Terms . Capitalized terms used and defined in this Amendment shall have the meanings assigned to them in this Amendment (including those in the recital paragraphs hereof), and capitalized terms used herein in this Amendment and not defined herein shall have the meanings assigned to them in the Amended Partnership Agreement, in each case, unless the context clearly requires otherwise.
6. Effective Date . This Amendment is effective as of the date first above mentioned, and from and after that date (A) the Withdrawing Partner shall cease to be a Partner in or member of the Partnership and (b) that portion of the net profits or net losses and cash flow (including cash flow which has not been distributed) of the Partnership allocable to the Partnership interest of the Withdrawing Partner shall be credited, distributed or charged, as the case may be, to PHC and not to the Withdrawing Partner. The Partnership shall use the "interim closing of the books" method under Treasury Regulation Section 1.706-1 (c)(2) in allocating taxable income and loss to the period prior to the effective date hereof.
7. Binding Effect . Except as herein otherwise provided to the contrary, this Amendment shall be binding upon and inure to the benefit of the parties hereto, their heirs, legal and personal representatives, successors and assigns; provided, however, that no party shall have any right, power and authority to assign any rights, powers, duties or obligations hereunder.
8. Tax Matter Partner . PCI is hereby designated Tax Matters Partner of the Partnership effective December 31, 1992.
9. Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute but one and the same instrument which may be sufficiently evidenced by one counterpart, and any of the parties hereto may execute this Amendment by signing any such counterpart.
10. Headings and Titles . The headings and titles of the Articles, Sections, Subsections and Paragraphs herein have been inserted as a matter of convenience of reference only and shall not control or affect the meaning or construction of any of the operative terms or provisions herein.
11. Construction . In case any one or more of the provisions contained in this Amendment shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalid, illegal or unenforceable provision or provisions shall be fully severable and shall not affect any other provision hereof and this Amendment shall be construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein. Furthermore, in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as part of this Amendment a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
12. This Amendment . The words "herein", "hereof", "hereunder", "hereby", "this Amendment", and other similar reference shall be construed to mean and include this Amendment and all amendments thereof and supplements thereto unless the context should clearly indicate or require otherwise.
13. No Third Party Beneficiary Rights . This Amendment is made solely and specifically between and for the benefit of the parties hereto, and their respective successors and assigns, subject to the express provisions hereof relating to successors and assigns, and no other person, individual, corporation or entity.
14. Exhibits . All exhibits, attachments, annexed instruments and addenda referred to herein shall be considered a part of this Amendment as fully as if with the same force and effect as if such exhibit, attachment, annex or addendum had been included herein in full.
15. Ratification and Confirmation . Except to the extent specifically amended by this Amendment, the parties hereto do hereby ratify and confirm the terms and provisions of the Amended Partnership Agreement.
IN WITNESS WHEREOF, this Amendment is executed as of the day and year first above written.
	WITHDRAWING PARTNER: Linpro Harmans Building No. 1 Limited Partnership, a Delaware limited partnership By: /s/ ERIC EICHLERER Eric Eichler, Managing General Partner By: /s/ JOHN A. BERRY John A. Berry, Managing General Partner By: /s/ JAY G. CRANMER Jay G. Cranmer Managing General Partner
	ADMITTED PARTNER : Potomac Harmans Corporation, a Maryland Corporation By: /s/ F. J. SPINGLER Frank Spingler, President Attest: /s/ WM. SHAPIRO William Dana Shapiro, Secretary
	PCI : Potomac Capital Investment Corporation, a Delaware Corporation By: /s/ F. J. SPINGLER Frank Spingler, Senior Vice President Real Estate Attest: /s/ WM. SHAPIRO William Dana Shapiro, Secretary

ASSIGNMENT OF PARTNERSHIP INTEREST
THIS AGREEMENT is made and entered into as of April 1, 1993, by and between Linpro Harmans Building No. 1 Limited Partnership, a Delaware limited partnership (hereinafter referred to as "Assignor") and Potomac Harmans Corporation, a Maryland Corporation (hereinafter referred to as "Assignee").
W I T N E S S E T H:
WHEREAS, Assignor is a partner in Harmans Building Associates (hereinafter referred to as the "Partnership") and owns with respect to such partnership the percentage ownership (hereinafter called the "Partnership Interest") specified in Exhibit A; and
WHEREAS, Assignor desires to assign and Assignee desires to acquire all of Assignor's right, title and interest in the Partnership, and Assignee is willing to assume Assignor's liabilities, obligations and responsibilities as set forth herein;
NOW, THEREFORE, in consideration of the premises, representations and mutual covenants herein contained and for other good and valuable consideration as herein provided, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1.	Assignment of Partnership Interest. In consideration of $ 1.00 and other good and valuable consideration, and in further consideration of a certain Purchase and Sale Agreement effective April 1, 1993, between Assignor and Assignee (the "Purchase Agreement"), Assignor hereby assigns to Assignee, and Assignee hereby acquires from Assignor, all of Assignor's Partnership Interest as indicated on Exhibit A, which is attached hereto and incorporated herein by reference, including but not limited to a like proportionate interest in all right, title and interest of Assignor in and to the properties (real and personal), capital, cash flow distributions, gains profits and losses of the Partnership.
2.	Effective Date . The assignment herein is effective as of April 1, 1993, and from and after that date (a) Assignor shall cease to be a partner in or member of the Partnership as to all the Partnership Interest herein assigned, and (b) all of the properties (real and personal), capital, cash flow distributions, gains, profits and losses of the Partnership otherwise allocable to Assignor on account of his Partnership Interest therein shall thereafter be credited or charged, as the case may be, to Assignee and not to Assignor.
3.	Future Cooperation on Subsequent Documents. Assignor and Assignee mutually agree to cooperate at all times from and after the date hereof with respect to the supplying of any information required or requested by any governmental agency or regulatory authority and each agrees to execute any documents necessary to effectuate the dissolution of the Partnership and/or the filing of any tax returns.
4.	Successors and Assigns . This Assignment shall be binding upon, and shall inure to the benefit of, the parties hereto and their heirs, legal representatives, successors and assigns.
5.	Survival and Representations . The representations, warranties, covenants and agreements of the parties contained in this Assignment shall survive the consummation of the transactions contemplated hereby.
6.	Modification and Waiver . No supplement, modification, waiver or termination of this Assignment or any provisions hereof shall be binding unless executed in writing by the parties to be bound thereby. No waiver of any of the provisions of this Assignment shall constitute a waiver of any other provision (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.
7.	Governing Law . This Assignment is being executed and is intended to be performed in the State of Maryland and shall be construed and enforced in accordance with the laws of the State of Maryland.
8.	Counterparts . This Assignment may be executed by the parties hereto individually or in any combination, in one or more counterparts, each of which shall be original and all of which shall constitute one and the same agreement.
9.	Mutual Release . For the benefit of Assignor and Assignee and not for the benefit of any third party, Assignor and Assignee hereby acknowledge that as of and after the effective date hereof, the execution of this Assignment shall operate as a full mutual release and discharge of all past, present and future liabilities, debts and obligations whatsoever arising out of or connected with the business of the Partnership, except for those obligations of Assignor and Assignee which arise out of this Assignment and which, by the terms thereof, survive the closing; provided, however, that nothing herein shall relieve any party of its obligations under the Purchase Agreement which is incorporated herein by reference.
10.	Assumption of Liabilities . For the benefit of Assignor and not for the benefit of any third party, Assignee hereby assumes with respect to, and in a fraction equal to, Assignor's Partnership Interest herein assigned, the past, present and future liabilities, debts and obligations whatsoever arising out of or connected with the business of the Partnership; provided, however, that nothing herein shall relieve any party of its obligations under the Purchase Agreement which is incorporated herein by reference.
11.	Right to Continue Use of Partnership Name . Assignor acknowledges that Assignee and any other partners of the Partnership shall have the exclusive right to continue the business of the Partnership under the present trade name of the Partnership.
IN WITNESS WHEREOF, this Assignment is executed as of the day and year first above written.
6701 Democracy Blvd. Suite 711 Bethesda. MD 20817 (Address) 23-2618935 (Fed. I.D.#)		ASSIGNOR: Linpro Harmans Building No. 1 Limited Partnership, a Delaware limited partnership By: /s/ ERIC EICHLERER Eric Eichler, Managing General Partner By: /s/ JOHN A. BERRY John A. Berry, Managing General Partner By: /s/ Jay G. Cranmer Managing General Partner
900 19th Street, N.W. Suite 600 Washington, D.C. 20006 (Address) Applied For (Fed. I.D.#)		ASSIGNEE: Potomac Harmans Corporation, a Maryland Corporation By: /s/ F. J. SPINGLER Frank Spingler, President Attest: /s/ WM. SHAPIRO William Dana Shapiro, Secretary

EXHIBIT A HARMANS BUILDINGASSOCIATES
ASSIGNORS	OWNERSHIP INTEREST BEFORE SALE	OWNERSHIP INTEREST AFTER SALE	OWNERSHIP INTEREST TRANSFERRED	ASSIGNEES
Linpro Harmans Building No. 1 Limited Partnership	50.00%	-0-	50.00%	Potomac Harmans Corporation
TOTAL	50.00%	-0-	50.00%

ENDORSED
FILED
In the Office of the Secretary of State
of the State of California
SEP 20 1991
MARCH FONG EU, Secretary of State

ARTICLES OF INCORPORATION

KJC OPERATING COMPANY

ARTICLE FIRST

The name of this corporation is KJC operating Company.

ARTICLE SECOND

The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporation Code.

ARTICLE THIRD

The name of this corporation's initial agent for service of process is The Prentice-Hall Corporation System, Inc.

ARTICLE FOURTH

The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law.

ARTICLE FIFTH

The corporation is authorized to indemnify the directors and officers of the corporation to the fullest extent permissible under California law.

ARTICLE SIXTH

This corporation is authorized to issue only one class of shares of stock; and the total number of shares which this corporation is authorized to issue is 10,000.

ENDORSED FILED In the Office of the Secretary of State of the State of California SEP 20 1991 MARCH FONG EU, Secretary of State
Section C. Notice of Annual Meetings . Written notice of each annual meeting shall be given to each shareholder entitled to vote, either personally or by mail or other means of written communication, charges prepaid, addressed to such shareholder at the address of the shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice. If no address appears on the records of the corporation or is so given, notice shall be deemed to have been given if sent by mail or other means of written communication addressed to the place where the principal executive office of the corporation is located or if published at least once in some newspaper of general circulation in the county in which such office is located. All such notices shall be sent to each shareholder entitled thereto not less than 10 nor more than 60 days before each annual meeting, and shall specify the place, the day and the hour of such meeting, and shall state those matters which the Board, at the time of mailing of the notice, intends to present for action by the shareholders. If any notice or report addressed to a shareholder at such shareholder's address appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that it is unable to deliver the notice or report to such shareholder, all future notices or reports shall be deemed to have been duly given if they are made available to such shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice or report to all other shareholders. An affidavit of the mailing or other means of giving notice of any shareholders' meeting shall be executed by the Secretary, Assistant Secretary, or any transfer agent of the corporation giving the notice, and shall be filed and maintained in the minute book of the corporation or with the corporate records. Section D. Special Meetings . Special meetings of the shareholders, for any purpose or purposes whatsoever, may be called at any time by the President, or by the Board of Directors, or by the Chairman of the Board, if there is such an officer, or by one or more shareholders holding in the aggregate not less than one-tenth of the voting power of the corporation. Notice of such special meeting shall be given in the same manner as for annual meetings of shareholders. Notices of any special meeting shall specify the place, day and hour of such meeting and the general nature of the business to be transacted, and no other business may be transacted. If a special meeting is called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by mail or by telegraphic or other transmission to the Chairman of the Board, if there is such an officer, the President, any Vice President or the Secretary of the corporation. The time specified for such meeting shall be not less than 35 nor more than 60 days after the of receipt of such request by one of the officers specified the preceding sentence. The officer receiving the request shall cause notice to be promptly given to all shareholders entitled to vote at such meeting that a meeting will be held at the time requested by the person or persons calling the meeting. Section E. Special Notice Required . The notice of any meeting at which directors are to be elected shall include the names of nominees intended at the time of notice to be presented by the Board for election. If action is proposed to be taken at any meeting to obtain the approval of the shareholders pursuant to Section 310 (transactions between the corporation and one or more of the directors), Section 902 (amendment of the Articles of Incorporation), Section 1201 (reorganization), Section 1900 (voluntary dissolution), or Section 2007 (plan of distribution upon dissolution) of the California General Corporation Law, the notice of meeting shall state the general nature of that proposal. Section F. Adjourned Meetings and Notice Thereof . Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares represented thereat either in person or by proxy. It shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken; provided, however, that if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given as in the case of an original meeting. If any meeting is adjourned for more than 45 days from the date set for the original meeting, a new record date shall be fixed or established in accordance with Section A of Article VI of these Bylaws. Section G. Voting . Subject to the provisions of Sections 702 through 704 of the California General Corporation Law, the only persons entitled to vote at any meeting of the shareholders are those persons in whose names shares entitled to vote stand on the share records of the corporation at the close of business on the record date for voting purposes as fixed or established in accordance with Section A of Article VI of these Bylaws. Such vote may be by voice or by ballot; provided, however, that all elections for directors must be by ballot upon demand made by a shareholder at any election and before the voting begins. Subject to the following two sentences, every shareholder entitled to vote at any election for directors shall have the right to cumulate votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the shares held by such shareholder are normally entitled as provided by Article NINTH of the Articles of Incorporation, or to distribute votes on the same principle among as many candidates as the shareholder shall think fit. No shareholders shall be entitled to cumulate votes unless such candidate's or candidates' names have been placed in nomination prior to the voting and the shareholder has given notice at the meeting, prior to the voting, of the shareholder's intention to cumulate votes. If any shareholder has given such notice, all shareholders may cumulate their votes for candidates in nomination. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected. Section H. Quorum . A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. If a quorum is present, the affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum) shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by law or the Articles of Incorporation or hereunder. Section I. Waiver of Notice . The transactions of any meeting of shareholders, either annual or special, however called and noticed and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of such meeting, or an approval of the minutes thereof. Attendance of a person at a meeting shall constitute a waiver of notice of and presence at such meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by law to be included in the notice but not so included, if such objection is expressly made at the meeting. The Secretary shall cause all such waivers, consents or approvals to be filed with the corporate records or made a part of the minutes of the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof; provided, however, that any shareholder approval at a meeting, other than by unanimous approval of those entitled to vote, pursuant to those sections of the California General Corporation Law specified in Section E of Article II of the Bylaws shall be valid only if the general nature of the proposal so approved is stated in any written waiver of notice. Section J. Shareholders' Consent to Action . Any action which, under any provision of the California General Corporation Law, may be taken at a meeting of the shareholders may be taken without a meeting and without prior notice if a consent in writing, setting forth the action taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Directors may not be elected by written consent except by unanimous written consent of all shares entitled to vote for the election of directors; provided, however, that a director may be elected to fill a vacancy on the Board of Directors, other than a vacancy created by the removal of a director, by the written consent of the holders of a majority of the outstanding shares entitled to vote for the election of directors. The Secretary shall cause all such consents to be filed with the corporate records. Any shareholder giving a written consent, a transferee of such shareholder, a personal representative of such shareholder or their respective proxyholders may revoke the written consent of such shareholder by a writing received by the Secretary of the corporation before written consents of the number of shares required to authorize the proposed action have been filed with the Secretary. If the consents of all shareholders entitled to vote have not been solicited in writing, and if the unanimous written consent of all such shareholders shall not have been received, the Secretary shall give prompt notice of the corporate action approved by the shareholders without a meeting. In the case of shareholder approval pursuant to Section 310 (transactions between the corporation and one or more of the directors), Section 317 (indemnification of an officer, director or employee), Section 1201 (reorganization), or Section 2007 (plan of distribution upon dissolution) of the California General Corporation Law, the notice shall be given at least 10 days before the consummation of any action authorized by that approval. Section K. Proxies . Every person entitled to vote shares may authorize another person or persons to act with respect to such shares by a valid written proxy signed by such person or such person's attorney in fact and filed with the Secretary. No proxy shall be valid after the expiration of 11 months from the date of its execution unless otherwise provided in the proxy. Section L. Inspectors of Election . Before any meeting of shareholders, the Board of Directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If the Board of Directors does so appoint inspectors of election, it shall determine whether the number of such inspectors shall be one or three. If no inspectors of election are so appointed, the chairman of the meeting may, and on the request of any person entitled to vote at the meeting shall, appoint inspectors of election at the meeting. If inspectors are appointed by the chairman of the meeting without a request from a person entitled to vote at the meeting, the chairman shall determine if the number of inspectors shall be one or three. If inspectors are appointed at a meeting at the request of one or more persons entitled to vote thereat, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any person entitled to vote at the meeting shall, appoint a person to fill that vacancy. These inspectors shall:
	1. Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum and the authenticity, validity and effect of proxies. 2. Receive votes, ballots or consents. 3. Hear and determine all challenges and questions in any way arising in connection with the right to vote. 4. Count and tabulate all votes or consents. 5. Determine when the polls shall close. 6. Determine the result. 7. Do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.
If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. ARTICLE III. DIRECTORS Section A. Powers . Subject to the limitations of the Articles of Incorporation, these Bylaws and the California General Corporation Law as to action required to be approved by the shareholders or by the outstanding shares or by a less than majority vote of a class or series of preferred shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. The Board may delegate the management of the day-to-day operation of the business of the corporation to a management company or any other person provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board. Section B. Committees of the Board . The Board of Directors may designate, by resolution adopted by a majority of the authorized number of directors, one or more committees, consisting of two or more directors, to serve at the pleasure of the Board. The appointment of members of a committee requires the vote of a majority of the authorized number of directors. Any such committee, to the extent provided in the resolution of the Board, shall have all the authority of the Board except with respect to:
	1. The approval of any plan to lend money to, or guarantee any obligation of or otherwise assist any officer or director of the corporation. 2. The approval of any amendment to the Articles of Incorporation after any shares have been issued. 3. The approval of any sale, lease, conveyance, exchange, transfer or other disposition of all or substantially all of the assets of the corporation other than in the usual and regular course of its business. 4. The approval of a plan of reorganization or any amendment thereto. 5. The approval of a plan of distribution upon the winding up of the corporation. 6. The filling of vacancies on the Board or on any committee of the Board. 7. The fixing of compensation of the directors for serving on the Board or on any committee of the Board. 8. The amendment or repeal of Bylaws or the adoption of new Bylaws. 9. The amendment or repeal of any resolution of the Board. 10. A distribution, except at a rate, in a periodic amount or within a price range set forth in the articles or determined by the Board. 11. The appointment of other committees of the Board or members thereof. 12. The approval of any action for which the California General Corporation Law also requires shareholders' approval or approval of the outstanding shares. 13. The approval of any action for which the approval of the Board of Directors is specifically required under any provision of the Articles of Incorporation or any agreement to which the corporation is a party.
Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these Bylaws, Sections D (quorum), G (place of meetings), I (regular meetings), J (special meetings and notice), K (adjournment), and M (action without meeting), with such changes in the context of those Bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members, except that the time of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee. Special meetings of committees may also be called by resolution of the Board of Directors, and notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not inconsistent with the provisions of these Bylaws. Section C. Number of Directors . The authorized number of directors of the corporation shall be five (5). The authorized number of directors may only be changed by an amendment to this Section adopted by approval of the outstanding shares. Section D. Quorum . Except as hereinafter provided, a majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number be required by law, the Articles of Incorporation or these Bylaws. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors if any action taken is approved by at least a majority of the required quorum for such meeting. Members of the Board may participate in a meeting through the use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another. Participation in a meeting in this manner shall constitute presence in person at such meeting. Section E. Election and Term of Office . The directors shall be elected at each annual meeting of shareholders, but if any such annual meeting is not held, or the directors are not elected thereat, the directors may be elected at any special meeting of shareholders held for that purpose. Subject to Section F of this Article, each director shall hold office until the next annual meeting and until a successor has been elected and qualified. Section F. Vacancies . Vacancies in the Board of Directors may be filled by the shareholders and each director so elected shall hold office until a successor is elected at an annual or a special meeting of the shareholders in accordance with Section E of this Article III. The Board of Directors shall not have the power or authority to fill vacancies in the Board of Directors. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors is increased, or if the shareholders fail at any annual or special meeting of shareholders at which any director or directors are elected to elect the full authorized number of directors to be voted for at that meeting. The Board may declare vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony. If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the shareholders may elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office. Section G. Place of Meeting . Regular meetings of the Board of Directors shall be held at any place within or without the State of California which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the Board may be held at a place so designated, at a place designated in the notice of the meeting or, in the absence of such designation, at the principal executive office. Directors may participate in any meeting, regular or special, through the use of conference telephone or similar communications equipment as provided in Section D of this Article III. Section H. Organization Meeting . Immediately following each annual meeting of shareholders, the Board of Directors shall hold a regular meeting for the purpose of organization, election of officers, appointment of an agent of the corporation for service of process and the transaction of other business. Notice of such meeting is hereby dispensed with. Section I. Other Regular Meetings . Other regular meetings of the Board of Directors shall be held without call at such time as has been designated from time to time by resolution of the Board, or by written consent of all members of the Board. Notice of all such regular meetings of the Board of Directors is hereby dispensed with. Section J. Special Meetings . Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the President, the Chairman of the Board, if there is such an officer, any Vice President, the Secretary or any two directors. Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at that director's address as it is shown on the records of the corporation. If the notice is mailed, it shall be deposited in the United States mail at least 96 hours before the time of the holding of the meeting. If the notice is delivered personally, or by telephone or telegram, it shall be delivered personally or by telephone or to the telegraph company at least 48 hours before the time of the holding of the meeting. The notice need not specify the purpose of the meeting nor, if the meeting is to be held at the principal executive office of the corporation, the place of the meeting. No notice need be given to a director who either before or after the meeting signs a written waiver of notice, a consent to holding the meeting or an approval of the minutes of the meeting or who attends the meeting without protesting the lack of proper notice before or at the commencement of the meeting. The Secretary shall cause all such waivers, consents and approvals to be filed with the corporate records or made a part of the minutes of the meeting. Section K. Adjournment . A majority of the directors present, whether or not a quorum is present, may adjourn any directors' meeting to another time and place. If a meeting is adjourned for more than 24 hours, notice of any adjournment to another time and place shall be given to the directors who were not present at the time of the adjournment. Such notice shall be given prior to the time scheduled for the continuation of the adjourned meeting. Section L. Fees and Compensation . Directors shall not receive any salary for their services as directors, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor. Section M. Action Without Meeting . Any action required or permitted to be taken by the Board of Directors under any provision of the California General Corporation Law and under these Bylaws may be taken without a meeting if all of the directors of the corporation shall individually or collectively consent in writing to such action. The Secretary shall cause such written consent or consents to be filed with the minutes of the proceedings of the Board of Directors. Such action by written consent shall have the same force and effect as the unanimous vote of such directors. ARTICLE IV. OFFICERS Section A. Officers . The officers of the corporation shall be a President, a Secretary and Chief Financial Officer (who may also be called the "Treasurer"). The corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as may be elected in accordance with the provisions of Section C of this Article IV. One person may hold any two or more offices. Section B. Election . The officers of the corporation, except such officers as may be elected in accordance with the provisions of Section C or Section E of this Article IV, shall be elected annually by the Board of Directors, and each shall hold office at the pleasure of the Board until resignation, removal, disqualification or until a successor is elected and qualified. Section C. Subordinate Officers . The Board of Directors may elect such other officers as the business of the corporation may require, each of whom shall hold office at the pleasure of the Board for such period, have such authority and perform such duties as are provided in the Bylaws or as the Board of Directors may from time to time determine. Section D. Removal and Resignation . Any officer may be removed, with or without cause, by a majority of the directors at the time in office at any regular or special meeting of the Board, or, except in case of an officer elected by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving written notice to the Board of Directors, the President or the Secretary of the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section E. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the Bylaws for regular election to such office. Section F. Chairman of the Board . The Chairman of the Board, if there is such an officer, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as from time to time may be assigned by the Board of Directors or prescribed by the Bylaws. Section G. President . Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board, if there is such an officer, the President shall be the general manager and chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall preside at all meetings of the shareholders and, in the absence of the Chairman of the Board, or if there is not such an officer, at all meetings of the Board of Directors. The President shall be an ex officio member of all of the standing committees of the Board, if any, including the executive committee. The President shall also have the general powers and duties of management usually vested in the office of the president of a corporation and shall have such other powers and duties as from time to time may be prescribed by the Board of Directors or the Bylaws. Section H. Vice President . In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors or the Bylaws. Section I. Secretary . The Secretary shall keep or cause to be kept a book of minutes at the principal executive office or such other place as the Board of Directors may order of all meetings of the Board of Directors, committees of the Board and shareholders, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at directors' meetings, the number of shares present or represented at shareholders' meetings and the proceedings thereof. Such minutes shall be kept in written form. The Secretary shall keep or cause to be kept at the principal executive office or at the office of the corporation's transfer agent, as determined by resolution of the Board of Directors, a share register or a duplicate share register showing the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. Such record shall be kept either in written form or in any other form capable of being converted into written form. The Secretary shall give or cause to be given notice of all of the meetings of the shareholders and of the Board of Directors required by the Bylaws or by law to be given, shall keep the seal of the corporation, if there is one, in safe custody and shall have such other powers and perform such other duties as from time to time may be prescribed by the Board of Directors or the Bylaws. Section J. Chief Financial Officer . The Chief Financial Officer (who may also be called the "Treasurer") shall keep and maintain or cause to be kept and maintained adequate and correct books and records of account of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall be open to inspection by any shareholder or director at all reasonable times. The Chief Financial Officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. The Chief Financial Officer shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the President and directors, whenever they request it, an account of all of the transactions of the Chief Financial Officer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as from time to time may be prescribed by the Board of Directors or the Bylaws. ARTICLE V. INDEMNIFICATION Section A. Extent . The corporation shall, to the fullest extent permitted by the California General Corporation Law, indemnify each person who is or was a director or officer of the corporation and shall, to the fullest extent permitted by the California General Corporation Law, have the power to indemnify each person who is or was an employee or agent of the corporation and all other persons whom the corporation is authorized to indemnify (other than fiduciaries of any employee benefit plan in their capacity as such fiduciaries) against (a) all expenses (including, without limitation, attorneys' fees and disbursements), judgments, fines, settlements and other amounts actually and reasonably incurred by such person in connection with any threatened, pending or completed action, suit or proceeding (other than an action or suit by or in the right of the corporation to procure a judgment in its favor), whether civil, criminal, administrative or investigative, or in connection with any appeal therein, or otherwise, and (b) all expenses (including, without limitation, attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with the defense or settlement of any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor, or in connection with any appeal therein, or otherwise. The corporation shall, to the fullest extent permitted by California General Corporation Law, advance to any officer or director, expenses incurred in defending any proceeding prior to the final disposition of the proceeding upon receipt of an undertaking by or on behalf of such officer or director to repay the amount if it shall be determined ultimately that such officer or director is not entitled to be indemnified. The corporation shall have the power to purchase and maintain insurance on behalf of any director, officer, employee or agent of the corporation against any liability asserted against or incurred by such person in such capacity or arising out of such person's status as such whether or not the corporation would have the power to indemnify the agent against such liability under the provisions of this Section A. Section B. Fiduciaries of Employee Benefit Plans . The corporation shall have the power to indemnify any trustee, investment manager or other fiduciary of any employee benefit plan established by the corporation to the fullest extent permitted by law. Section C. Construction of Bylaws . No provision of these Bylaws shall be construed as prohibiting, denying or abrogating any of the general or specific powers or rights conferred by the California General Corporation Law upon the corporation or any court to furnish or award indemnification as otherwise authorized by the California General Corporation Law or any other law now or hereafter in effect. ARTICLE VI. MISCELLANEOUS Section A. Record Date . The Board of Directors may fix, in advance, a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise any rights in respect to any other lawful action. The record date so fixed shall be not more than 60 nor less than 10 days prior to the date of such meeting nor more than 60 days prior to any other action. If no record date, the record date shall be determined as provided in this paragraph. The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day immediately preceding the day on which notice is given or, if notice is waived, at the close of business on the business day immediately preceding the day on which the meeting is held. The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board has been taken, shall be the day on which the first written consent is given. The record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later. Except as otherwise provided in the California General Corporation Law, only shareholders of record as of the record date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution or allotment of rights or to exercise the rights, as the case may be, of a shareholder not withstanding any transfer of any shares on the books of the corporation after the record date. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting. The Board shall fix a new record date if the meeting is adjourned for more than 45 days from the date set for the original meeting. Section B. Inspection of Corporate Records . Any shareholder of the corporation may (i) inspect and copy the records of shareholders' names and addresses and shareholdings during usual business hours on five days' prior written demand on the corporation and (ii) obtain from the transfer agent of the corporation, on written demand and on the tender of such transfer agent's usual charges for such list, a list of the names and addresses of shareholders who are entitled to vote for the election of directors, and the shareholdings of such shareholders, as of the most recent record date for which that list has been compiled or as of a date specified by the shareholder after the date of demand. This list shall be made available to any such shareholder by the transfer agent on or before the later of five business days after the demand is received or the date specified in the demand as the date as of which the list is to be compiled. The share register or duplicate share register, the books of account and minutes of proceedings of the shareholders and the Board of Directors and of committees of directors shall be open to inspection upon the written demand of any shareholder or the holder of a voting trust certificate, at any reasonable time, if for a purpose reasonably related to such holder's interests as a shareholder or as the holder of such voting trust certificate. Such inspection may be made in person or by agent or attorney, and shall include the right to make copies or extracts. Every shareholder and director shall have the absolute right at any reasonable time to inspect all books, records and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. Such inspection by a shareholder or director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents. Section C. Inspection of Bylaws . The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in the State of California, the original or a copy of the Bylaws as amended to date, which shall be open to inspection by any shareholder at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in the State of California, the Secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of the Bylaws as amended to date. Section D. Checks, Drafts . All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as from time to time shall be determined by resolution of the Board of Directors. Section E. Annual Report . The annual report to shareholders referred to in Section 501 of the California General Corporation Law is hereby dispensed with, but the Board of Directors may cause to be sent to the shareholders annual or other periodic reports in such form as they may deem appropriate. Section F. Financial Statements . A copy of any annual financial statement and any income statement of the corporation for each quarterly period of each fiscal year, and any accompanying balance sheet of the corporation as of the end of each such period, that has been prepared by the corporation shall be kept on file in the principal executive office of the corporation for 12 months, and each such statement shall be exhibited at all reasonable times to any shareholder demanding an examination of any such statement or a copy shall be mailed to any such shareholder. A shareholder or shareholders holding at least five percent in the aggregate of the outstanding shares of any class of the corporation may make a written request for an income statement of the corporation for the three-month, six-month or nine-month period (of the then current fiscal year) ended more than 30 days prior to the date of the request and a balance sheet of the corporation as of the end of such period and, in addition, if no annual report for the last fiscal year has been sent to shareholders, an annual report for the last fiscal year containing the statements required by Section 1501 (a) of the California General Corporation Law. If such a request is made, the Chief Financial Officer shall cause the requested statement or statements to be prepared, if not already prepared, and shall deliver personally or mail the statement or statements to the person making the request within 30 days after the receipt of the request. The corporation shall also, on the written request of any shareholder, mail to the shareholder a copy of the last annual, semi-annual, or quarterly income statement which it has prepared, and a balance sheet as of the end of that period. The quarterly income statements and balance sheets referred to in this Section shall be accompanied by the report, if any, of any independent accountants engaged by the corporation or the certificate of an authorized officer of the corporation that the financial statements were prepared without audit from the books and records of the corporation. Section G. Contracts, How Executed . The Board of Directors, except as otherwise provided in the Bylaws, may authorize any officer, officers, agent or agents to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or render it liable for any purpose or for any amount. If any person, acting without such authority, causes the corporation to be liable to any third person by virtue of California General Corporation Law Section 313, the corporation may seek to hold such person liable to the corporation. Section H. Limitation on Contracts . The Board of Directors shall not approve, and the corporation shall not enter into, any contract or arrangement with any Utility unless such contract or arrangement (i) has been approved by the Federal Energy Regulatory Commission or any successor agency, (ii) has been approved by a state public utilities commission, or (iii) is upon terms and conditions of a published tariff of the Utility. As used in these Bylaws, the term "Utility" shall mean a person or entity which is any one or more of the following: (i) an electric utility, (ii) an electric utility holding company, (iii) a wholly or partially owned subsidiary of either an electric utility or electric utility holding company, or (iv) any other person or entity which under regulations adopted pursuant to the Public Utility Regulatory Policies Act of 1978 ("PURPA") is deemed to be primarily engaged in the generation or sale of electric power (other than electric power solely from cogeneration facilities or small power production facilities). All terms used in the immediately preceding sentence which are defined in PURPA or the regulations adopted thereunder shall have the meanings given to such terms in PURPA or such regulations. Section I. Share Certificates . A share certificate or certificates of the corporation shall be issued to each shareholder when any such shares are fully paid. All such certificates shall be signed by the Chairman of the Board, if there is such an officer, or the President or any Vice President and by the Chief Financial Officer or any Assistant Treasurer or the Secretary or any Assistant Secretary. Any or all of the signatures on the certificate may be facsimile. Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or the Bylaws may provide; provided, however, that any such certificate so issued prior to full payment shall state the total amount of consideration to be paid therefor and the amount paid thereon. Section J. Representation of Shares of Other Corporations and of Partnership Interests . The Chairman of the Board, if there is such an officer, the President, any Vice President or any other person authorized by resolution of the Board of Directors or by any of the foregoing designated officers is authorized to vote on behalf of the corporation any and all shares of any other corporation or any partnership interests in any partnership standing in the name of the corporation. The authority granted to such officers to vote or represent on behalf of the corporation any and all shares held by the corporation of any other corporation and any partnership interests in any partnership may be exercised by any of these officers in person or by any person authorized to do so by a proxy duly executed by these officers. Section K. Amendments . These Bylaws may be amended or repealed only by approval of the outstanding shares.

BYLAWS
OF
KRAMER JUNCTION COMPANY

ARTICLE I
OFFICES

Section 1. Principal Executive Office . The Board of Directors by resolution shall designate a principal executive office for the corporation at any place where the corporation is qualified to do business. The Board of Directors is granted full power and authority to change said principal executive office from one location to another.

Section 2. Principal Business Office . If the principal executive office is located outside California, and the corporation has one or more business offices in California, the Board of Directors shall designate a principal business office in the State of California.

ARTICLE II
MEETINGS OF SHAREHOLDERS

          Section 1.       Place of Meetings . All meetings of shareholders shall be held either at the principal executive office or at any other place within or without the State of California which may be designated by the Board of Directors or by the written consent of all shareholders entitled to vote at such meeting given either before or after the meeting and filed with the Secretary of the corporation.

          Section 2.       Annual Meetings . The annual meetings of shareholders shall be held on the last Thursday of April at 10:00 A.M., local time, or at such other date and time as may be fixed by the Board of. Directors; provided, however, that should such day fall upon a legal holiday, then any such annual meeting of shareholders shall be held at the same time and place on the first day thereafter which is not a legal holiday. At such meetings directors shall be elected, reports of the affairs of the corporation shall be considered and any other business may be transacted which is within the powers of the shareholders.

          Section 3.       Notice of Annual Meetings . Written notice of each annual meeting shall be given to each shareholder entitled to vote, either personally or by mail or other means of written communication, charges prepaid, addressed to such shareholder at the address of the shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice. If no address appears on the records of the corporation or is so given, notice shall be deemed to have been given if sent by mail or other means of written communication addressed to the place where the principal executive office of the corporation is located or if published at least once in some newspaper of general circulation in the county in which such office is located. All such notices shall be sent to each shareholder entitled thereto not less than 10 nor more than 60 days before each annual meeting, and shall specify the place, the day and the hour of such meeting, and shall state those matters which the Board, at the time of mailing of the notice, intends to present for action by the shareholders. If any notice or report addressed to a shareholder at such shareholder's address appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that it is unable to deliver the notice or report to such shareholder, all future notices or reports shall be deemed to have been duly given if they are made available to such shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice or report to all other shareholders.

          An affidavit of the mailing or other means of giving notice of any shareholders' meeting shall be executed by the Secretary, Assistant secretary, or any transfer agent of the corporation giving the notice, and shall be filed and maintained in the minute book of the corporation or with the corporate records.

          Section 4.      Special Meetings. Special meetings of the shareholders, for any purpose or purposes whatsoever, may be called at any time by the President, or by the Board of Directors, or by the chairman of the Board, if there is such an officer, or by one or more shareholders holding in the aggregate not less than one-tenth of the voting power of the corporation. Notice of such special meeting shall be given in the same manner as for annual meetings of shareholders. Notices of any special meeting shall specify the place, day and hour of such meeting and the general nature of the business to be transacted, and no other business may be transacted.

          If a special meeting is called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by mail or by telegraphic or other facsimile transmission to the Chairman of the Board, if there is such an officer, the President, any Vice President or the Secretary of the corporation. The time specified for such meeting shall be not less than 35 nor more than 60 days after the date of receipt of such request by one of the officers specified in the preceding sentence. The officer receiving the request shall cause notice to be promptly given to all shareholders entitled to vote at such meeting that a meeting will be held at the time requested by the person or persons calling the meeting.

          Section 5.       Special Notice Required . The notice of any meeting at which directors are to be elected shall include the names of nominees intended at the time of notice to be presented by the Board for election. If action is proposed to be taken at any meeting to obtain the approval of the shareholders pursuant to Section 310 (transactions between the corporation and one or more of the directors), Section 902 (amendment of the Articles of Incorporation), Section 1201 (reorganization), Section 1900 (voluntary dissolution), or section 2007 (plan of distribution upon dissolution) of the California General Corporation Law, the notice of meeting shall, state the general nature of that proposal.

          Section 6.       Adjourned Meetings and Notice Thereof . Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares represented thereat either in person or by proxy.

          It shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken; provided, however, that if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given as in the case of an original meeting. If any meeting is adjourned for more than 45 days from the date set for the original meeting, a new record date shall be fixed or established in accordance with Section 1 of Article VI of these Bylaws.

          Section 7.       Voting . Subject to the provisions of Sections 702 through 704 of the California General Corporation Law, the only per-sons entitled to vote at any meeting of the shareholders are those persons in whose names shares entitled to vote stand on the share records of the corporation at the close of business on the record date for voting purposes as fixed or established in accordance with Section 1 of Article VI of these Bylaws. such vote may be by voice or by ballot; provided, however, that all elections for directors must be by ballot upon demand made by a shareholder at any election and before the voting begins. Subject to the following two sentences, every shareholder entitled to vote at any election for directors shall have the right to cumulate votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the shares held by such shareholder are normally entitled as provided by Article NINTH of the Articles of incorporation, or to distribute votes on the same principle among as many candidates as the shareholder shall think fit. No shareholders shall be entitled to cumulate votes unless such candidate's or candidates' names have been placed in nomination prior to the voting and the shareholder has given notice at the meeting, prior to the voting, of the shareholder's intention to cumulate votes. If any shareholder has given such notice, all shareholders may cumulate their votes for candidates in nomination. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected.

          Section 8.       Quorum . A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. if a quorum is present, the affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum) shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by law or the Articles of Incorporation or hereunder.

          Section 9.       Waiver of Notice . The transactions of any meeting of shareholders, either annual or special, however called and noticed and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of such meeting, or an approval of the minutes thereof. Attendance of a person at a meeting shall constitute a waiver of notice of and presence at such meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by law to be included in the notice but not so included, if such objection is expressly made at the meeting. The Secretary shall cause all such waivers, consents or approvals to be filed with the corporate records or made a part of the minutes of the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof; provided, however, that any shareholder approval at a meeting, other than by unanimous approval of those entitled to vote, pursuant to those sections of the California General Corporation Law specified in Section 5 of Article II of the Bylaws shall be valid only if the general nature of the proposal so approved is stated in any written waiver of notice.

          Section 10.       Shareholders' Consent to Action . Any action which, under any provision of the California General Corporation Law, may be taken at a meeting of the shareholders may be taken without a meeting and without prior notice if a consent in writing, setting forth the action taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Directors may not be elected by written consent except by unanimous written consent of all shares entitled to vote for the election of directors; provided, however, that a director may be elected to fill a vacancy on the Board of Directors, other than a vacancy created by the removal of a director, by the written consent of the holders of a majority of the outstanding shares entitled to vote for the election of directors. The Secretary shall cause all such consents to be filed with the corporate records. Any shareholder giving a written consent, a transferee of such shareholder, a personal representative of such shareholder or, their respective proxyholders may revoke the written consent of such shareholder by a writing received by the Secretary of the corporation before written consents of the number of shares required to authorize the proposed action have been filed with the Secretary.

          If the consents of all shareholders entitled to vote have not been solicited in writing, and if the unanimous written consent of all such shareholders shall not have been received, the secretary shall give prompt notice of the corporate action approved by the shareholders without a meeting. In the case of shareholder approval pursuant to Section 310 (transactions between the corporation and one or more of the directors), Section 317 (indemnification of an officer, director or employee), Section 1201 (reorganization), or Section 2007 (plan of distribution upon dissolution) of the California General Corporation Law, the notice shall be given at least 10 days before the consummation of any action authorized by that approval.

          Section 11.       Proxies . Every person entitled to vote shares may authorize another person or persons to act with respect to such shares by a valid written proxy signed by such person or such person's attorney in fact and filed with the Secretary. No proxy shall be valid after the expiration of 11 months from the date of its execution unless otherwise provided in the proxy.

          Section 12.      I nspectors of_Election . Before any meeting of shareholders, the Board of Directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If the Board of Directors does so appoint inspectors of election, it shall determine whether the number of such inspectors shall be one or three. If no inspectors of election are so appointed, the chairman of the meeting may, and on the request of any person entitled to vote at the meeting shall, appoint inspectors of election at the meeting. If inspectors are appointed by the chairman of the meeting without a request from a person entitled to vote at the meeting, the chairman shall determine if the number of inspectors shall be one or three. If inspectors are appointed at a meeting at the request of one or more persons entitled to vote thereat, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any person entitled to vote at the meeting shall, appoint a person to fill that vacancy.

          These inspectors shall:

           (a)      Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum and the authenticity, validity and effect of proxies.

           (b)      Receive votes, ballots or consents.

           (c)      Hear and determine all challenges and questions in any way arising in connection with the right to vote.

           (d)      Count and tabulate all votes or consents.

           (e)      Determine when the polls shall close.

           (f)      Determine the result.

           (g)      Do any other acts that may be proper to conduct, the election or vote with fairness to all shareholders.

          If there are three inspectors of election, the decision, act or certificate of majority is effective in all respects as the decision, act or certificate of all.

ARTICLE III
DIRECTORS

          Section 1.       Powers . Subject to the limitations of the Articles of incorporation, these Bylaws and the California General Corporation Law as to action required to be approved by the shareholders or by the outstanding shares or by a less than majority vote of a class or series of preferred shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. The Board may delegate the management of the day-to-day operation of the business of the corporation to a management company or any other person provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board.

          Section 2.       Committees or the Board . The Board of Directors may designate, by resolution adopted by a majority of the authorized number of directors, one or more committees, consisting of two or more directors, to serve at the pleasure of the Board. The appointment of members of a committee requires the vote of a majority of the authorized number of directors. Any such committee, to the extent provided in the resolution of the Board, shall have all the authority of the Board except with respect to:

           (a)      The approval of any plan to lend money to, or guarantee any obligation of or otherwise assist any officer or director of the corporation.

           (b)      The approval of any amendment to the Articles of Incorporation after any shares have been issued.

           (c)      The approval of any sale, lease, conveyance, exchange, transfer or other disposition of all or substantially all of the assets of the corporation other than in the usual and regular course of its business.

           (d)      The approval of a plan of reorganization or any amendment thereto.

           (e)      The approval of a plan of distribution upon the winding up of the corporation.

           (f)      The filling of vacancies on the Board or on any committee of the Board.

           (g)      The fixing of compensation of the directors for serving on the Board or on any committee of the Board.

           (h)      The amendment or repeal of Bylaws or the adoption of new Bylaws.

           (i)      The amendment or repeal of any resolution of the Board.

           (j)      A distribution, except at a rate, in a periodic amount or within a price range set forth in the articles or determined by the Board.

           (k)      The appointment of other committees of the Board or members thereof.

           (l)      The approval of any action for which the California General Corporation Law also requires shareholders' approval or approval of the outstanding shares.

           (m)      The approval of any action for which the approval of the Board of Directors is specifically required under any provision of the Articles of Incorporation or any agreement to which the corporation is a party.

          Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these Bylaws, Sections 4 (quorum), 7 (place of meetings) , 9 (regular meetings), 10 (special meetings and notice), 11 (adjournment), and 13 (action without meeting), with such changes in the context of those Bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members, except that the time of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee. Special meetings of committees may also be called by resolution of the Board of Directors, and notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not inconsistent with the provisions of these Bylaws.

          Section 3.       Number of Directors . The authorized number of directors of the corporation shall be five (5). The authorized number of directors may only be changed by an amendment to this Section adopted by approval of the outstanding shares; provided that an amendment reducing the number of directors to a number less than five (5) cannot be adopted if the votes cast against its adoption at a meeting or the shares not consenting in the case of action by written consent are equal to more than 16 2/3 percent of the votes entitled to be cast.

          Section 4.       Quorum . Except as hereinafter provided, a majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number be required by law, the Articles of Incorporation or these Bylaws. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors if any action taken is approved by at least a majority of the required quorum for such meeting. Members of the Board may participate in a meeting through the use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another. Participation in a meeting in this manner shall constitute presence in person at such meeting.

          Section 5.       Election and Term of Office . The directors shall be elected at each annual meeting of shareholders, but if any such annual meeting is not held, or the directors are not elected thereat, the directors may be elected at any special meeting of shareholders held for that purpose. Subject to Section 6 of this Article, each director shall hold office until the next annual meeting and until a successor has been elected and qualified.

          Section 6.       Vacancies . Vacancies in the Board of Directors may be filled by the shareholders and each director so elected shall hold office until a successor is elected at an annual or a special meeting of the shareholders in accordance with Section 5 of this Article III. The Board of Directors shall not have the power or authority to fill vacancies in the Board of Directors.

          A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors is increased, or if the shareholders fail at any annual or special meeting of shareholders at which any director or directors are elected to elect the full authorized number of directors to be voted for at that meeting. The Board may declare vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony.

          If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the shareholders may elect a successor to take office when the resignation in to become effective.

          No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office.

          Section 7.       Place of Meeting . Regular meetings of the Board of Directors shall be held at any place within or without the state of California which has been designated from time to time by resolution of the Board or by written consent of all members of the Board in the absence of such designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the Board may be held at a place so designated, at a place designated in the notice of the meeting or, in the absence of such designation, at the principal executive office. Directors may participate in any meeting, regular or special, through the use of conference telephone or similar communications equipment as provided in Section 4 of this Article Ill.

          Section 8.       Organization Meeting . Immediately following each annual meeting of shareholders, the Board of Directors shall hold a regular meeting for the purpose of organization, election of officers, appointment of an agent of the corporation for service of process and the transaction of other business. Notice of such meeting is hereby dispensed with.

          Section 9.       Other Regular Meetings . Other regular meetings of the Board of Directors shall be hold without call at such time as has been designated from time to time by resolution of the Board, or by written consent of all members of the Board. Notice of all such regular meetings of the Board of Directors is hereby dispensed with.

          Section 10.       Special Meetings . Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the President, the Chairman of the Board, if there is such an officer, any Vice-President, the Secretary or any two directors.

          Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at that director's address an it is shown on the records of the corporation. If the notice is mailed, it shall be deposited in the United States mail at least 96 hours before the time of the holding of the meeting. If the notice is delivered personally, or by telephone or telegram, it shall be delivered personally or by telephone or to the telegraph company at least 48 hours before the time of the holding of the meeting. The notice need not specify the purpose of the meeting nor, if the meeting is to be held at the principal executive office of the corporation, the place of the meeting. No notice need be given to a director who either before or after the meeting signs a written waiver of notice, a consent to holding the meeting or an approval of the minutes of the meeting or who attends the meeting without protesting the lack of proper notice before or at the commencement of the meeting. The Secretary shall cause all such waivers, consents and approvals to be filed with the corporate records or made a part of the minutes of the meeting.

          Section 11.       Adjournment . A majority of the directors present, whether or not a quorum is present, may adjourn any directors' meeting to another time and place. If a meeting is adjourned for more than 24 hours, notice of any adjournment to another time and place shall be given to the directors who were not present at the time of the adjournment. Such notice shall be given prior to the time scheduled for the continuation of the adjourned meeting.

          Section 12.       Fees and Compensation . Directors shall not receive any salary for their services as directors, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor.

          Section 13.       Action Without Meeting . Any action required or permitted to be taken by the Board of Directors under any provision of the California General Corporation Law and under these Bylaws may be taken without a meeting if all of the directors of the corporation shall individually or collectively consent in writing to such action. The Secretary shall cause such written consent or consents to be filed with the minutes of the proceedings of the Board of Directors. Such action by written consent shall have the same force and effect as the unanimous vote of such directors.

ARTICLE IV
OFFICERS

          Section 1.       Officers . The officers of the corporation shall be a President, a Secretary and Chief Financial officer (who may also be called the Treasurer). The corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as may be elected in accordance with the provisions of Section 3 of this Article IV one person may hold any two or more offices.

          Section 2.       Election . The officers of the corporation, except such officers as may be elected in accordance with the provisions of Section 3 or Section 5 of this Article IV, shall be elected annually by the Board of Directors, and each shall hold office at the pleasure of the Board until resignation, removal, disqualification or until a successor is elected and qualified.

          Section 3.       Subordinate officers . The Board of Directors may elect such other officers as the business of the corporation may require, each of whom shall hold office at the pleasure of the Board for such period, have such authority and perform such duties as are provided in the Bylaws or as the Board of Directors may from time to time determine.

          Section 4.       Removal and Resignation . Any officer may be removed, with or without cause, by a majority of the directors at the time in office at any regular or special meeting of the Board, or, except in case of an officer elected by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors.

          Any officer may resign at any time by giving written notice to the Board of Directors, the President or the secretary of the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

          Section 5.       Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the Bylaws for regular election to such office.

          Section 6.       Chairman of the Board . The Chairman of the Board, if there is such an officer, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as from time to time may be assigned by the Board of Directors or prescribed by the Bylaws.

          Section 7.       President . Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board, if there is such an officer, the President shall be the general manager and chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall preside at all meetings of the shareholders and, in the absence of the Chairman of the Board, or if there is not such an officer, at all meetings of the Board of Directors. The President shall be an ex officio member of all of the standing committees of the Board, if any, including the executive committee. The President shall also have the general powers and duties of management usually vested in the office of the president of a corporation and shall have such other powers and duties as from time to time may be prescribed by the Board of Directors or the Bylaws.

          Section 8.       Vice-President. In the absence or disability of the President, the Vice-Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice-President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice-Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors or the Bylaws.

          Section 9.       Secretary . The secretary shall keep or cause to be kept a book of minutes at the principal executive office or such other place as the Board of Directors may order of all meetings of the Board of Directors, committees of the Board and shareholders, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at directors' meetings, the number of shares present or represented at shareholders' meetings and the proceedings thereof. Such minutes shall be kept in written form.

          The Secretary shall keep or cause to be kept at the principal executive office or at the office of the corporation's transfer agent, as determined by resolution of the Board of Directors, a share register or a duplicate share register showing the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. Such record shall be kept either in written form or in any other form capable of being converted into written form.

          The secretary shall give or cause to be given notice of all of the meetings of the shareholders and of the Board of Directors required by the Bylaws or by law to be given, shall keep the seal of the corporation, if there is one, in safe custody and shall have such other powers and perform such other duties as from time to time may be prescribed by the Board of Directors or the Bylaws.

          Section 10.       Chief Financial Officer . The Chief Financial officer (who may also be called the Treasurer) shall keep and maintain or cause to be kept and maintained adequate and correct books and records of account of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall be open to inspection by any shareholder or director at all reasonable times.

          The Chief Financial Officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. The Chief Financial officer shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the President and directors, whenever they request it, an account of all of the transactions of the Chief Financial Officer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as from time to time may be prescribed by the Board of Directors or the Bylaws.

ARTICLE V
INDEMNIFICATION

          Section 1.       Extent . The corporation shall, to the fullest extent permitted by the California General Corporation Law, indemnify each person who is or was a director or officer of the corporation and shall, to the fullest extent permitted by the California General Corporation Law, have the power to indemnify each person who is or was an employee or agent of the corporation and all other persons whom the corporation is authorized to indemnify (other than fiduciaries of any employee benefit plan in their capacity as such fiduciaries) against (a) all expenses (including, without limitation, attorneys' fees and disbursements), judgments, fines, settlements and other amounts actually and reasonably incurred by such person in connection with any threatened, pending or completed action, suit or proceeding (other than an action or suit by or in the right of the corporation to procure a judgment in its favor), whether civil, criminal, administrative or investigative, or in connection with any appeal therein, or otherwise, and (b) all expenses (including, without limitation, attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with the defense or settlement of any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor, or in connection with any appeal therein, or otherwise.

          The corporation shall have the power to purchase and maintain insurance on behalf of any director, officer, employee or agent of the corporation against any liability asserted against or incurred by such person in such capacity or arising out of such person's status as such whether or not the corporation would have the power to indemnify the agent against such liability under the provisions of this Section 1.

          Section 2.       Fiduciaries of Employee Benefit Plans . The corporation shall have the power to indemnify any trustee, investment manager or other fiduciary of any employee benefit plan established by the corporation to the fullest extent permitted by law.

          Section 3.       Construction of Bylaws . No provision of these Bylaws shall be construed as prohibiting, denying or abrogating any of the general or specific powers or rights conferred by the California General Corporation Law upon the corporation or any court to furnish or award indemnification as otherwise authorized by the California General Corporation Law or any other law now or hereafter in effect.

ARTICLE VI
MISCELLANEOUS

          Section 1.       Record Date . The Board of Directors may fix, in advance, a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise any rights in respect to any other lawful action. The record date so fixed shall be not more than 60 nor less than 10 days prior to the date of such meeting nor more than 60 days prior to any other action.

          If no record date is fixed by the Board of Directors, the record date shall be determined as provided in this paragraph. The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day immediately preceding the day on which notice is given or, if notice is waived, at the close of business on the business day immediately preceding the day on which the meeting is held. The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board has been taken, shall be the day on which the first written consent is given. The record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later.

          Except as otherwise provided in the California General Corporation Law, only shareholders of record as of the record date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution or allotment of rights or to exercise the rights, as the case may be, of a shareholder notwithstanding any transfer of any shares on the books of the corporation after the record date.

          A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting. The Board shall fix a new record date if the meeting is adjourned for more than 45 days from the date set for the original meeting.

          Section 2.       Inspection of Corporate Records . Any shareholder of the corporation may (i) inspect and copy the records of shareholders' names and addresses and shareholdings during usual business hours on five days' prior written demand on the corporation and (ii) obtain from the transfer agent of the corporation, on written demand and on the tender of such transfer agent's usual charges for such list, a list of the names and addresses of shareholders who are entitled to vote for the election of directors, and the shareholdings of such shareholders, as of the most recent record date for which that list has been compiled or as of a date specified by the shareholder after the date of demand. This list shall be made available to any such shareholder by the transfer agent on or before the later of five business days after the demand is received or the date specified in the demand as the date as of which the list is to be compiled.

          The share register or duplicate share register, the books of account and minutes of proceedings of the shareholders and the Board of Directors and of committees of directors shall be open to inspection upon the written demand of any shareholder or the holder of a voting trust certificate,, at any reasonable time, if for a purpose reasonably related to such holder's interests as a shareholder or as the holder of such voting trust certificate. Such inspection may be made in person or by agent or attorney, and shall include the right to make copies or extracts.

          Every shareholder and director shall have the absolute right at any reasonable time to inspect all books, records and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. Such inspection by a shareholder or director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

          Section 3.       Inspection of Bylaws . The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in the State of California, the original or a copy of the Bylaws as amended to date, which shall be open to inspection by any shareholder at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in the State of California, the Secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of the Bylaws as amended to date.

          Section 4.       Checks, Drafts . All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as from time to time shall be determined by resolution of the Board of Directors.

          Section 5.       Annual Report . The annual report to shareholders referred to in Section 501 of the California General Corporation Law is hereby dispensed with, but the Board of Directors may cause to be sent to the shareholders annual or other periodic reports in such form as they may deem appropriate.

          Section 6.       Financial Statements . A copy of any annual financial statement and any income statement of the corporation for each quarterly period of each fiscal year, and any accompanying balance sheet of the corporation as of the end of each such period, that has been prepared by the corporation shall be kept on file in the principal executive office of the corporation for 12 months, and each such statement shall be exhibited at all reasonable times to any shareholder demanding an examination of any such statement or a copy shall be mailed to any such shareholder.

          A shareholder or shareholders holding at least five percent in the aggregate of the outstanding shares of any class of the corporation may make a written request for an income statement of the corporation for the three-month, six-month or nine-month period (of the then current fiscal year) ended more than 30 days prior to the date of the request and a balance sheet of the corporation as of the end of such period and, in addition, if no annual report for the last fiscal year has been sent to shareholders, an annual report for the last fiscal year containing the statements required by Section 1501 (a) of the California General Corporation Law. If such a request is made, the chief Financial Officer shall cause the requested statement or statements to be prepared, if not already prepared, and shall deliver personally or mail the statement or statements to the person making the request within 30 days after the receipt of the request.

          The corporation shall also, on the written request of any shareholder, mail to the shareholder a copy of the last annual, semi-annual, or quarterly income statement which it has prepared, and a balance sheet as of the end of that period.

          The quarterly income statements and balance sheets referred to in this Section shall be accompanied by the report, if any, of any independent accountants engaged by the corporation or the certificate of an authorized officer of the corporation that the financial statements were prepared without audit from the books and records of the corporation.

          Section 7.       Contracts, How Executed . The Board of Directors, except as otherwise provided in the Bylaws, may authorize any officer, officers, agent or agents to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or render it liable for any purpose or for any amount. If any person, acting without such authority, causes the corporation to be liable to any third person by virtue of California General Corporation Law Section 313, the corporation may seek to hold such person liable to the corporation.

          Section 8.       Limitation on Contracts . The Board of Directors shall not approve, and the corporation shall not enter into, any contract or arrangement with any Utility unless such contract or arrangement (i) has been approved by the Federal Energy Regulatory Commission or any successor agency, (ii) has been approved by a state public utilities commission, or (iii) is upon terms and conditions of a published tariff of the Utility. As used in these Bylaws, the term Utility shall mean a person or entity which is any one or more of the following: (i) an electric utility, (ii) an electric utility holding company, (iii) a wholly or partially owned subsidiary of either an electric utility or electric utility holding company, or (iv) any other person or entity which under regulations adopted pursuant to the Public Utility Regulatory Policies Act of 1978 (PURPA) is deemed to be primarily engaged in the generation or sale of electric power (other than electric power solely from cogeneration facilities or small power production facilities). All terms used in the immediately preceding sentence which are defined in PURPA or the regulations adopted thereunder shall have the meanings given to such terms in PURPA or such regulations.

          Section 9.       Share Certificates . A share certificate or certificates of the corporation shall be issued to each shareholder when any such shares are fully paid. All such certificates shall be signed by the Chairman of the Board, if there is such an officer, or the President or any Vice-President and by the chief Financial Officer or any Assistant Treasurer or the Secretary or any Assistant Secretary. Any or all of the signatures on the certificate may be facsimile.

          Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or the Bylaws may provide; provided, however, that any such certificate so issued prior to full payment shall state the total amount of consideration to be paid therefor and the amount paid thereon.

          Section 10.       Representation of Shares of Other Corporations and of Partnership Interests . The Chairman of the Board, if there is such an officer, the President, any Vice-President or any other person authorized by resolution of the Board of Directors or by any of the foregoing designated officers is authorized to vote on behalf of the corporation any and all shares of any other corporation or any partnership interests in any partnership standing in the name of the corporation. The authority granted to such officers to vote or represent on behalf of the corporation any and all shares held by the corporation of any other corporation and any partnership interests in any partnership may be exercised by any of these officers in person or by any person authorized to do so by a proxy duly executed by these officers.

          Section 11.       Amendments . These Bylaws may be amended or repealed only by approval of the outstanding shares.

CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF KRAMER JUNCTION COMPANY
Alan M. Albright certifies that: 1. I am the sole incorporator of KRAMER JUNCTION COMPANY, a California corporation. 2. I hereby adopt the following amendment of the Articles of Incorporation of this corporation. ARTICLE ELEVENTH is amended to read as follows: No Common Shares may be mortgaged, pledged, subjected to any security interest or otherwise hypothecated to any person or entity other than the corporation. 3. No directors were named in the original Articles of incorporation and none have been elected. 4. No shares have been issued. I further declare under penalty of perjury under the laws of the State of California that the matters set forth in this Certificate are true and correct of my own knowledge. DATE: June 20, 1991
	/s/ Alan M. Albright Alan M. Albright Incorporator

CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF KRAMER JUNCTION COMPANY
Alan H. Albright certifies that: 1. I am the sole incorporator of KRAMER JUNCTION COMPANY, a California corporation. 2. I hereby adopt the following amendments of the Articles of Incorporation of this corporation. ARTICLE SECOND is amended to read as follows: (a) The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporation Code. (b) Notwithstanding the provisions of subarticle (a) above, the unanimous affirmative vote of the board of directors of the corporation shall be required to authorize the corporation to engage in any business other than (i) the ownership of general and/or limited partnership interests in one or more of the Solar Partnerships (as defined in Article Seventh below), (ii) acting as managing general partner of one or more of the Solar Partnerships, (iii) providing management, operation and/or maintenance services to one or more of the Solar Partnerships and (iv) other activities which are incidental to, or in furtherance of, the activities set forth in clauses (i) through (iii). So much of subarticle (c) of ARTICLE SEVENTH as now reads: If, after giving effect to such automatic conversion, there are any issued and outstanding Class NU Common Shares and the aggregate number of issued and outstanding Class U Common Shares exceeds the aggregate number of issued and outstanding Class NU Common Shares, the corporation shall purchase, and such shareholder shall sell, at the price and on the terms set forth below, the number of Class U Common Shares owned by such shareholder equal to the lesser of (i) the amount by which the aggregate number of issued and outstanding Class U Common Shares then exceeds the aggregate number of issued and outstanding Class NU Common Shares, and (ii) the number of Class U Common Shares owned by such shareholder. Such purchase shall be deemed effective, and such shares shall for all purposes be deemed to have been repurchased and retired, as of the time of conversion into class U Common Shares in exchange for a promissory note of the corporation having the characteristics described in subarticle (a) below and in a principal amount equal to the product of the Purchase Price (as defined in subarticle (d) below) and the number of Class U Common Shares to be repurchased from such holder. Such promissory note shall be deemed to have been tendered in payment for the Class U Common Shares on such deemed effective date. Upon purchase or tender of such purchase price (either in cash or by promissory note) with respect to Class U Common Shares owned by such shareholder, such person or entity shall no longer be entitled to any right, privilege, or benefit as a holder of such Class NU Common Shares. is amended to read as follows: If, after giving effect to such automatic conversion, there are any issued and outstanding class NU Common shares and the aggregate number of issued and outstanding Class U Common shares exceeds the aggregate number of issued and outstanding Class NU Common Shares, the corporation shall purchase, and such shareholder whose Class NU common Shares were so converted shall sell, at the price and on the terms set forth below, the number of Class U Common Shares owned by such shareholder equal to the lesser of (i) the amount by which the aggregate number of issued and outstanding class U Common Shares then exceeds the aggregate number of issued and outstanding Class NU Common Shares, and (ii) the number of Class U Common Shares owned by such shareholder. Such purchase shall be deemed effective, and such shares shall for all purposes be deemed to have been repurchased and retired, as of the time of conversion into Class U Common Shares in exchange for a promissory note of the corporation having the characteristics described in subarticle (a) below and in a principal amount equal to the product of the Purchase Price (as defined in subarticle (d) below) and the number of Class U Common Shares to be repurchased from such holder. Such promissory note shall be deemed to have been tendered in payment for the Class U Common Shares on such deemed effective date. Upon purchase or tender of such purchase price with respect to Class U Common Shares owned by such shareholder, such person or entity shall no longer be entitled to any right, privilege, or benefit as a holder of such Class U Common Shares. Subarticle (d) of ARTICLE SEVENTH is amended to read as follows: The purchase price per share for Common Shares to be purchased pursuant to the provisions of subarticle (c) above (the "Purchase Price") shall be equal to the greater of (i) $1.00 and (ii) the Book Value Per Share. If the aggregate number of issued and outstanding Class NU Common Shares equals or exceeds the aggregate number of issued and outstanding Class U Common Shares or if there are no issued and outstanding Class NU Common Shares, the Book Value Per Share of each Common Share shall be equal to the Corporation's Book Value divided by the number of issued and outstanding Common Shares as of the date the Corporation's Book Value is determined. If there are any issued and outstanding Class NU Common Shares and the aggregate number of issued and outstanding Class NU Common Shares is less than the aggregate number of issued and outstanding Class U Common Shares, (i) the Book Value Per Share of each Class NU Common Share shall be equal to the amount obtained by dividing fifty percent (50%) of the Corporation's Book Value by the number of issued and outstanding Class NU Common Shares as of the date the Corporation's Book Value is determined, and (ii) the Book Value Per Share of each Class U Common Share shall be equal to the amount obtained by dividing fifty percent (50%) of the Corporation's Book Value by the number of issued and outstanding class U Common Shares as of the date the Corporation's Book Value is determined. If the Corporation's Book Value can not be equally divided into two portions, one for the class U Common Shares and one for the Class NU Common Shares, the larger fractional portion shall be allocated to the Class NU Common Shares. The Corporation's Book Value shall mean the excess of the corporation's total assets over total liabilities as determined from its books of account at the close of business on the last day of the calendar month preceding the date of the event causing purchase and sale under this Article Seventh. The Corporation's Book Value shall be taken from the corporation's books of account and shall be determined in accordance with generally accepted accounting principles applied on a basis consistent with those previously applied by the corporation in preparing a balance sheet as of any date that is not the end of the corporation's fiscal year, all normal year-end accruals and deferrals (including depreciation and income taxes) shall be made on a prorated basis. The independent public accountant regularly engaged by the corporation shall make all computations under this Article Seventh and shall deliver to the corporation and the holder whose shares are to be repurchased a letter setting forth the Purchase Price and the method of computing such Purchase Price. ARTICLE TWELFTH is amended to read as follows: The following corporate actions require the approval of two thirds (2/3) of the total number of votes entitled to be cast by the Common Shares: (i) the amendment of Articles Second, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth or Thirteenth of these Articles of Incorporation, and (ii) the sale, lease, conveyance, exchange, transfer or other disposition of all or substantially all of the assets of the corporation. 3. No directors were named in the original Articles of Incorporation and none have been elected. 4. No shares have been issued. I further declare under penalty of perjury under the laws of the State of California that the matters set forth in this Certificate are true and correct of my own knowledge. DATE: July 1 , 1991
	/s/ Alan M. Albright Alan M. Albright Incorporator

ARTICLES OF INCORPORATION OF KRAMER JUNCTION COMPANY
ARTICLE FIRST
The name of this corporation is Kramer Junction Company.
ARTICLE SECOND
(a) The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of profession permitted to be incorporated by the California Corporation Code. (b) Notwithstanding the provisions of subarticle (a) above, the unanimous affirmative vote of the board of directors of the corporation shall be required to authorize the corporation to engage in any business other than (i) the ownership of general and/or limited partnership interests in the Solar Partnerships (as defined in Article Seventh below), (ii) acting as managing general partner of the Solar Partnerships, (iii) providing management, operation and/or maintenance services to the Solar Partnerships and (iv) other activities which are incidental to, or in furtherance of, the activities set forth in clauses (i) through (iii).
ARTICLE THIRD
The name of this corporation's initial agent for service of process is CT Corporation System.
ARTICLE FOURTH
The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law.
ARTICLE FIFTH
The corporation is authorized to indemnify the directors and officers of the corporation to the fullest extent permissible under California law.
ARTICLE SIX
This corporation is authorized to issue two classes of shares which shall be designated "Class U Common Shares" and "Class NU Common Shares," respectively. The total number of such shares shall be 500,000, consisting of 250,000 Class U Common Shares and 250,000 Class NU Common Shares. The Class U Common Shares and the Class NU Common Shares are referred to collectively in these Articles of Incorporation as the "Common Shares."
ARTICLE SEVENTH
(a) Common Shares may only be issued or transferred to a person or entity who is a Class B Limited Partner in one or more of the following California limited partnerships (collectively, the "Solar Partnerships"): (i) Luz Solar Partners Ltd., III, a California Limited Partnership, (ii) Luz Solar Partners Ltd., IV, a California Limited Partnership, (iii) Luz Solar Partners Ltd., V, a California Limited Partnership, (iv) Luz Solar Partners Ltd., VI, a California Limited Partnership, and (v) Luz Solar Partners Ltd., VII, a California Limited Partnership. (b) In addition to the restrictions set forth in (a) above, Class NU Common Shares may only be issued to, held by or transferred to a person or entity who is not a Utility. As used in these Articles of Incorporation, the term "Utility" shall mean a person or entity which is any one or more of the following: (i) an electric utility, (ii) an electric utility holding company, (iii) a wholly or partially owned subsidiary of either an electric utility or electric utility holding company, or (iv) any other person or entity which under regulations adopted pursuant to the Public Utility Regulatory Policies Act of 1978 ("PURPA") is deemed to be primarily engaged in the generation or sale of electric power (other than electric power solely from cogeneration facilities or small power production facilities). All terms used in the immediately preceding sentence which are defined in PURPA or the regulations adopted thereunder shall have the meanings given to such terms in PURPA or such regulations. (c) If any holder of Class NU Common shares shall fail or cease to maintain the qualifications set forth in subarticle (b) above, or upon any involuntary transfer of Class NU Common Shares to a person or entity not having such qualifications, each and every Class NU Common Share held by such person or entity shall automatically and without further action on the part of -such holder be converted, effective upon and concurrently with such failure or ceasing to maintain the required qualification or transfer to such non-qualifying person or entity, into one (1) Class U Common Share. Each holder of Class NU Common Shares shall immediately notify the corporation in writing at its principal executive offices if such holder fails or ceases to maintain the qualifications set forth in subarticle (b) above. Any exercise of rights as a holder of Class NU Common Shares shall constitute a representation by the holder thereof that such holder meets the qualifications set forth in subarticle (b) above. The holder of any Class NU Common Shares converted pursuant to this subarticle (c) shall deliver to the corporation during regular business hours, at such place as may be designated by the corporation, the certificate or certificates for the shares so converted, duly endorsed or assigned in blank or to the corporation. As promptly as practicable thereafter, the corporation shall issue and deliver to such holder, at the place designated by such holder, a certificate or certificates for the number of Class U Common Shares to be issued; provided, however, that if any of such Class U Common Shares are to be repurchased as provided below, the corporation shall issue and deliver a certificate or certificates for the number, if any, of Class U Common Shares not being repurchased together with the corporation's promissory note in payment for the repurchased shares. Regardless of when a holder delivers its certificates to the corporation, such holder shall be deemed for all purposes (i) to have become a shareholder of record of Class U Common Shares upon the automatic conversion of the Class NU Common Shares, and (ii) to cease to have been a shareholder of record of, or to have any rights (other than the right to receive the Class U Common Shares into which such shares were converted and any associated repurchase price) as a holder of, Class NU Common Shares upon the automatic conversion of the Class NU Common Shares. If, after giving effect to such automatic conversion, there are any issued and outstanding Class NU Common Shares and the aggregate number of issued and outstanding Class U Common Shares exceeds the aggregate number of issued and outstanding Class NU Common Shares, the corporation shall purchase, and such shareholder shall sell, at the price and on the terms set forth below, the number of Class U Common Shares owned by such shareholder equal to the lesser of (i) the amount by which the aggregate number of issued and outstanding Class U Common Shares then exceeds the aggregate number of issued and outstanding Class NU Common Shares, and (ii) the number of Class U Common Shares owned by such shareholder. Such purchase shall be deemed effective, and such shares shall for all purposes be deemed to have been repurchased and retired, as of the time of conversion into Class U Common Shares in exchange for a promissory note of the corporation having the characteristics described in subarticle (e) below and in a principal amount equal to the product of the Purchase Price (as defined in subarticle (d) below) and the number of Class U Common Shares to be repurchased from such holder. Such promissory note shall be deemed to have been tendered in payment for the Class U Common Shares on such deemed effective date. Upon purchase or tender of such purchase price (either in cash or by promissory note) with respect to Class U Common Shares owned by such shareholder, such person or entity shall no longer be entitled to any right, privilege, or benefit as a holder of such Class NU Common Shares. (d) The purchase price per share for Common Shares to be purchased pursuant to the provisions of subarticle (c) above (the "Purchase Price") shall be equal to the greater of (i) $1.00 and (ii) the Book Value Per Share. If the aggregate number of issued and outstanding Class NU Common Shares equals or exceeds the aggregate number of issued and outstanding Class U Common Shares or if there are no issued and outstanding Class NU Common Shares, the Book Value Per Share of each Common Share shall be equal to the Corporation's Book Value divided by the number of issued and outstanding Common Shares as of the date the Corporation's Book Value is determined. If there are any issued and outstanding Class NU Common Shares and the aggregate number of issued and outstanding Class NU Common Shares is less than the aggregate number of issued and outstanding Class U Common shares, (i) the Book Value Per Share of each Class NU Common Share shall be equal to the amount obtained by dividing fifty percent (50%) of the Corporation's Book Value by the number of issued and outstanding Class NU Common Shares as of the date the Corporation's Book Value is determined, and (ii) the Book Value Per Share of each Class U Common Share shall be equal to the amount obtained by dividing fifty percent (50%) of the Corporation's Book Value by the number of issued and outstanding Class U Common Shares as of the date the Corporation's Book Value is determined. If the Corporation's Book Value can not be equally divided into two portions, one for the Class U Common Shares and one for the Class NU Common Shares, the larger fractional portion shall be allocated to the Class NU Common Shares. The Corporation's Book Value shall mean the difference between the corporation's total assets and total liabilities as determined from the books of account at the close of business on the last day of the calendar month preceding the date of the event causing purchase and sale under this Article Eighth. The Corporation's Book Value of the corporation shall be taken from the books of account and shall be determined in accordance with generally accepted accounting principles applied on a basis consistent with those previously applied by the corporation. In preparing a balance sheet as of any date that is not the end of the corporation's fiscal year, all normal year-end accruals and deferrals (including depreciation and income taxes) shall be made on a prorated basis. The independent public accountant regularly engaged by the corporation shall make all computations under this Article Eighth and shall deliver to the corporation and the holder whose shares are to be repurchased a letter setting forth the Purchase Price and stating that the computed Purchase Price is in accordance with this Article Seventh. (e) The Purchase Price for any Class U common Shares to be purchased by the corporation pursuant to the provisions of subarticle (c) above shall be paid by promissory note of the corporation which shall (i) provide for payment of principal in ten (10) equal annual installments, provided that payments of principal thereunder shall be payable only to the extent such payments may lawfully be made by the corporation under Chapter 5 of the California Corporations Code or any similar successor provision of California law, (ii) bear interest at the rate of 10% per annum on the unpaid principal balance with payments of interest to be payable annually together with payments of principal, provided that payments of interest thereunder shall be payable only to the extent such payments may lawfully be made by the corporation under Chapter 5 of the California Corporations code or any similar successor provision of California law, (iii) allow full privilege of prepayment of all or any part of the principal at any time without penalty or bonus with any prepaid amount to be applied against the installments thereafter falling due in inverse order of their maturity or against all ' of the remaining installments equally, at the option of the corporation, (iv) not be a "security" as defined in Section 8102(1) of the California Commercial Code, and (v) state that such note was issued for the purchase of shares of the corporation.
ARTICLE EIGHTH
Except where the Class U Common Shares and the Class NU Common Shares are required by law to vote separately by class, the Class U Common Shares and the Class NU Common shares shall vote together on all matters. The respective voting power of the Class U Common Shares and the Class NU Common Shares shall be as follows: (a) Each of the class NU Common Shares shall have one vote per share on all matters. (b) On all matters where the Class U Common Shares and Class NU Common Shares are required by law to vote separately by class or if there are no issued and outstanding Class NU Common Shares, each of the Class U Common Shares shall have one vote per share. (c) If there are any issued and outstanding Class NU Common Shares, on all matters where the Class U Common Shares and the Class NU Common Shares vote together, each of the Class U Common Shares shall have a number of votes per share equal to the lesser of either (i) one (1) or (ii) the number obtained by dividing the aggregate number of issued and outstanding Class NU Common Shares by the aggregate number of issued and outstanding Class U Common Shares. The calculation required by clause (ii) of the preceding sentence shall be carried to the second decimal place and rounded down.
ARTICLE NINTH
Upon the voluntary or involuntary liquidation, winding up or dissolution of the corporation, the assets available for distribution to shareholders shall be distributed as follows: (a) If the aggregate number of issued and outstanding Class NU Common Shares equals or exceeds the aggregate number of issued and outstanding Class U Common Shares or if there are no issued and outstanding Class NU Common Shares, such assets available for distribution shall be distributed in equal amounts per share to all holders of Common Shares. (b) If there are any issued and outstanding Class NU Common Shares and the aggregate number of issued and outstanding Class NU Common Shares is less than. the aggregate number of issued and outstanding Class U Common Shares, (i) one half (1/2) of such assets available for distribution shall be distributed in equal amounts per share to all holders of Class U Common Shares, and (ii) one half (1/2) of such assets available for distribution shall be distributed in equal amounts per share to all holders of Class NU Common Shares. If the assets available for distribution can not be equally divided into two portions, one for the Class U Common Shares and one for the Class KU Common Shares, the larger fractional portion shall be distributed to the Class NU Common Shares.
ARTICLE TENTH
The Common Shares shall have the following rights and preferences with respect to dividends: (a) If the aggregate number of issued and outstanding Class NU Common Shares equals or exceeds the aggregate number of issued and outstanding Class U Common Shares or if there are no issued and outstanding Class RU Common Shares and the board of directors shall elect to make a distribution of dividends, such dividends shall be made out of funds of the corporation legally available for the declaration of dividends, if, as and when declared by the board of directors, to all Common Shares in an equal amount per share. (b) If there are any issued and outstanding Class NU Common Shares and the aggregate number of issued and outstanding Class NU Common Shares is less than the aggregate number of issued and outstanding Class U Common Shares, and the board of directors shall elect to make a distribution of dividends, such dividends shall be made out of funds of the corporation legally available for the declaration of dividends, if, as and when declared by the board of directors, to all Common Shares and the amount of any such dividend on each Class U Common Share shall be equal to the product of (i) the dividend on each Class NU Common Share and (ii) a fraction the numerator of which is the aggregate number of issued and outstanding Class NU Common Shares and the denominator of which is the aggregate number of issued and outstanding class U common Shares. The calculation of dividends to be paid on Class U Common Shares-shall be rounded down to the nearest cent.
ARTICLE ELEVENTH
No Common Shares may be mortgaged, pledged, subjected to any security interest or otherwise hypothecated.
ARTICLE TWELFTH
The following corporate actions require the approval of two thirds (2/3) of the total number of votes entitled to be cast by the Common Shares: (i) the amendment of Articles Second, Seventh, Eighth, Ninth, Tenth, Twelfth or Thirteenth of these Articles of Incorporation, and (ii) the sale, lease, conveyance, exchange, transfer or other disposition of all or substantially all of the assets of the corporation.
ARTICLE THIRTEENTH
(a) Subject to subarticle (b) below, each Class, U Common Share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share into one (1) fully paid Class NU Common Share. (b) It shall be a condition of the conversion of any Class U Common Shares into Class NU Common Shares that the holder thereof shall (i) surrender the certificate or certificates therefor, duly endorsed or assigned in blank or to the corporation at the principal executive office of the corporation, (ii) deliver to the corporation at its principal executive office a written notice of its election to so convert, and (iii) demonstrate to the satisfaction of the corporation through the presentation of such evidence as the corporation may reasonably request that such holder meets the qualifications to be a holder of Class NU Common Shares. Upon satisfaction of such conditions, the corporation shall issue and deliver a certificate or certificates for the number of Class NU Common Shares to which such holder is entitled. IN WITNESS WHEREOF, the undersigned incorporator has executed the foregoing Articles of Incorporation on May 29, 1991.
	/s/ Alan M. Albright Alan M. Albright
I hereby declare that I am the person who executed the foregoing Articles of Incorporation, which execution is my act and deed.
	/s/ Alan M. Albright Alan M. Albright

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF LINPRO HARMANS LAND LIMITED PARTNERSHIP Dated as of Dec 28 , 1990
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF LINPRO HARMANS LAND LIMITED PARTNERSHIP Dated as of Dec 28 ,1990 TABLE OF CONTENTS
Section						Page
I.	FORMATION AND GENERAL						2
II.	TERM						3
III.	PURPOSES						4
IV.	OFFICES AND REGISTERED AGENT						5
V.	CAPITAL CONTRIBUTIONS						5
VI.	CONTROL AND MANAGEMENT						15
VII.	ALLOCATIONS OF PROFITS AND LOSSES						25
VIII.	DISTRIBUTIONS						28
IX.	PARTNERSHIP EXPENSES, RESERVES AND FEES						31
X.	ANNUAL BUDGETS						33
XI.	DEFICIT CONTRIBUTIONS						34
XII.	ASSIGNMENT OF INTERESTS OF PARTNERS						35
XIII.	DEADLOCK; EVENTS OF DEFAULT						40
XIV.	DISOLUTION AND TERMINATION						51
XV.	ACCOUNTING						52
XVI.	REPORTS AND STATEMENTS						53
XVII.	BANK ACCOUNTS						54
XVIII.	NOTICES						55
XIX.	DEFINED TERMS						56
XX.	MISCELLANEOUS						67
	Exhibit A- Development Property Description
	Exhibit B- C&P Property Description
	Exhibit C- Property Description
	Exhibit D- Partner Re Representatives and Key Persons
	Exhibit E- Insurance Coverage
	Exhibit F- Reimbursable Pre-formation Costs
	Exhibit G- Initial Annual Budget
	Exhibit H- Partnership Liabilities


AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF LINPRO, HARMANS LAND LIMITED PARTNERSHIP Dated as of December 28 , 1990
This Amended and Restated Limited Partnership Agreement (the Agreement) is made and entered into effective as of the 28 ^TH day of December, 1990, by and between LINPRO HARMANS LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership(hereinafter sometimes referred to as Linpro ), and POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation (hereinafter sometimes referred to as PCI ), as the general partners hereof (Linpro and PCI being hereinafter sometimes referred to individually as a General Partner and collectively as the General Partners ); Eric Eichler, as the limited partner hereof (hereinafter sometimes referred to as the Limited Partner )(the Limited Partner and the General Partners being hereinafter sometimes referred to individually as a Partner and collectively as the Partners ) (the Limited Partner and Linpro being hereinafter sometimes referred to collectively as the Linpro Group ); and John A. Berry, Jay G. Cranmer, J. Patrick Armstrong, Peter P. DiLullo, John Chirtea, Kurt M. Eichler, Denise E.Wood, David J. Eichler, Linpro Maryland Admin Partners Limited Partnership and the Irrevocable Trust of Jay G. Cranmer, as the withdrawing partners hereof (the Withdrawing Partners).
W I T N E S S E T H :
WHEREAS, Linpro Harmans Land Limited Partnership, a Delaware limited partnership (the Partnership ), was formed pursuant to that certain Agreement and Certificate of Limited Partnership made and entered into as of the 1st day of June, 1988 (the Original Partnership Agreement ), and a Certificate of Limited Partnership of the Partnership (the Original Partnership Certificate ) which was filed in the Office of the Secretary of State of the State of Delaware (the Filing Office ) on July 5, 1988; and WHEREAS, the parties hereto desire to admit PCI as a general partner of the Partnership upon the terms and conditions of this Agreement; and WHEREAS, after admission of PCI to the Partnership as a general partner, the Withdrawing Partners have assigned and transferred all of, and Eric Eichler has assigned and transferred a portion of, their right, title and interest in and to the Partnership to Linpro, such interest to be continued as a general partner's interest; and WHEREAS, Linpro desires to be admitted to the Partnership as a general partner; and WHEREAS, Eric Eichler desires to convert his remaining interest in the Partnership to a limited partner's interest; and WHEREAS, the Partnership is presently in existence, as limited partnership pursuant to the Delaware Revised Limited Partnership Act (the Act); and WHEREAS, the parties hereto desire to enter into this agreement for the purpose of (a) first, admitting PCI into the Partnership as a general partner thereof; (b) second, converting the interest in the Partnership retained by Eric Eichler to a limited partner interest; (c) providing for the full and complete withdrawal of the Withdrawing Partners and the partial withdrawal of Eric Eichler; (d) admitting Linpro into the Partnership as a general partner thereof; (e) reallocating the interests in the Partnership among the General Partners and the Limited Partner; and (f) amending, restating and superseding in its entirety the Original Partnership Agreement as hereinafter set forth;
SECTION I Formation and General
1.1. Continuation of the Partnership. The parties hereto do hereby continue the Partnership as a Delaware limited partnership pursuant to the provisions of the Act for the limited purposes set forth herein. Except as expressly provided, herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. Promptly, after the execution and delivery of this Agreement, the Partners shall execute, acknowledge and/or swear to, as appropriate, and the Partnership shall file or record with the proper offices in the State of Delaware and each other jurisdiction and political subdivision in which the Partnership does business, such applications or other certificates or documents as are required or permitted by any applicable assumed or fictitious name statutes in effect in such jurisdiction or political subdivision. The Partners shall further execute, acknowledge and/or swear to, as appropriate, and the Partnership shall promptly file or record as aforesaid, such amendments or additional or other documents as may from time to time be required by such statutes or laws to permit the continued existence and operation of, the Partnership, including an amendment to the original Partnership Certificate. 1.2. Name . The name of the Partnership shall for all purposes continue to be LINPRO HARMANS LAND LIMITED PARTNERSHIP, and such name shall be used at all times in connection with the Partnership's business and affairs. 1.3. Admission of PCI . Effective as of the date of this Agreement, PCI is hereby admitted to the Partnership as a general partner, subject to the terms and provisions of this Agreement. 1.4. Admission of Linpro, and Withdrawal of Withdrawing Partners . From and after the effective date of this Agreement, the Withdrawing Partners hereby withdraw from the Partnership and Linpro is hereby admitted to the Partnership as a general partner, subject to the terms and provisions of this Agreement. 1.5. Conversion of Interest . From and after the effective date of this Agreement, the interest in the Partnership retained by Eric Eichler is hereby converted to the interest of a limited partner. 1.6. Defined Terms . Reference is hereby made to Section XIX of this Agreement for the definition of certain capitalized terms used herein.
SECTION II Term
The term of the Partnership shall continue until terminated as provided in Section XIV.
SECTION III Purposes
The Partnership was formed for the purpose of acquiring, owning, holding, constructing improvements thereon and otherwise developing the Development Property. Simultaneously with the execution of this Agreement, the Partnership has conveyed and assigned to Harmans Building Associates, a Delaware general partnership (Harmans Building) all of its right, title and interests in and to the C&P Property and the C&P Lease. Subject to the provisions of this Agreement, the purposes and business of the Partnership shall continue to be to (a) own, hold, develop, subdivide, manage, operate, lease, finance, mortgage, market, sell and otherwise deal with the Property; (b) obtain such governmental approvals as may be necessary from time to time and contract for and supervise all work necessary or appropriate for (i) the development of the Property, which work may include, but shall not be limited to, the installation of streets, roads, sidewalks, driveways, drainage systems, sewers, recreational and open spaces, rights-of-way, alleys, utilities, utility lines and facilities, rail lines and other site improvements and off-site improvements (all such site and off-site improvements and developments being herein sometimes referred to as the Site Improvements )and (ii) construction of buildings; (c) conduct such engineering, grading, soil investigations, testing and other site work necessary to, prepare the Property for construction of Site Improvements thereon; (d) contract for and supervise all work necessary or appropriate for the construction on the Property of Site Improvements;(e) own, hold, manage, operate, maintain, improve, finance, mortgage, lease, sell and otherwise deal with the Project, or any part thereof including entering into agreements with Partners, Related Entities or other third parties to perform services for the Partnership in connection with such foregoing purposes; (f) contribute or sell all or any portion of the Project to Related Entities or third parties, including Affiliates of any Partner, who may construct and develop improvements on the Property; and (g) conduct such other activities as may be necessary, advisable, convenient or appropriate to promote or conduct the business of the Partnership as set forth above, including, but not limited to, entering into other partnership agreements in the capacity of a general partner or a limited partner, becoming a member of a joint venture, participating in forms of Syndication for investment, owning stock in corporations and the incurring of indebtedness and the granting of liens and security interests on the real and personal property of the Partnership, it being agreed that each of the foregoing is an ordinary part of the Partnership's business, and such purposes and business of the Partnership described in clauses (a) through (g) shall not be extended by implication or otherwise unless Approved by the Partners.
SECTION IV Offices and Registered Agent
4.1. Principal Office. The principal office and place of business of the partnership shall be located at The Linpro Company, 1717 Elton Road, Suite 211, Silver Spring, Maryland 20903. The Managing Partner may from time to time change such principal office and place of business or may change or establish such additional offices or places of business in the State of Maryland. The Managing Partner shall promptly notify the other Partners of any such change or establishment of offices. 4.2. Registered Agent and Registered office . The name of the Partnership's initial registered agent for service of process in Delaware shall be The Linpro Company and the address of the initial registered agent and the address of the initial registered office of the Partnership in Delaware shall be The Linpro Company, Three Christina Center, 201 North Walnut Street, Suite 1001, Wilmington, Delaware 19801. As required by the Act, the Partnership shall at all times maintain in Delaware an office and an agent for service of process, as determined by the Managing Partner in accordance with the relevant provisions of the Act, as then in effect. The Managing Partner shall promptly notify the other Partners of any change in the registered agent or registered office.
SECTION V Capital Contributions
5.1. Initial Capital Contributions. (a) The Withdrawing Partners and the Limited Partner originally contributed One Hundred Dollars cash to the capital of the Partnership. Simultaneously with the execution of this Agreement, such original capital contribution and the capital accounts of the Withdrawing Partners and the Limited Partner shall be appropriately allocated to the Linpro Group in accordance with their respective interests therein. (b) Simultaneously with full execution of this Agreement, PCI shall contribute to the capital of the Partnership Two Hundred and Fifty Thousand Dollars ($250,000.00) in cash, which amount shall be used to prepay a portion of the current land loan from Bank of New England, N.A. (c) In addition to the capital contributions required of PCI by Section 5.1(b) hereof, PCI shall also contribute to the capital of the Partnership an additional aggregate amount of up to Two Hundred Thousand Dollars ($200,000.00) in cash on an as needed basis in accordance with the provisions set forth below in this Section 5.1(c) (the PCI Additional Capital Contribution ). If for any period beginning on or after the formation of the Partnership, the sum of the capital contributions, loan proceeds, reserves, proceeds from Interim Capital Transactions and Net Cash Flow of the Partnership is or is reasonably anticipated to be insufficient to meet and pay Partnership debts and obligations, including costs of acquiring and holding the Property and the costs of construction of the Site Improvements and other improvements approved by the General Partners, (the amount of such shortfall of Partnership funds being hereinafter referred to as the Development Deficit ), the Managing Partner shall give written notice to PCI of the total amount of such Development Deficit together with a detailed report showing the actual costs of the Project to the date of the notice and the projected additional costs of the Project and a statement showing all sources and uses of funds. Within thirty (30) days after delivery of such notice and the report and statement referred to above to PCI, PCI shall contribute the amount of such Development Deficit to the Partnership as an additional capital contribution up to the aggregate amount of $200,000. The Managing Partner hereby agrees to give promptly to PCI such additional information regarding such Development Deficit as may be reasonably requested. Such amounts shall be contributed in immediately available funds, unconditionally and without right of set-off. (d) If PCI should fail to make any of its contributions to the capital of the Partnership pursuant to Section 5.1(b) hereof on or before the date specified therein, PCI shall, without notice to or opportunity of PCI to cure, be in default and the Partnership and Linpro may, in addition to and without prejudice any other rights they may have at law or in equity, including a suit for collection, as a remedy for such default, purchase all (but not less than all) of PCI's Interest in the Partnership for an amount equal to fifty percent (50%) of the total capital contributions previously made by PCI to the Partnership as of the date of such purchase, payable in cash; provided, however, that election of the remedy provided in this section 5.1(d) shall automatically and completely waive and terminate all other rights the Partnership and Linpro may have at law or in equity, including any suit for collection, with respect to the failure of PCI to make any of its contribution pursuant to Section 5.1 (c) hereof. Notwithstanding the provisions of Section XII hereof, the right to purchase PCI's Interest in the Partnership under this Section 5.1(d) may be assigned by Linpro and the Partnership to any other Person. 5.2 . Additional Capital Contributions . (a) Subject to Section 5.2(b), any additional funds required by the Partnership to meet its cash requirements shall, to the extent possible, be provided by Partnership borrowings from third parties, upon such terms and conditions as Approved by the General Partners. (b) Subject to Section 5.2(b) hereof, if for any period beginning on or after the date PCI shall have fully funded its Additional Capital Contribution, the sun of the capital contributions, loan proceeds, reserves, proceeds from Interim Capital Transactions and Net Cash Flow of the Partnership is or is reasonably anticipated to be insufficient to meet and pay Partnership debts and obligations as they become, due and payable (the amount of such shortfall of. Partnership funds being hereinafter referred to as the Deficit ), and the Partnership is unable to borrow such funds upon terms satisfactory to the General Partners, the Managing Partner shall give written notice to the other General Partner of the total amount of such Deficit (provided, however, that the other General Partner may give the notice described in this Section 5.2(b) if the Managing Partner fails to do so and, in the reasonable judgment of the other General Partner, there is or will soon be a Deficit). The Managing Partner hereby agrees to give the other General Partner reports and statements similar to those described in Section 5.1(c) hereof and such other information regarding such Deficit as may be reasonably requested. Within thirty (30) days after delivery of such notice, PCI and Linpro shall each contribute their pro rata share of such amount (based on their relative Contribution Interests) as an additional capital contribution to the Partnership. (c) All additional capital contributions required to be made pursuant to Section 5.2(b) shall be paid directly into an escrow account with a bank located in Maryland designated by the Managing Partner pursuant to an escrow agreement acceptable to the Managing Partner. The funds deposited in such account shall be released to the Partnership only (i) at the time both General Partners have made their required additional capital contribution, or (ii) if one General Partner fails to timely make its required additional capital contribution in whole or in part, at the time the other General Partner elects to undertake and performs the actions described in Section 5.2(d) (i) or (ii). (d) If any General Partner fails to make any of its additional contributions to the capital of the Partnership pursuant to Section 5.2(b) on or before the date specified therein, and such Partner fails to cure such failure within ten (10) days after written notice thereof from the other General Partner, such Partner that has failed to make its contribution ( Defaulting Partner ) shall be in default as of the date such contribution was due (and such date of default shall be sometimes herein referred to as the Date of Default ). Upon the occurrence of any such default, the non-defaulting General Partner ( Nondefaulting Partner ) may, as its and the Partnership's sole and exclusive remedy, elect any one (but not more than one) of the following remedies: (i) contribute to the Partnership the amount of the additional capital contribution required of the Defaulting Partner but not contributed by such Defaulting Partner and elect (by written notice thereof to the Defaulting Partner) to treat the entire amount of the Nondefaulting Partner's contribution (including the amount that will be released to the Partnership from the escrow account described in Section 5.2(d) hereof upon such election) as a Deficit Contribution. (ii) contribute to the Partnership as an additional capital contribution of the Nondefaulting Partner the amount of the additional contribution required of the Defaulting Partner but not contributed by such Defaulting Partner and elect (by written notice thereof to the Defaulting Partner) to adjust the Partners' Contribution Interest and Percentage Interest in the Partnership as set forth below. In such event, the Contribution Interest and Percentage Interest of the Defaulting Partner shall, in the case of additional capital contributions to fund Site Improvements, engineering costs or any other expenses related to the site development of the Property (Development Costs ), be reduced at the rate of one percentage point for every ten thousand dollars ($10,000), and in the case of additional capital contributions required to fund costs of the Partnership other than Development Costs, be reduced at a rate of one (1) percentage point for every fifteen thousand dollars ($15,000), that the Defaulting Partner failed to contribute under Section 5.2(b), and the Contribution Interest and Percentage Interest in the Partnership of the Nondefaulting Partner (or its assignee or designee, as the case may be) shall be increased by the same number of percentage points that the Contribution Interest and Percentage Interest in the Partnership of the Defaulting Partner is decreased pursuant to the, terms and provisions of this Section 5.2(d)(ii). Solely for purposes of calculating the dilution of a Defaulting Partner's contribution Interest and Percentage interest under this Section 5.2(d), the amount of capital that the Defaulting Partner was required to contribute under Section 5.2(b) shall be determined by assuming that the Defaulting Partner's Contribution Interest is always fifty percent (50%), For example, if contributions of Two Hundred Thousand Dollars ($200,000) were required under Section 5.2(b) for Development Costs, the Defaulting Partner was required and failed to contribute One Hundred Thousand Dollars ($100,000)and the Nondefaulting Partner elected to dilute the Defaulting Partner in accordance with this Section 5.2(d)(ii), the Defaulting Partner's Contribution Interest would be diluted by ten (10) percentage points, from fifty percent (50%) to forty percent (40%) and the Defaulting Partner's Percentage Interest would be diluted by ten (10) percentage points, from forty-nine and 50/100s percent (49.5%) to thirty-nine and 50/100s percent (39.5%) if, subsequently, further additional capital contributions of $300,000), were required under Section 5.2(b) for other than Development Costs and the Defaulting Partner failed to contribute its pro rata. Share ($120,000, or 40% of $300,000), and the Nondefaulting Partner again elected to dilute the Defaulting Partner in accordance with this Section 5.2(d)(ii), the Defaulting Partner's Contribution Interest would be diluted by ten (10) percentage points, from forty percent (40%) to thirty percent (30%) and the Defaulting Partner's Percentage Interest would be diluted by ten (10) percentage points, from thirty-nine and 50/100s percents (39.5%) to twenty-nine and 50/100s percent (29.5%), as if it has been required to contribute $150, 000, or fifty percent (50%) of $300,000. (e) Each Partner acknowledges and agrees that it would not be entering into this Agreement were it not for (i) the other Partner agreeing to make the capital contributions required by Section 5.1(c) and, this Section 5.2 and (ii) the remedy provisions set forth in this Agreement, and in particular Sections 5. 1 (d) and 5.2 (d). Each Partner further acknowledges and agrees that (i) in the event that any Partner fails to satisfy its obligations pursuant to Sections 5.1(c) .and 5.2(b) of this Agreement, the other Partners and the Partnership may have no adequate remedy at law for such breach, (ii) that any reduction in the Defaulting Partner's Partnership interest or right to distributions as a result of the exercise of one of the remedies provided in Sections 5.1(d) and 5.2(d) hereof is intended as liquidated damages and not as a penalty by reason of the fact that the damages resulting from a breach hereof would be impossible to ascertain at the time hereof or of such breach, and (iii) the remedies set forth in sections 5.1(d) and 5.2(d) are fair, just and equitable in all respects. Each General Partner hereby irrevocably constitutes and appoints the other General Partner (and each of its general partners or officers, as the case may be) as its true and lawful attorney-in-fact, in its name, place and stead, to make, execute, consent to, swear to, acknowledge, deliver, record and file such assignments, other documents which absolute discretion of conveyances , agreements, instruments or may be necessary, in the sole and the other General Partner, to confirm and render fully effective the remedies set forth in sections 5.1,(d) and 5.2(d) or any other remedies set forth in this Agreement. It is expressly understood, intended and agreed by each of the Partners for itself, its administrators, legal representatives, successors and assigns, that the grant of this power of attorney to the other General Partner and to the general partners or officers of the other General Partner pursuant to this Section 5.,2(e) is irrevocable and is coupled with an interest by reason of the facts, among others, that the other General Partner will be relying on its power to act as contemplated by this provision, the other General Partner would not have entered into this Agreement were it not for the powers granted to it by these provisions and the other General Partner has rights in the Partnership property which the power is needed to protect. The grant of this power of attorney shall survive the subsequent death, legal incompetency, disability, incapacity, bankruptcy, retirement or withdrawal of any Partner or the partners. or other beneficial owners of any Partner or the assignment of its or their interests in the Partnership or in such Partner, as the case may be. 5.3. Book-Up . Simultaneously with the execution and delivery of this Agreement, the capital account of Linpro shall be increased to an amount such that, when added to the amount of any gain or cancellation of debt income allocated to Linpro pursuant to the first sentence of Section 7.3 (f ) hereof, Linpro would have a positive capital account balance of Five Hundred and Fifty Thousand Dollars ($550,000.00), which the parties hereto acknowledge and agree is equal to the agreed fair market value of the Property net of two hundred and fifty thousand dollars ($250,000.00) of indebtedness owed by the Partnership to the Bank of New England, N. A., which shall be paid by PCI' s contribution pursuant to Section 5.1(b) hereof. 5.4. Capital Accounts. The capital accounts of the Partners shall be determined and maintained throughout the full term of this Agreement in accordance with the capital accounting rules of section 1.704-1(b) (2) (iv) of the Section 704(b) Regulations (relating to maintenance of capital accounts). Each Partner shall have a capital account, which shall be credited ( increased ) by: (a) the amount of its cash capital contributions to the Partnership and the agreed fair market value of property other than cash contributed to the Partnership by such Partner (net of liabilities secured by such contributed property that the Partnership is considered to have assumed or taken subject to for purposes of Section 752 of the Code); (b) the amount of Profits and items thereof allocated to it pursuant to Section VII hereof; and (c) any other increase required to be made to the capital account of the Partner by the Section 704(b) Regulations, to the extent not otherwise provided for herein; and shall be debited ( decreased ) by: d) the amount of Losses and items thereof allocated to such Partner pursuant to Section VII hereof; (e) all amounts distributed or deemed distributed to it pursuant to Section VII and the fair market value (as determined for purposes of Section 5.10) of property distributed to such Partner (net of liabilities securing such distributed property that such Partner is considered to have assumed or taken subject to under Section 752 of the Code); and (f) any other reductions in the capital account of the Partner required by the Section 704 (b) Regulations, to the extent not otherwise provided for herein. 5.5. Interest on and Return of Capital . Except as specifically provided herein, no interest shall be paid on any capital contribution to the Partnership or capital account of a Partner. No Partner shall be liable for the return of the capital contributions or the capital account (or any portion thereof) of any other Partner, it being expressly understood and agreed that such return shall be made solely from the assets of the Partnership. No Partner shall be entitled to demand and receive property other than cash in return for its capital contributions to the Partnership, its capital account or its Partnership Interest. 5.6. Loans by a Partner; Withdrawal of Capital . Loans by any Partner to the Partnership shall not be considered contributions to the capital of the Partnership and shall not increase the capital account of the lending Partner, and repayment of such loan shall not be deemed withdrawals from the capital of the Partnership. A Partner shall not be entitled to withdraw any part of its capital account or to receive any distribution from the Partnership, except as specifically provided in this Agreement, and further, without the consent of all of the Partners, no Partner shall be entitled to make any additional capital contributions to the Partnership other than as provided in Section 5.2 hereof or as otherwise provided herein. 5.7. Negative Capital Accounts . A negative, or deficit balance in any Partner's capital account shall not be deemed to be an asset of the Partnership, and no Partner with a negative or deficit capital account balance shall have any obligation to the Partnership, to any other Partner or to any third party or creditor to restore said negative or deficit balance(s). 5.8. Determination of Capital Accounts . Whenever it is necessary to determine the balance in the capital account of any Partner for purposes of this Agreement, such balance shall be determined after first giving effect to all allocations, for transactions effected prior to the time as of which such determination is made, of Profits, Losses and items thereof for the current year, and second, after giving effect to all distributions or deemed distributions for such year in respect of transactions effected prior to the date as of which such determination is to be made, and third, after giving effect to all allocations of Profits, Losses and items thereof for the transaction in question (that is, prior to giving effect to distributions or deemed distributions as a result of such transaction). Any Partner, including any additional or substitute Partner, who shall acquire or receive any Partnership Interest or whose Partnership Interest shall be increased by means of a transfer to him of all or part of the Partnership Interest of another Partner, shall have a capital account which reflects such transfer; provided, however, that Section 5 .2(d)(ii) shall not be construed to effect any transfer of the capital account balance of the Defaulting Partner to the Nondefaulting Partner as of the date of exercise of such remedy, but shall affect the Partner's rights to Partnership Profits and Losses realized and distributions with respect-to periods from and after such date. 5.9. Waiver of Right of-Partition and Dissolution . Having been previously advised that each may have a right to bring an action for partition, each of the Partners does hereby agree to and does hereby irrevocably waive for the duration of this Agreement any right or power any such Partner might have (i) to cause the Partnership or any of its assets to be partitioned, (ii) to cause the appointment of a receiver for the assets of the Partnership, and (iii) to compel any sale of all or any portion of the assets of the Partnership pursuant to any applicable law or laws, or to file a complaint or to institute any proceeding at law or inequity to cause the termination or dissolution of the Partnership, except to enforce, compel or implement or effect any dissolution, termination or liquidation of the Partnership occurring or required to occur pursuant to Articles XIII and XIV hereof. Each of the Partners hereby acknowledges and agrees that such Partner has been induced to enter into this Agreement in reliance upon the mutual waivers set forth in this Section 5.9, and that without such waivers, no Partner would have entered into this Agreement. No Partner has any interest in specific Partnership property, and the interest of all Partners in the Partnership are, for all purposes, personal property. 5.10. Accounting for Distributions in Kind . In the event that the Partnership distributes to a Partner property other than cash, solely for purposes of computing the capital accounts of the respective Partners, such distribution shall be treated as a sale by the Partnership of the property so distributed for an amount equal to the fair market value of such property (with appropriate adjustments for any liability which is assumed or taken subject to by the distributee Partner), and the deemed Profits or Losses, as the case may be, shall be allocated in accordance with Section VII hereof. The fair market values used for purposes of this Section 5.10 in determining the amount of deemed gain or deemed loss shall be determinative of the values of such assets for purposes of determining the amounts of distributions to Partners under Section VIII. Such fair market value shall be determined in the following manner, should the Partners fail to agree on the determination of fair market value within 30 days after such property is proposed to be distributed. Linpro and PCI shall each select an appraiser who is a member of the Appraisal Institute (or its successors) who has at least five (5) years experience as a real estate appraiser in appraising properties such as the Project and is familiar with the real estate market in which the Project is located. If either party fails to name such an appraiser within 30 days after notice by the other party that the other party has selected an appraiser (such notice to contain the name of such appraiser), the other party may select the second appraiser. The two appraisers so selected shall proceed promptly to determine the fair market value of the property in question, taking into consideration any outstanding indebtedness, liabilities, liens and obligations relating to such property, including the obligations of the Partnership under the C&P Lease. The determination of, such fair market value by the two appraisers so selected shall be final and binding upon all parties; and if the two appraisers so selected are unable to agree upon a fair market value within 30 days after the appointment of the second appraiser, said two appraisers shall select a third appraiser (who shall also be a member of the Appraisal Institute, or its successors) who. has at least five (5) years' experience as a real estate appraiser in appraising properties such as the Project and is familiar with the real estate market in which the Project is located, and the determination of the third appraiser as to fair market value shall be conclusive as to such fair market value and shall be final and binding upon all parties. In the event the two appraisers fail to agree on the selection of the third appraiser within ten (10) days after the end of the 30-day period set forth in the immediately preceding sentence, the third appraiser shall be designated by the President of the Washington, D.C. Board of Realtors, whose determination shall be binding on the parties. The Partnership shall pay the fees and expenses of the appraisers selected pursuant to the provisions of this Section 5.10. 5.11 . Limited Partner . The Limited Partner shall not be liable for any of the debts of the Partnership and the Limited Partner shall not be required to contribute any capital to the Partnership other than contributions previously made by the Limited Partner; provided however, to the extent required by law, the Limited Partner shall remain liable for Partnership debts and obligations incurred or arising prior to the date hereof while he was a general partner.
SECTION VI Control and Management
6.1. Management Except with respect to those actions or decisions that may be taken or made by a single General Partner as expressly provided in this Agreement, the overall management and control of the business and affairs of the Partnership shall be vested in the General Partners jointly, and all actions or decisions required by this Agreement to be taken or made by the General Partners jointly shall be taken or made only with the Approval of the General Partners through action by the Representatives at Partnership meetings in accordance with Section 6.3 hereof. The Managing Partner shall have the authority and responsibility of implementing and carrying out the tasks, decisions, or plans Approved by the General Partners and the day-to-day management of the Partnership in the manner Approved by the General Partners. All approvals and consents required herein shall be required prospectively, in advance of the action or decision to be taken or made. However, in the event any approval or consent is given retroactively, it shall have full force and effect under this Agreement to the same extent as if given prospectively. Any one of the officers or general partners of the Managing Partner shall have full power and authority to execute all documents and take all other actions as Managing Partner and thereby bind the Partnership and the Partners with respect thereto. The Partners agree to manage and control the affairs of, the Partnership and to conduct the operations contemplated under this Agreement in accordance with and subject to the terms of this Agreement and in the same manner as is customary and usual in the development, construction, operation and maintenance of projects of comparable quality in the metropolitan area of the Project. 6.2 . Managing Partner Authority . Notwithstanding the foregoing provisions of Section 6.1 to the contrary, the Managing Partner shall be authorized and shall have the right and power to carry out any of the foregoing acts, without any further Approval of the General Partners: (a) pay the fees, commissions and expense reimbursements described in Sections 9.1 and 9.3; (b) incurring and paying obligations of the Partnership to the extent such obligations or expenditures are set forth in reasonable detail in a Budget that has been previously Approved by the General, Partners (including those set forth in Exhibit G ) or to the extent such obligation or expenditure is, due to an emergency and the Managing Partner in good faith believe such expenditure is necessary in order to preserve or protect the assets of the Partnership or to prevent iminent bodily harm to persons on the Property or affected by activities thereon; (c) convey the C&P Property and the C&P Lease to Harmans Building; (d) enter into any contract on behalf of the Partnership which is set forth in reasonable detail or contemplated in a Budget that has been previously Approved by the General Partners; (e) making those capital improvements specifically provided for in reasonable detail or contemplated, in a Budget previously Approved by the General Partners; and (f) taking any other action or making any other decision, which under the specific terms of this Agreement may be taken or made by the Managing Partner without the further consent or authorization of the other Partners or which has been previously Approved by the General Partners. Notwithstanding the foregoing provisions of this Section VI to the contrary, any actions of the Partnership to enforce the obligations of PCI pursuant to Section 5.1 or 5.2 hereof, including the election to pursue any remedy provided for therein shall not require any approval or consent of any other Partner. Notwithstanding the provisions of this Section VI to the contrary, any exercise by the Partnership or Nondefaulting Partner of the rights provided under Section 5.2(d) or Article XIII against the Defaulting Partner shall not require any approval or consent of any other Partner. The consent or dissent of Any General Partner to any action proposed in writing by the other General Partner (other than the approval of a Budget) shall be conveyed in writing to the managing Partner within ten (10) days after receipt by the other General Partner of written notification of such proposed action. The failure of the other General Partner to respond within such ten-day period shall be deemed to be approval of such action by the other General Partner. If the Managing Partner receives the approval, deemed approval or consent of the other General Partner to such proposed action, the Managing Partner shall be authorized to implement such action on the same or substantially similar terms authorized by the other General Partner without further authorization, consent or involvement from the other General Partner. 6.3 . Partner Meetings . (a) Regular meetings of the General Partners shall be held at such times as shall be specified by the Managing Partner (but not less frequently than quarterly, unless otherwise agreed to by the Partners). The chairman of such meeting shall be appointed by the Managing Partner. The chairman shall appoint persons to take minutes and perform similar functions. Any General Partner may call a special meeting on not less than ten (10) days prior written notice to the other Partners, specifying the time, place and special meeting. Prior notice of any special meeting need not be given, however, if such notice is waived in writing by all the General Partners. In addition, the attendance of a Partner or its Representative at a special meeting shall constitute a waiver, of notice thereof, except to the the purpose of such where such Partner or Representative gives advance notice the other Partners that he is attending such meeting for express purpose of objecting to the transaction of any business thereat on the grounds that such meeting is not lawfully called or convened. The minutes of each General Partners' meeting (whether a regular or special meeting or whether held in person or by telephonic conference) shall be in writing and shall set forth in reasonable detail the actions, votes or approvals taken at such meeting. The minutes of such meeting shall be delivered to each Partner as soon as reasonably practical following such meeting, and if no General Partner objects In writing to the contents of such minutes within ten (10) business days after receipt of such written minutes, such written minutes shall be deemed approved and acknowledged to be a complete and accurate account of such meeting by each General Partner and by the Representatives of each of the General Partners. (b) At each General Partners' meeting, the Managing Partner shall inform the other General Partner of the status of Partnership operations, progress (or lack thereof) of the Partnership's construction of Site Improvements or attempts to sell the Property and any other affairs or events material to the Partnership's business, and shall consult with the other General Partner with respect to such matters. Unless otherwise consented to in writing by the General Partners, all Partnership decisions of the General Partners shall be made at General Partner meetings called in according with the provisions of this Section 6.3(b). Any actions required or permitted to be taken at any regular or special meeting of the General Partners, may be taken by means of (i) a conference using telephonic or other equipment at which all members participating can hear and speak to each other (with the action taken during such conference to be properly reduced to writing, distributed to all Partners and objections given within ten business days of such distribution and filed in the records of the Partnership) or (ii) by means of a writing setting forth the action so taken, provided, that any actions taken or decision reached pursuant to such writing shall be concurred in, and any such written consent shall be executed, by each General Partner or its' Representative. All actions taken and decisions reached pursuant to this Section 6.3 shall be deem to have been taken and reached pursuant to a meeting of the Partners. (c) Each General Partner hereby designates the individuals specified in Exhibit D attached hereto as the Representatives (herein so called) of such Partner. Each such Representative of a Partner shall be and hereby is individually authorized and empowered as agent for such Partner to speak, act, direct, consent and sign on behalf of and to bind such Partner in all matters pertaining to the control and management of the Partnership and its business and affairs. Each Representative of a Partner is specifically and expressly authorized to exercise any and all rights, powers and duties expressly granted in this Agreement or by law to such Partner or to such Partner Representative, and any action by a Representative of a Partner pursuant to this Agreement shall, except as provided in this Section 6.3(c), be binding upon the Partner represented by such Representative. All consents, agreements, directions, approvals, signatures or other actions by or of a General Partner required or permitted under this Agreement or by law shall be deemed to mean and refer to the consent, agreement, direction, approval, signature or other actions of any one of the Representatives of such Partner. Each of the persons referred in this Section 6.3(c) as a Representative of a Partner shall be authorized to act on behalf of such Partner, unless and until the Partner represented by such Representative shall have removed such Representative as set forth below. A Partner may remove one or more of its Representatives at any time by giving at least two (2) days prior written notice to the Partnership and the other Partners; provided, however, that each Partner shall at all times have at least two (2) Representatives appointed for it as provided in this Section 6.3(c). A Partner may appoint additional Representatives at any time by giving at least two (2) days prior. Written notice to the Partnership and the other Partners (such notice of appointment of additional Representatives to include the names and addresses of such additional Representatives and the effective date of their appointment). No Representative of a Partner appointed under this, Section 6.3(c) shall be personally liable for any obligations of such Partner and shall be deemed for all purposes merely to be an agent of such Partner. In the performance of their respective duties under this Agreement, the Representatives shall use reasonable efforts to conduct the business of the Partnership in a good and businesslike manner and in accordance with good industry practice. The Partnership to the fullest extent permitted by law shall indemnify and hold harmless each Representative from and against any and all claims, damages, liabilities costs (including, without limitation, the cost of litigation and reasonable attorney fees), damages and causes of action arising out of, resulting from or attributable to the management of the Partnership and the conduct of its business, affairs and operations by the Representatives, except where the claim at issue is based upon the bad faith, gross negligence, fraud or willful misconduct of such Representative. The indemnification rights herein contained shall be cumulative of and in addition to, any and all rights, remedies and recourse, to which Representatives shall be entitled at law or in equity. 6.4. Appointment and Removal of Managing Partner. (a) Initial Managing Partner . Linpro shall serve as the initial Managing Partner of the Partnership. Each Partner considers it essential to the success of the Partnership's business that the Key Persons of the General Partners be active in the management of Partnership affairs. If all of the Key Persons of a General Partner cease to. be active in the management of the Partnership, then that General Partner shall immediately appoint at least one replacement Key Person acceptable to the other General Partner in its sole but reasonable discretion. For purposes of this Section 6.4(a), Key Persons shall be considered to be active in the management of the Partnership if they regularly supervise, and consult on all major Decisions with, individual employees or partners of the General Partner (or Affiliates thereof) who are qualified by experience to undertake the management responsibilities delegated to them by such Key Persons. (b) Change or Removal of Managing Partner. (i) The Managing Partner may be removed a s Managing Partner for cause upon the written request of the other General Partner (provided the other General Partner is not itself a Defaulting Partner at such time) such written request shall be delivered to the managing Partner and shall state the cause for removal and the effective date of such removal, which effective date may be immediately upon delivery of the notice or thereafter. If the Managing Partner disputes whether cause for removal exists or whether the other General Partner has authority to remove the Managing Partner, the Managing Partner shall continue to act as such but, at the sole election of the other General Partner, the matter shall be submitted to arbitration to determine if cause for removal exists or if the other General Partner has such authority (and such determination shall be binding on the Partners). Cause for the removal of the Managing Partner shall mean gross negligence, fraud, malfeasance, or knowing violation- of applicable laws which materially and adversely affects the Partnership. In addition, the Managing Partner may be removed as Managing Partner at any time within 90 days after the other Partner receives written notice or obtains actual knowledge of the occurrence of any of the following events: (A) An Event of Default described in any of clauses (a)-(g) of Section 13.2 hereof by the Managing Partner or any general partner or officer thereof; (B) Dilution of the Managing Partner's Percentage Interest by more than 50% of its original Percentage Interest or any subsequent dilution occurring thereafter; or (C) With respect to Linpro, only, the combined net worth of all managing partners of Linpro (as defined in this Agreement) shall be reduced to an amount less than Twenty Million Dollars ($20,000,000), based on the annual financial statements described in Section 16.2 hereof. (ii) Promptly after removing a Managing Partner, the other Partner shall be entitled to and is authorized to hire, at Partnership expense, an unaffiliated third party manager to manage the Partnership and the Project, without any further consent or authorization of the removed Managing Partner. Promptly after being removed, the former Managing Partner shall deliver to the other General Partner all books, records, correspondence, contracts, purchase orders, documents, bills, equipment, supplies and other assets or rights of the Partnership relating to the management and operation of the Partnership, and shall otherwise cooperate with the reasonable requests of the other General Partner in making an orderly transition of management authority and responsibility. The legal, accounting and any other costs incurred by the Partnership or other General Partner in bringing or participating in any action to establish cause or other grounds to, or to compel or enforce removal of, the Managing Partner in accordance with this Section 6.4, if any, shall be an offset to any and all amounts distributable to the former Managing Partner and/or to the amount to the former Managing Partner pursuant to Sections VIII and XIV hereof in the event that such action results (by settlement or otherwise) in removal of the Managing Partner on the grounds specified in this Section 6.4. The procedure established for removal of the Managing Partner in this Section 6.4 is in addition to and not in lieu of the rights of the other General Partner under Section XIII hereof, and the other General Partner may pursue its rights under either or both of such sets of provisions, including any rights and remedies available at law or in equity other than with regard to any Event of Default described in Section 13.2(a), (b), (c), (i) of this Agreement). 6.5 . Third Party Reliance on Authority of Managing Partner . The signed statement of the Managing Partner (acting through any one of its general partners, if it is a partnership, or by an officer, if it is a corporation), reciting that the Managing Partner (and such general partner of the Managing Partner, if it is a partnership, or such officer if it is a corporation), has authority to undertake any act or has the necessary votes or consents of the Partners to take any such act, when delivered to any third party (including any lender, tenant or purchaser, including any purchaser of the Project or other property from the Partnership, but excluding any Affiliate of the Managing Partner) (Third Party) , shall be all the evidence that any such Third Party shall need concerning the capacity of such Managing Partner and any general partner or officer thereof; and any such Third Party shall be entitled to rely upon such statement and shall not be required to inquire further as to any of the facts contained in such statement, said facts being deemed to be true insofar as such Third Party is concerned. After delivering such statement, the Managing Partner and any general partner or officer thereof, by its or his signature alone, may sign any instrument and bind the Partnership and the Partners and encumber the Partnership property, just as though all of the Partners and all of the partners or officers of the Managing Partner had also signed. Each of the Partners and/or its assigns hereby waive any and all defenses or other remedies that may be available against any such Third Party or other Person (excluding an Affiliate) to contest, negate or disaffirm any action of the Managing Partner in connection with any such statement provided pursuant to this Section 6.5. Each contract, agreement, deed, lease, mortgage, security agreement, promissory note or other instrument or document executed by the Managing Partner or its representative with respect to any business or property of the Partnership shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery thereof, this Agreement was in full force and effect, (b) such instrument or document was duly executed in accordance with the terms and provisions of this Agreement and is binding upon the Partnership and the Partners and (c) the Managing Partner or its representative was duly authorized and empowered to execute and deliver any and every such instrument or document for and on behalf of the Partnership. Such statement shall not, however, have any effect between the Partners, unless the action in question was in fact authorized pursuant to this Agreement. 6.6 . Time Devoted to Partnership . Each General Partner shall devote that portion of its time to the Partnership affairs necessary to fulfill its obligations hereunder as may be reasonably required by the Partnership business. Any Partner may engage in, acquire or possess an interest or interests in other business ventures of any nature or description, independently or with others, whether or not competitive with the business of the Partnership, including but not limited to, the real estate business in all its phases, which shall include without limitation, ownership, operation, management, syndication and development of real property, and neither the Partnership nor any Partner shall have any rights in or to such independent ventures or the income or profits derived therefrom. No Partner shall be obligated to present any particular investment opportunity or other opportunity to the Partnership or to the other Partner, even if such opportunity is of a character which, if presented to the Partnership or the other Partner, could or might be taken by the Partnership or such other Partner, and each such Partner shall have the right to take any investment for its own account (individually or as trustee) or to recommend any particular investment opportunity to any other Person whatsoever. Each Partner hereby acknowledges that each other Partner or its Affiliates currently own, or may in the future acquire, interests in real estate projects in the immediate vicinity of the Property that are or may be in competition with the Project. 6.7 . Limitation on Liability of the Partners; Indemnification . No Indemnitee shall be liable, responsible or accountable in damages or otherwise to any Partner for any acts performed (or failure to act) by such Indemnitee in good faith and reasonably believed to be within the scope of the authority granted to such Person by or in accordance with this Agreement, specifically. including any such act or failure to act which is attributable in whole or in part to the negligence of such Indemnitee, but specifically excluding any such act or failure to act which is primarily attributable to gross negligence, malfeasance (including but not limited to knowing violation of applicable laws that materially and adversely affects the Partnership)or fraud. To the fullest extent permitted by law, the Partnership (but not any Partner) shall indemnify and hold harmless each Indemnitee for any loss, damage, liability, cost or expense (including reasonable attorneys' fees) arising out of any act or failure to act by such Indemnitee, if such act or failure to act is in. good faith and is reasonably believed to be within the scope of the authority granted to such Person by or in accordance with this Agreement, specifically including any act or failure to act which is attributable in whole or in part to the negligence of such Indemnitee, but specifically excluding any such act or failure to act which is primarily attributable to gross negligence, malfeasance (including but not limited to knowing violation of applicable laws that materially and adversely affects the Partnership) or fraud. The termination of a proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that an Indemnitee did not act in good faith. The Partnership shall also provide such indemnification in any action, suit or proceeding by or in the right of the Partnership to procure a judgment in its favor. Expenses incurred in defending any action, suit or proceeding shall be paid by the Partnership in advance of final disposition of such proceeding upon receipt' of an undertaking (which shall be secured by a pledge of the indemnified Partner's Partnership Interest or other collateral reasonably acceptable to the Partners) by or on behalf of the Indemnitee to repay such amount with interest at the Base Lending Rate from the date of any such advance if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Partnership as authorized thereunder. The indemnification called for by this Section 6.7 shall continue as to any Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns, administrators and personal representatives of such Indemnitee. The Partnership may purchase and maintain insurance on behalf of any one or more of the Indemnitees And any other Person, as the General Partners shall determine, against any liability that may be asserted against or expense that may be incurred by such Person in connection with the, activities of the Partnership, whether or not the Partnership would have the power to indemnify such Person against such liability thereunder. An Indemnitee shall not be denied indemnification in whole or in part because the Indemnitee had an interest in the transaction with respect to which indemnification applies, if the transaction was otherwise permitted by the terms of this Agreement. The provisions of this Section 6.7 are for the benefit of the Indemnitees and their heirs, successors, assigns, administrators and personal representatives, and shall not be deemed to create any rights for the benefit of any other Person. Each Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by such Partner to be genuine and to have been signed or presented by the proper party or parties. Each Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by such Partner. The opinion of such consultant or adviser as to matters which such Partner reasonably believes to be within such consultant's or adviser's professional or expert competence shall be, full and complete authorization and, protection in respect of any action taken or suffered or omitted by such Partner in good faith and in accordance with such opinion (provided, however, in the event a Partner seeks to rely on such an opinion for purposes of this Section 6.7. such opinion shall be confirmed in writing by the consultant or advisor that rendered such opinion). 6.8 . Authority of Limited Partner. The Limited Partner shall take no part or otherwise participate in the conduct or control of the. Partnership business and shall have no right or authority to act for or to bind the Partnership. The exercise of any of the rights and powers of the Limited Partner pursuant to the terms of this Agreement shall not be deemed taking part or otherwise participating in the day-to-day affairs of the Partnership or the exercise of control over Partnership affairs.
SECTION VII Allocations of Profits and Losses
7.1. Allocation of Profits and Losses. (a) General Allocations. For each year of the Partnership (or part thereof), Profits or Losses will first be allocated between the Partners (after giving effect to Section 7.3 and Section 7.1(b)) so as to eliminate or minimize proportionately, the differences between their respective Partially Adjusted Capital Accounts and Target Accounts for that fiscal year; provided, however, that no portion of the Profits for any fiscal year shall be allocated to a Partner whose Partially Adjusted Capital Account is greater than or equal to its Target Account and no portion of the Losses for any fiscal year shall be allocated to a Partner whose Target Account is greater than or equal to its Partially Adjusted Capital Account for such year. (b) Other Special Allocations. (i) If the Partnership has a Profit for any fiscal year, (determined prior to giving effect to this Section 7.1(b)(i)), each Partner whose Partially Adjusted Capital Account is greater than his Target Capital Account for such year shall be allocated items of Partnership expense or loss for such year equal to the difference between his Target Capital Account and his Partially Adjusted Capital Account. In the event the Partnership has insufficient items of expense or loss for such year to satisfy the previous sentence with respect to all such Partners, the available items of expense or loss, shall be divided among such Partners in proportion to such differences. (ii) If the Partnership has a Loss for any fiscal year (determined prior to giving effect to this Section 7.1(b)(ii)), each Partner whose Target Account is greater than his Partially Adjusted Capital Account for such year shall be specially allocated items of Partnership income or gain for such year equal to the difference between his Target Account and his Partially Adjusted Capital Account. In the event the Partnership has insufficient items of income or gain for such year to satisfy the previous sentence with respect to all such Partners, the available items of income or gain shall be divided among the Partners in proportion to such differences. 7.2. Tax Allocations . For federal income tax purposes, except as otherwise provided in Sections 7.3 and 7.4, each item of income, gain loss and deduction of the Partnership shall be allocated among the Partners in accordance with the manner in which the corresponding item of Profit or Loss is allocated. 7.3. Special Allocations. (a) Minimum Gain Chargeback . Notwithstanding any other provision of this Section VII, if there is a net decrease in Partnership Minimum Gain or Partner Minimum Gain during a Partnership taxable year, prior to any other allocation, each Partner shall be specially allocated items of Partnership income and gain for such year (and if necessary, subsequent years) in an amount and manner required by Treasury Regulations Section 1.704-lT(b)(4)(iv)(e) or 1.704-lT(b)(4)(iv)(h), or any successor provisions. (b) Qualified Income Offset . If a Partner receives an unexpected adjustment, allocation or distribution as described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d), items of Partnership income or gain shall be specially allocated to. such Partner in an amount and manner sufficient to eliminate, to the extent required by Treasury Regulations under Code Section 704(b), the Adjusted Capital Account Deficit of such Partner as quickly as possible; provided that an allocation pursuant to this section 7.3(b) shall be made only if and to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 7.3 have been tentatively made as if this section 7.3(b) were not in this Agreement. This Section 7.3(b) is intended to comply with Treasury Regulation Section 1.704-1(b)(2)(ii)(d) or any successor provision thereto and shall be interpreted consistently therewith. (c) Nonrecourse Deductions . Nonrecourse Deductions of the Partnership shall be allocated to the Partners in proportion to their respective Percentage Interests. (d) Allocation of Partner Nonrecourse Deductions . Any partner Nonrecourse Deductions for any fiscal year or other period shall be allocated to the Partner that made or guaranteed or is otherwise liable with respect to the loan to which such Partner Nonrecourse Deductions are attributable in accordance with principles under Treasury Regulation Section 1.704-1T(b)(4)(iv)(h) or any successor provision. (e) Code Section 754 Adjustment . To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734 (b) or Code Section 743 (b) is required, pursuant to Treasury Regulation Section 1.704-1(b) (2) (iv) (m) to be taken into account in determining capital, accounts, the amount of such adjustment to the capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their capital accounts are required to be adjusted pursuant to such Section of the Treasury Regulations. (f) Other Special Allocations . Gain, loss or cancellation of debt income, if any, arising from the payment or cancellation of the debt of the Partnership to the Bank of New England N.A. shall be allocated entirely to Linpro. Any gain or loss from or attributable to the contribution of a portion of the Property to Harmans Building Associates, a Maryland general partnership (Harmans Building) in, exchange for a partnership interest therein and any gain or loss from or attributable to the distribution of the partnership interest acquired by the Partnership in Harmans Building to Linpro shall be allocated entirely to Linpro. 7.4 Section 764(c) Compliance . In accordance with section 704(c) of the Code and the applicable Treasury regulations thereunder, income, gain, loss, and deduction, including tax depreciation, with respect to any property contributed to the capital of the Partnership, or with respect to any property which properly has, in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f) and (g), a Book Basis different than its adjusted tax basis, shall, solely for tax purposes, be allocated among the Partners so as to take into account any variation between the adjusted tax basis of such property to the Partnership and the Book Basis of such property. Allocations pursuant to this Section 7.4 are solely for purposes of federal, state and local taxes and shall not affect, nor in any way be taken into account in computing, any Partner's Capital Account or share of Profits, Losses or other items or distributions pursuant to any provision of this Agreement.
SECTION VIII Distributions
8.1. Net Cash Flow . After providing for the satisfaction of all the current debts and obligations of the Partnership, after any required payments on any loan or other financing, the Partnership shall, as soon as reasonably practical, make semi-annual distributions and annual adjusting distributions of Net Cash Flow of the Partnership, to the extent available (after establishment of appropriate and reasonable reserves, as determined by the General Partners) to the Partners in the following manner and order of priority: (a) first, an amount (under this clause (a)) of Net Cash Flow up to the aggregate balance of the Deficit Contribution Accounts of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's Deficit Contribution Account; (b) second, an amount (under this clause (b)) of Net Cash Flow up to the aggregate amount of Preferred Return of the Partners for such period shall be distributed to the Partners in proportion to their respective amounts of such Preferred Return; (c) third, an amount (under this clause (c)) of Net Cash Flow of the Partnership up to the aggregate balance of the Unrecovered Capital Accounts of the Partners shall be distributed to the Partners in proportion to the respective balance in the Unrecovered Capital Account of each such Partner; and (d) thereafter, any remaining balance of 'Net Cash Flow of the Partnership shall be distributed to the Partners in .accordance with and in proportion to their respective Percentage Interests in the Partnership. In the event that the Partners' Percentage Interests change within a Partnership fiscal year, any Net Cash Flow distributed pursuant to clause (e) with respect to such year shall be distributed pro rata in proportion to both the number of days in such year and the Partners' respective Percentage Interests that were in effect on such days. 8.2. Distributions of Proceeds of Interim Capital Transactions. After providing for the satisfaction of all the current debts and obligations of the Partnership, including any required payments on any loan or other financing and excluding any non-required principal prepayments of Partnership debts or liabilities (which shall be made only with the Approval of the General Partners), the Partnership shall, as soon as reasonably practical following an interim Capital Transaction, distribute the net proceeds of such Interim Capital Transactions to the Partners to the extent available (after establishment of appropriate and reasonable reserves, as determined by the General Partners) in the following manner and order of priority: (a) first, an amount (under this clause (a)) of such net proceeds up to the aggregate balance of the Deficit Contribution Accounts of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's Deficit Contribution Account; (b) second, an amount (under this clause (b)) of such net proceeds up to the aggregate balance of the. Preferred Return of the Partners shall be distributed to the Partners in proportion to the respective amounts of the Preferred Return of each such Partner; (c) third, an amount (under this clause (c)) of such net proceeds up to the aggregate balance of the Unrecovered Capital Accounts of the Partners shall be distributed to the Partners in proportion to the respective balance in- the Unrecovered Capital Account of each such Partner; (d) fourth, an amount (under this clause (4)) of such net proceeds, to the extent such net proceeds are from or reflect a gross sales price of the Property of up to $125,000 per acre, shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests; (e) fifth, an amount (under this clause (e)) of such net proceeds, up to the balance of the Special Account of Linpro, to the extent such net proceeds are from or reflect a gross sales price of the Property of greater than $125,000 per acre, shall be distributed to Linpro; and (f) thereafter, any remaining net proceeds shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests in the Partnership. In the event that the Partners' Percentage Interest change within a Partnership fiscal year, any net proceeds distributed pursuant to clauses (d) and (f) with respect to such year shall be distributed in proportion to the Partners, respective Percentage Interests that were in effect at the time of the transaction or event generating the net proceeds distributable under clauses (d) and (f). 8.3 . Distribution of Proceeds Available Upon Dissolution and Winding Up . Upon the dissolution and winding-up of the Partnership, after providing for the satisfaction of all the debts and obligations of the Partnership and after any required payments on any loan or other financing, the Partnership shall, as soon as reasonably practical, distribute net proceeds available (after establishment of appropriate and reasonable reserves, as determined by the General Partners) upon dissolution and winding-up to the Partners within the time period specified by Treasury Regulation Section 1.704-1(b) (2) (ii) (b) (2) in the following manner and order of priority (after allocating Profit or Loss and any items of income, gain, loss or deduction pursuant to Section' VII hereof): (a) first, an amount (under this clause (a) of such net liquidation proceeds up to the aggregate balance of the Deficit Contribution Accounts of the Partners shall be distributed to the Partners in proportion to the respective amounts of each Partner's Deficit Contribution Account; (b) second, an amount (under this clause (b), of such net liquidation proceeds up, to the aggregate balance of the Preferred Return of the Partners at that time shall be distributed to the Partners in proportion to the respective Preferred Return of each such Partner; (c) third, an amount (under this clause (c) of such net liquidation proceeds up to the aggregate balance of the Unrecovered Capital Accounts of the Partners at that time shall be distributed to the Partners in proportion to the respective balance in the Unrecovered Capital Account of each such Partner; (d) fourth, an amount (under this clause (d)) of such net proceeds, to the extent such net proceeds are from or reflect a gross sales price of the Property of up to $125,000 per acre, shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests; (e) fifth, an amount (under this clause (e)) of such net proceeds, up to the balance of the Special Account of Linpro, to the extent such net proceeds are from or reflect a gross sales price of the Property of greater than $125,000 per acre, shall be distributed to Linpro; (f) then, any remaining net liquidation proceeds shall be distributed to the Partners in accordance with and in proportion to their respective Percentage Interests in the Partnership (determined as of the date of such distribution). To the extent any reserves are established for contingent, unforeseen or other liabilities or obligations of the Partnership, as set forth above, such reserves shall be held for the, purpose of paying such contingent, unforeseen or other liabilities or obligations and, at the expiration of such period as deemed reasonably advisable by the Partner liquidating the assets of the Partnership, of distributing the balance of such reserves in. the manner provided herein above in this section 8.3. 8.4 . Place of Distribution . All cash distributions to PCI shall be made directly to PCI at Suite 600, 900 19th Street, N.W., Washington, D.C. 20006. All cash distributions to Linpro and the Limited Partner shall be made directly to Linpro and the Limited Partner at Suite 211, 1717 Elton Road, Silver Spring, MD 20903. Any Partner may change its address for distributions by notice to the Managing Partner. 8.5 . Distributions in Kind . If any assets of the Partnership shall be distributed in kind, such assets shall be distributed to the Partners entitled thereto as tenants-in-common in the same proportions in which such Partners would have been entitled to cash distributions, as determined after application of Section 5.10 hereof. 8.6 . Land Distribution . Immediately following the execution and delivery of this Agreement, the Partnership shall distribute to Linpro all of its right, title and interest in Harmans Building Associates, a Maryland general partnership, which the parties agree has no net fair market value as of the date of such distribution.
SECTION IX Partnership Expenses, Reserves and Fees
9.1. Partnership Expenses. Except as otherwise, provided in any construction contract or management agreement, all of the Partnership's expenses shall, where practical, be billed directly to and paid by the Partnership; provided, however, that the Partnership shall not be required to pay any Partner's allocable, overhead costs (other than reasonable allocation of Linpro's accounting and data processing services, which amount shall be reimbursed to Linpro). The Partners shall be entitled to be reimbursed for those costs or expenses incurred by them on behalf of the Partnership prior to its formation, such as letter of credit fees with respect to the contract for the purchase of the Property, architectural and engineering costs and the other expenses Approved by the General Partners, set forth in Exhibit F attached hereto, and shall not be entitled to be reimbursed for any other pre-formation costs incurred by them. In the event any Partnership costs and expenses are or have been paid by a Partner on behalf of the Partnership, then, except as expressly provided herein to the contrary, such Partner shall be entitled to be reimbursed for such payment or expense as long as incurring the obligation to pay such costs or expenses was Approved by the General Partners. 9.2 . Reserves . (a) From and after the date of this Agreement, the Managing Partner may establish one or more separate operating, replacement and working capital reserve accounts ( Reserve Account ) with respect to the Project in such amount as the General Partners shall determine to be appropriate, and may deposit therein from time to time such amounts from net revenues from operations and net proceeds received by the Partnership from capital, transactions before any distributions of any such revenues or proceeds to the Partners. Insetting the amount of Partnership reserves, the Partners acknowledge that it is their intent to set only such reserve levels as are reasonably necessary to meet the current needs of the Partnership and not to accumulate funds for the purposes of prepaying existing Partnership debt or avoiding or delaying the borrowing of additional funds for the construction or refinancing of the Improvements, to the extent that such accumulation would unreasonably delay the distribution of, or prevent the Partnership from distributing, the unpaid amount of the Partners Preferred Return. (b) The Reserve Account may be charged with any expenditures for the operation of the Partnership or the purchase, repair, maintenance or construction of items relating to the Project, whether such items are treated as current expense deductions or as capital expenditures under generally accepted accounting practices; provided, however, that no expenditures shall be made from the Reserve Account to the extent that the cost of the purchase, repair or construction is provided by insurance proceeds or proceeds of a loan secured by a security interest in the property repaired or purchased, or a, real property mortgage loan or of similar financing or refinancing with respect to the Project Nothing contained in this Section 9.2 shall in any way limit or restrict, or expand the right of the Managing Partner to use other assets or funds of the Partnership (other than deposits to the Reserve Account) for any such expenditures for the operation of the Partnership or the purchase, repair, maintenance or construction of items relating to the Project. 9.3 . Marketing Cost Recovery Fee . In consideration of its services in, marketing land parcels to be sold to unaffiliated third parties, in addition to any third party brokerage or, other fees, the Partnership shall pay to Linpro a Marketing Cost Recovery Fee equal to one percent (1%) of the gross sales price (without reduction for any land loan, development loan or other debt obligations or closing costs) of land parcels sold to such unaffiliated third parties. The Marketing cost Recovery Fee shall be payable at the closing of any such sale of land parcels to third parties.
SECTION X Annual Budgets
10. 1 . Annual Budget . The Managing Partner shall prepare (or cause to be prepared) an annual budget for the Partnership (such annual budget as Approved by the General Partners and as amended from time to time with the Approval of the General Partners being referred to herein as the Annual Budget ), which shall include, among other things, budgeted revenues (including contemplated proceeds of capital transactions) and expenses projected capital improvements, repairs or replacements, reserves, and management, marketing and leasing plans for the Partnership. The Annual Budget shall be accompanied, by notes or other narrative setting forth in reasonable detail any material assumptions made or relied upon in generating such budget. The initial Annual Budget for the Partnership, as unanimously approved by the Partners, is attached hereto as Exhibit G and by this reference made a part hereof. The Annual Budget for each succeeding year shall be prepared (or caused to be prepared) each year in proposed form by the Managing Partner and delivered to the General Partners no later than November 15 of the year preceding the year for which such budget is to be effective. The General Partners or their Representatives shall diligently review such proposed budget and meet to review and discuss such budget no later than December 15 of such year. If any General Partner, through its Representatives, makes written objections to, or comments on, the proposed Annual Budget on or before such meeting, or at any time thereafter prior to Approval of such budget by the General Partners, the General Partners shall use their best and good faith efforts to agree as soon as possible on a revised Annual Budget acceptable to the General Partners. The Managing Partner shall have no authority to undertake or implement the actions described in, or operate the Partnership in accordance with, any proposed Annual Budget, as revised by the General Partners, until such Annual Budget has been Approved by the General Partners. The Managing Partner may, however, on its own initiative propose for the General Partners' consideration amendments or modifications to any Annual Budget previously approved by the General Partners as, in the Managing Partner's reasonable discretion, are necessary or desirable due to changed or uncontemplated business conditions or other circumstances or considerations. If, after following the procedure set forth in this Section 10.1, the General Partners are unable to approve the Annual Budget, for the ensuing fiscal year by January 1 of such year, then the Managing Partner shall continue to operate the Partnership in a manner which is as consistent as possible with the previous year's Annual Budget, as most recently revised, with suitable adjustments in revenues and expenses as dictated by inflationary factors or as otherwise dictated by necessary changes in operations.
SECTION XI Deficit Contributions
11.1 . Deficit Contribution Accounts . (a) Any contribution made by a General Partner to the Partnership pursuant to Section 5. 2 (d) (i) shall be a Deficit Contribution for all purposes of this Agreement and shall be added to the Deficit Contribution Account [as defined in Section 11.1(b)] of the General Partner making the contribution. Deficit Contributions shall be repaid, With a preferred return, solely by means of those payments pursuant hereto which reduce the balance of the Deficit contribution Accounts of the Partners, as provided in this Section 11.1. (b) The Deficit Contribution Account of a General Partner shall mean the aggregate Deficit Contributions made by the Partner to the Partnership pursuant to Section 5.2 (d) (i), increased by (i) the amount of accumulated preferred return thereon [computed as provided in Section 11.1(c)], and decreased by (ii) the amounts distributed to the Partner pursuant to Sections 8.1(a), 8.2(a) and 8.3(a) in reduction of the Deficit Contribution Account of the Partner. (c) The preferred return shall be computed on the unreturned Deficit Contributions at a rate per annum equal to the Base Lending Rate plus 3.0%, compounded annually (provided such referred return shall never be less than a cumulative annual compound return of 9.5% or greater than a cumulative annual compound return of 14.0%). (d) For all purposes of this Agreement, the distributions specified in Section 11.1(b) which decrease the Deficit Contribution Account of a Partner shall be treated first as a distribution of the accumulated preferred return on the Deficit Contributions and next as a return of the Deficit Contributions.
SECTION XII Assignment of Interests of Partners
12.1 . General Restrictions. The interest in the Partnership of any Partner may be assigned only as permitted by the provisions of Section XIII or this Section XII. Neither the Partnership nor the Partners shall be bound by any such assignment until a counterpart of the instrument of assignment, executed and acknowledged by the parties thereto, is delivered to the Partnership and the Partners, and such assignment shall be effective as of the date specified therein. 12.2 . Specific Restrictions . Except as provided in Section XIII, this Section 12.2 or Section 12.3, 12.4 or 12.5 hereof (a) neither Linpro nor any general partner of Linpro shall transfer, sell, assign, pledge, encumber, grant a security interest, give or otherwise dispose of all or any part of its interest in the Partnership or in Linpro, whether voluntarily or by operation of law, or at judicial sale or otherwise, to any person, without the prior written consent of PCI, and (b) PCI shall not transfer, sell, assign, pledge, encumber, grant a security interest, give or otherwise dispose of all or any part of its interest in the Partnership, whether voluntarily or by operation of law, or at judicial sale or otherwise, to any person, without the prior written consent of Linpro. 12.3 . Permitted Transfers by Linpro and Partners of Linpro. Notwithstanding anything in Section 12.2 hereof to the contrary, provided the same does not violate or cause the Partnership as borrower under any loan to breach any term thereof, Linpro may assign or transfer all (but not less than all, unless such transfer or assignment is a pledge or other transfer to provide security for an obligation of Linpro) of its interest in the Partnership to an Affiliate of Linpro (provided one or more of Eric Eichler, John A. Berry, Jay G. Cranmer, John Chirtea, Mark Corneal, J. Patrick Armstrong or Peter P. DiLullo, the Current General Partners control all day-to-day and major management decisions of such Affiliate, and directly (or indirectly through wholly owned subsidiary entities) possess (during the construction of the Project) or, together with Persons described in clause (c) below (after completion of such construction), more than 50% of the stock or partnership interests in such Affiliate), and so long as such Current General Partners continue to control all day-to-day and major management decisions of Linpro and such general partners continue to directly (or indirectly through wholly owned subsidiary entities) possess (during the construction of the Project) or, together with persons described in clause (c) below (after completion of such construction), more than 50% of the partnership interests in Linpro, any partner of Linpro may assign or transfer all or any part of his or its interest in Linpro (a) to an Affiliate of such transferor, (b) to a person who is then a partner of Linpro and who is not Insolvent or Bankrupt within the meaning of Section 14.1, (c) whether voluntarily. or involuntarily, on death or inter vivos (in trust or otherwise), to or for the benefit of any member of his immediate family (i.e., spouse, brothers and sisters, parents, children, including those adopted, their direct descendants, and the spouses of any of them), or (d) to a person who is then a partner in The Linpro Company. 12.4 . Permitted Transfers by PCI . Notwithstanding anything in Section 12.2 hereof to the contrary, PCI may assign or transfer all (but not less than all, unless such transfer or assignment is a pledge: or other transfer to provide security for an obligation of PCI) of its interest in the Partnership to an Affiliate of PCI. 12.5. Additional Permitted Transfers. (a) In the event Linpro or PCI desires at any time to sell, assign or transfer (Transfer) all or any part of its interest in the Partnership (the Interest ) other than as permitted by Sections 12.3 or 12.4 hereof, such Partner (the Offeror ) may only do so if such, Transfer (i) is to a third party who is (A) generally of good reputation, (B) capable of fulfilling the financial obligations of a Partner hereunder, (C) with respect to a transfer by Linpro, experienced in the development and management of projects similar to the Project, and (D) with respect to a Transfer by PCI, not actively involved (either directly or through affiliated entities) in the development, management and/or operation of projects similar to the Project on a local or national basis (a Third Party) , (ii) complies with the terms of this Section 12.5 and (iii) does not cause material adverse tax consequences to a Partner or partner therein (other than those tax consequences, associated with transfers to foreign or tax exempt transferees). The Offeror shall first send a written notice (the Notice) to the other Partner (the Offeree) offering to Transfer such Interest to the offeree. The Offering Notice shall set forth the purchase price for such Interest, together with the other terms and conditions of such offer. (b) The Offeree, by written notice to the Offeror given within thirty (30) days of the receipt of the Notice from the offeror (the Response Period), may elect to purchase the Interest on the terms and conditions set forth in the Notice such written notice shall be accompanied by a certified or cashier's check in an amount equal to 5% of the proposed purchase price Failure of the Offeree to respond within the Response Period shall be deemed consent to the proposed Transfer and the provisions of Section 12.5(d) below shall apply. (c) If the Offeree shall so elect, the Offeror shall sell and the Offeree shall buy the Interest. The aforesaid sale shall close on the date which is one hundred twenty (120) days following the Offeree's election to purchase the Interest in accordance with this Section 12.5. The closing shall be held at the principal office of the Partnership or at such other place as may be mutually agreed to by the Partners. At the closing, the Offeree shall tender the remainder of the purchase price by certified or cashier's check or, at the Offeror's election, by wire transfer, against delivery by the Offeror of an assignment of the Interest. In the event the offeree fails to close the purchase of the Interest on the date of closing thereof, the Offeror may, as its sole, and exclusive remedy, cause the Offeree to forfeit its deposit as liquidated damages for such failure to close, with such deposit being paid directly to the Offeror notwithstanding the provisions of Section VIII to the contrary. In addition, upon any such default, the terms and provisions of this Section 12.5 shall be of no further force and effect with respect to the defaulting Offeree and the Offeror shall be permitted to transfer the Interest in the Partnership to a third party without the consent of the Offeree. (d) If the Offeree does not elect to purchase the Interest by sending written notice of such election to the Offeror prior to the expiration of the Response Period, the Offeror shall be free for a period of one hundred eighty (180) days after the lapse of the Response Period, to Transfer the Interest to a Third Party on substantially the same terms as set forth in the Notice. However, if the Offeror proposes to sell the Interest on terms not substantially the same as those set forth in the Notice, it shall again give the Offeree a Notice under this Section 12.5 and the Offeree shall again have the rights set forth in this Section 12.5. (e) For purposes of this Section 12.5, Linpro and the Limited Partner shall be treated together as a group or single entity in the same manner as if they were a single Partner. Wherever in this Section 12.5 any reference is made to Linpro, such reference shall be deemed to mean and refer to the Linpro Group, and Linpro shall have the right, power and authority to act for and on behalf of the Linpro Group, without any consent, approval or authorization of any kind whatsoever from the Limited Partner. 12.6. Foreign or Tax Exempt Transferee . Notwithstanding Section 12.5 hereof, no Partner may assign, transfer or otherwise dispose of all or any part of its interest in the Partnership to a person who is not a citizen and resident of the United States or to a tax-exempt entity within the meaning of section 168 (h) (2) of the Code unless such transferee agrees with the remaining Partners to specially allocate depreciation deductions such that the remaining Partners suffer no increase in allocable shares of Partnership taxable income due to the decreased Partnership depreciation deductions that result from the presence of a foreign or tax-exempt partner and executes an amendment to this Agreement in. form and substance satisfactory to the remaining Partners to effect this result. In the event that any Partner in the Partnership is not or shall cease to be a citizen and resident of. the United States of America such Partner by execution of this Agreement or any amendment hereto agrees to file such forms or other information as may be necessary in order to eliminate any obligation on the part of the Partnership or any Partner to withhold from amounts distributed to such Partner pursuant to this Agreement, United States Federal income taxes pursuant to section 1441 or any other section of the Code. 12.7 . Substituted Partner . No permitted assignee or transferee of all or part of the interest in the Partnership of a Partner in the Partnership shall have the right to become a substituted partner in the Partnership, unless: (a) the assignor has granted to the assignee the right to become a substituted partner in the Partnership in the instrument of assignment; (b) the assignee has executed an instrument reasonably satisfactory to the other Partners accepting and adopting the terms and provisions of this Agreement; (c) the assignor or the assignee has paid or reimbursed the Partnership and the other. Partners any reasonable legal, accounting and other expenses in connection with the admission of the assignee as a substituted partner in the Partnership; and (d) In the case of a transfer of a limited partner interest to an assignee or. transferee who is not otherwise a Partner, the Managing Partner unanimously consents to such person becoming a substitute limited partner (in the sole discretion of the Managing Partner). 12.8. General Partner as Limited Partners . If any General Partner or any of the partners of any General Partner should acquire an interest in the Partnership as a limited partner, such General Partner or such partner of the General Partner shall, with respect to such limited partner interest, enjoy all of the rights and be subject to all of the obligations and duties of a limited partner to the extent of such interest. 12.9. Minimum ownership by Partners . Notwithstanding anything herein to the contrary, without the prior written consent of the other Partners, no Partner shall have the right to sell, assign or otherwise transfer its interest in the Partnership to any person if after such sale, assignment or transfer, either the Partner (but only if such Partner continues to hold an interest in the Partnership) or the purchaser, assignee or transferee would hold an interest in the Partnership of less than 1%. 12.10. Section 754 Election . In the event of a transfer of all or part of the interest of. a Partner in the Partnership, by sale or exchange, at the request of the transferor, or in the event of a distribution which could give rise to an optional basis adjustment described in Section 754 of the Code, the Partnership shall elect, pursuant to Section 754 of the Code, or the corresponding provision of subsequent law, to adjust the basis of the Partnership property as provided by Sections 734 and 743 of the Code, and any costs of such election or costs of administrating or accounting for such election shall be at the sole cost and expense of the transferor, or the distributor as the case may be. 12.11. Allocations Between Transferor and Transferee . In the event of a transfer of all or any part of the interest of a Partner in the Partnership by sale or exchange, unless otherwise agreed between the transferor and the transferee, upon the transfer of such interest, the net profits, net losses, net gains and credits attributable to the interest so transferred shall be allocated between the transferor, and the transferee as of the date set forth in the instrument of transfer, and such allocation shall be based upon the number of days during the applicable fiscal year of the Partnership that the interest so transferred was held by each of them, without regard to the results of Partnership activities and operations during the period in which each was the holder; provided, however, that the net gains or net losses on the sale of the Project or any portion thereof shall be allocated to the holder of record of the interest on the date of sale; and provided further, that any such transferee or transferor shall not be entitled to cause the Partnership to close its books on an interim basis. Distributions shall be made to the holder of record of the interest on the date of distribution.
SECTION XIII Deadlock; Events of Default
13.1. Deadlock . As used in this Agreement a Deadlock shall have occurred if the Partners have failed, after good faith efforts by the Partners or their Representatives, to Approve or agree to reject, modify or delay the decision whether to Approve, reject, or modify any Development Plan and Budget, any Construction. Plan and Budget, any Annual Budget or any major Decision presented to the General Partners for action within sixty (60) business days of the date of the General Partners meeting at which the General Partners first fail to Approve or agree to reject, modify or delay decision with respect to such matter and the General Partners express inconsistent or conflicting opinions or views with respect to such decision. Except as provided below in paragraph (h) of this Section 13.1, in the event of any Deadlock, either General Partner (the Offeror ) shall have the right to make an offer as described below (the Buy-Sell Offer ) to the other General Partner (the Offeree) as set forth below: (a) The Buy-Sell Offer shall (i) be in writing and be signed by the Offeror; (ii) specify a cash purchase price ( Overall Purchase Price ) for all, of the assets of the Partnership, as if free and clear of all loans and other financing; (iii) specify the amount of the Overall Purchase Price which is attributable to the Project and other Partnership assets; (iv) specify the other major economic terms and conditions upon which the Offeror would be willing to sell to the Offeree either its interest in the Partnership or all of the Partnership assets (and in each case, under the circumstances described below, those same terms and conditions to apply to the sale by the Offeree to the Offeror of either its interest in the Partnership or all of the Partnership assets) in each case consistent with the terms of the alternative elections set forth below in Section 13.1 (b); and (v) disclose the terms and details of any discussion, refinancing or proposed sale that the Offeror has entertained, negotiated or discussed during the last 180 days with any third party for all or any portion of the Project. (b) The Offeree shall have the right, exercisable by delivery of notice in writing (the Election ) to the Offeror within 90 days from the receipt of the Buy-Sell Offer to elect to either: (i) sell to the Offeror all of the Offeree's right, title and interest in and to its Partnership Interest for the amount that the Offeree would receive if all Partnership assets were sold for the Overall Purchase Price, all existing loans and other financing were paid in full, and the remaining proceeds were distributed to the Partners and the Partnership liquidated, all as provided in Section 8.3; (ii) purchase all of the Offeror's right, title and interest in and to its Partnership Interest for the amount that the Offeror would receive if all Partnership assets were sold for the Overall Purchase Price, all loans and other financing and other Partnership obligations were paid in full, and the remaining proceeds distributed to the Partners and the Partnership liquidated, all as provided in Section 8.3; (iii) purchase all of the Partnership assets from the Partnership for a cash purchase price equal to the overall Purchase Price; or (iv) cause the Partnership to sell to Offeror all of the Partnership assets for a cash purchase price equal to the overall Purchase Price. (c) In the case of a purchase of all the assets of the Partnership as described in clauses (b)(iii) or (iv), above, the Partner making such purchase may elect, in its sole discretion, to (i) pay all loans and other financing in full from the Overall Purchase Price or (ii) take some or all of the Project subject to such loans and other financings securing such portions of the Project, in which case the Overall Purchase Price shall be reduced by the amount of the loans and other financings to which the Project is taken subject to and the other loans and other financings shall be paid from the Overall Purchase Price; provided, however, that clause (C) (ii) may not be elected and all loans and other financings must be paid in full from the Overall Purchase Price unless all applicable lenders of such loans and other financings not to be paid consent to the transfer, and agree to release the non-purchasing Partner from all liability with respect to such loans and other financings not being paid and any collateral (including, but not limited to, any note, letters of credit or guarantees) provided by the non-purchasing Partner is returned or cancelled. (d) The Offeree shall deliver the Election to the Offeror within 90 days after receipt of the Buy-Se11 Offer. Failure of the Offeree to give the Offeror notice of Offeree's Election shall be deemed, upon the expiration of such 90-day period, to be an Election to sell under clause (b)(i), above. (e) All closings of a purchase hereunder shall take place on the date 60 days after Offeree's Election or deemed Election. If the Project is conveyed, under Sections 13.1(b)(iii) or (iv), the Partnership shall convey the Project to the purchasing Partner by a special warranty deed, subject to only those, exceptions which existed on the effective date of this Agreement and such other restrictions, encumbrances, easements, streets and rights-of-way dedicated or created in connection with the development of the Project or the construction of the Improvements and other exceptions to title as may exist [other than liens securing loans, except for loans and other financings to which the Project is to be taken subject to as provided in Section 13.1(c)] which do not materially and adversely affect the ownership or management of the Project. Title insurance premiums, escrow fees and all other, closing costs (other than ad valorem and other, real property taxes which shall be prorated between the Partnership and the purchasing Partner in the usual and customary manner, and other than transfer taxes and recordation fees which shall be allocated one-half to the selling Partner and one-half to the, purchasing Partner) in connection with such conveyance shall be paid by the purchasing Partner. In the case of a conveyance under Sections 13.1 (b) (i) or (ii) all costs of closing shall be paid one-half by the selling Partner and one-half by the purchasing Partner. Closing costs shall not include, however, attorneys' fees or accounting or other professional fees incurred by either Partner (such cost to be paid by the Partner incurring such costs). The purchase price at any closing shall be paid in immediately available funds. (f) Either Partner shall be entitled to enforce its rights under this Article XIII by specific performance. If the offeror defaults under this Article, it shall have no right to make any future Buy-Sell Offer and shall have no right of first offer provided in Section 12.5 hereof. No Buy-Sell Offer may be made until all periods for making elections and performing obligations under any previous Buy-Sell Offer pursuant to this Article XIII shall have terminated. (g) Either Partner may freely assign its rights and obligations pursuant to this Article XIII to any other third party, by delivering notice of such assignment to the other Partner, provided the assigning Partner shall remain primarily liable for any and all of its obligations under this Section 13.1, As if such Partner had not assigned its rights pursuant to this paragraph (g). (h) For purposes of this Section 13.1, Linpro and the Limited Partner shall be treated together as a group or single entity in the same manner as if they were a single Partner. Wherever in this Section XIII any reference is made to Linpro (whether by reference to Linpro, Partner, Offeror, Offeree etc., such reference shall be deemed to mean and refer to the Linpro Group, and Linpro shall have the right, power and authority to act for and on behalf of the Linpro Group without any consent, approval or authorization of any kind whatsoever from the Limited Partner. 13.2. Events of Default. For all purposes of this Agreement, any of the following constitute an Event of Default: (a) the making of an assignment by a General Partner or the benefit of creditors, any General Partner becoming a party, to any liquidation or dissolution action or proceeding, the appointment of a receiver, conservator or liquidator, for a General Partner or for a significant portion of the General Partner's assets and, if any of the. foregoing occur involuntarily, the same is not dismissed, stayed or discharged within ninety (90) days (thirty (30) days in the case of an appointment of a receiver, conservator or liquidator); (b) the filing by a General Partner of a petition in bankruptcy, reorganization, arrangement or composition under any section or chapter of the Federal Bankruptcy Code or any similar law of the United States or any state thereof, or the filing of such a petition against a General Partner which is not vacated within ninety (90) days after the date of filing; (c) the occurrence of any of the events described in clauses (a) and (b) of this Section 13.2 (i) with regard to any parent corporation of PCI; (ii) with regard to more than one of the managing partners of Linpro (as defined in the partnership agreement of Linpro); or (iii) with regard to any general partner of Linpro, if such event has a material adverse effect on the business of the Partnership (including, but not limited to, application of a higher interest rate on Partnership financing or the requirement by any Partnership lender of any additional security or collateral, including letters of credit or guarantees) that would not have occurred but for the occurrence of such event; (d) legal action by a creditor, against a General Partner for a non-Partnership obligation, that creates an encumbrance on the Project or any part thereof (such as the recordation of a judgment of a lis pendens) provided that the same is not fully released or discharged, whether by payment thereof or by filing a bond causing such judgment, lien or other encumbrance to be removed from the Project within thirty (30) days after its imposition, and provided further that the General Partner that is or was the subject of such action by a creditor shall not be in default hereunder if it is diligently and in good faith contesting such matter, by appeal or other means that result in a stay of execution on such encumbrance pending resolution of such contest; (e) the imposition on any General Partner's interest in the Partnership or any distributions of Net Cash Flow or Interim Capital Transaction proceeds, voluntarily or involuntarily or by operation of law, of any material lien, charge, encumbrance or adverse claim, provided that the same is not fully released, or discharged within 90 days after its imposition, and provided further that the General Partner whose Partnership Interest is subject to such material lien, charge, encumbrance or adverse claim shall not be in default hereunder if it is diligently and in good faith contesting such matter and, if in the reasonable judgment of the other Partners, the foreclosure or other sale or transfer of the Partnership Interest subject to the lien, charge, encumbrance or adverse claim is not imminent; (f) an attempted or purported assignment, transfer, sale, disposition, pledge, grant of a security interest or hypothecation of a General Partner's interest in the Partnership without the prior written consent of the other Partners, except as permitted under this Agreement; (g) removal of the Managing Partner for cause pursuant to Section 6.5(b) hereof (other than clause (A)-(C) thereof); (h) the occurrence of any event with regard to any General Partner which would amount to its gross negligence, fraud, malfeasance or knowing violation of applicable laws which materially and adversely affects the Partnership; (i) dilution of a General Partner's Percentage Interest by more than 50% of its original Percentage Interest pursuant to Section 5.2(e) and any subsequent further dilution occurring after such a 50% reduction; and (j) any breach by a General Partner of any other material duty imposed upon it under this Agreement, including but not limited to the failure by either General Partner to fulfill any purchase or sale obligation of such Partner arising pursuant to Sections 13.1 or 13.4 hereof, if such breach has not been cured or the Defaulting Partner has not commenced appropriate action to cure said breach within thirty (30) days following the giving of written notice of such breach by the other Partner or does not thereafter diligently, continuously, and in good faith continue to cure or take action to cure the breach. The General Partner with respect to which any Event of Default described in the foregoing clauses occurs shall be the Defaulting Partner, and the other Partner shall be the Nondefaulting Partner. The occurrence of any of the events described in this section 13.2 to or with regard to the Limited Partner shall not be an Event of Default. 13.3. Rights Upon Event of Default. Upon the occurrence of any Event of Default and for a period of one year thereafter, provided such event (other than removal of the managing Partner for cause) is then continuing, the Nondefaulting Partner may, in addition to and not in exclusion of its remedies available under this Agreement, at law or in equity, elect to exercise any one or more of the following remedies: (a) purchase all (but not less than all) of the Defaulting Partner's Partnership Interest in, accordance with Section 13.4 hereof and, if the Nondefaulting Partner has made such election to purchase the Defaulting Partner's Partnership Interest in accordance with Section 13.4 below, convert the Defaulting Partner to a limited partner as provided in Section 13.5 hereof; or (b) dissolve the Partnership without the consent of the Defaulting Partner. (c) Notwithstanding any other provision of this agreement to the contrary, in the event of any Event of Default to or with regard to Linpro, the Nondefaulting Partner's, remedies under this Section 13.3 and Section 13.4 shall apply to both Linpro and the Limited Partner and Linpro and the Limited Partner shall be treated as a single entity. Any reference in this Section 13.3 or Section 13.4 to Linpro (whether by reference to the name Linpro, or by reference to Defaulting Partner) shall mean and refer to the Linpro Group, and Linpro shall have the right, power and authority to act for and on behalf of the Linpro Group, without any consent, approval or authorization of any kind whatsoever from the Limited Partner. 13.4. Purchase Options. (a) The Nondefaulting Partner may, but shall not be obligated to, purchase all (but not less than all) of the Partnership Interest of the Defaulting Partner by giving such Partner written notice of its intention to do so at any time for a period of. one year after the occurrence of any Event of Default (the Election Notice ) and otherwise complying with the requirements of paragraphs (b) through (f) hereof. (b) Within thirty (30) days of the date of receipt by the Defaulting Partner of the Election Notice, the Partners shall meet and attempt to agree on the Fair Market Value (as defined below) of the Partnership's assets. If the Partners agree on the Fair Market Value of the Partnership's assets within such thirty (30) day period (or such longer period as may be mutually agreed to, in writing, by the Partners), then such agreed upon Fair Market Value shall be set forth in writing and promptly delivered to the Partnership's accountants, and shall be the basis for determining the Purchase Price of the Defaulting Partner's interest in the Partnership for purposes of this Section 13.4. Such Determination of value shall be final and binding upon the Partners for all purposes of this Agreement. If the Partners have not agreed on the Fair Market Value of the Partnership's assets within the thirty (30) day period (or such longer period as has been mutually agreed to,in writing), including a failure to agree arising from a refusal or inability of the Defaulting or Nondefaulting Partner to meet with the other Partner to attempt to agree on such Fair Market Value, then the Fair Market Value of all of the Partnership assets shall be determined in accordance with the appraisal procedure set forth in Section 5.10 hereof. The appraisers shall submit copies of their opinion and determination of the Fair Market Value of all of the Partnership's assets simultaneously both to the Defaulting and Nondefaulting Partners and to the Partnership's accountants, and such determination shall be the basis for determining the Purchase Price of the Defaulting Partner's Partnership Interest for purposes of this Section 13.4. The " Fair Market Value " of the assets of the Partnership shall mean the cash price that a sophisticated purchaser would pay for all the assets of the Partnership on the date of the Election Notice. This Section 13.4(b) for determination by appraisal shall be specifically enforceable to the extent such remedy is available under applicable law, and the determination of Fair market Value hereunder shall be final and binding upon the parties hereto for all purposes of this Agreement. (c) Determination of Purchase Price. Within fifteen (15) days after the determination of the Fair Market Value of the assets of the Partnership, the Partnership's accountants shall determine the amount of cash which would be distributed to the Defaulting Partner in liquidation of its interest in the Partnership if the assets of the Partnership had been sold for the Fair Market Value as of the date of the Election Notice and the proceeds thereof were applied to the payment of all liabilities of the Partnership as of such date and the establishment of reserves for contingent or unforeseen liabilities and the remaining amount were distributed, to the Partners in accordance with Section 8.3 hereof. Such amount is hereinafter referred to as the Purchase Price of the Defaulting Partner's interest in the Partnership. Within fifteen (15) days after the determination of the Fair Market Value of the Partnership's assets, the Partnership's accountants shall give the Partners written notice of the Purchase Price of the Defaulting Partner's interest in the Partnership, along with a summary statement setting forth the calculation thereof (the Accountant's Notice ). The determination by the Partnership's accountants of such amounts (including the determination of the amount to be set aside as or unforeseen liabilities) shall be both the Defaulting and Nondefaulting reserves for contingent conclusive and binding on Partners, except for obvious and merely mathematical errors of calculation. The Partnership shall pay the fees and expenses of the Partnership's accountants incurred or charged for the services described in this Section 13.4. This provision for the determination of the Purchase Price. shall be specifically enforceable to the extent that such remedy is available under applicable law. (d) Closing of Purchase and Sale . The closing of the purchase and sale of the Defaulting Partner's interest in the Partnership shall be consummated through an appropriate escrow within thirty (30) business days following the date of the Accountant's Notice, as provided in Section 13.4(c) above. At such closing, (1) the Defaulting Partner shall transfer to the Nondefaulting Partner or its designee the entire interest of the Defaulting Partner in the Partnership free and clear of all liens, security interests and claims except liens, security interests and claims of the Nondefaulting Partner, and shall deliver to the Nondefaulting Partner or its designee such instruments of transfer, releases and such evidence of the due authorization, execution and delivery and of the absence of any liens, security interests or competing claims as the Nondefaulting Partner or its designee shall reasonably request, and (2) the Defaulting Partner shall receive the Purchase Price, adjusted for the Costs of Transfer (as defined below), in cash. As used herein Costs of Transfer shall mean any prepayment penalties on Partnership financing which become due because of the transfer under this Section 13.4, real estate transfer, sales, and stamp taxes, escrow fees, recording fees, and all other closing costs. Such Costs of Transfer shall not, however, include attorneys' fees or accounting or other professional fees of either party. Such Costs of Transfer shall be paid one-half by the Nondefaulting Partner or its designee and one-half by the Defaulting Partner. The escrow agent shall provide both Partners with a closing statement reflecting (on an itemized basis) the Costs of Transfer. (e) Liabilities . The purchase of the interest of the Defaulting Partner pursuant to this Section 13.4 shall release the Defaulting Partner (and the Nondefaulting Partner shall indemnify the Defaulting Partner) from all liabilities and claimed liabilities of the Partnership incurred after the date of the Election Notice and from all liabilities and claimed liabilities incurred prior to such date except for (i) liabilities not taken into account (or liabilities the full extent of which were not taken into account) in the determination of Purchase Price, (ii) liabilities or losses arising out of the actions of the Defaulting Partner after the date of the Election Notice, and (iii) tort liabilities not covered by insurance for events occurring prior to the Election Notice. The Partners acknowledge that in determining the Purchase Price of the Defaulting Partner's Partnership Interest pursuant to Section 13.4(c) hereof, an amount was or should have been set aside as reserves for contingent or unforeseen liabilities. In the event that such reserved amount ultimately exceeds the amount of any Partnership contingent or unforeseen liabilities (and legal costs incurred in contesting such liabilities) arising during or incurred with respect to the period ending on the date of the Election Notice, the Nondefaulting Partner or its designee shall make an additional payment to the Defaulting Partner equal to its pro rata share of such excess. Payment of such amount shall be made within thirty (30) days after the date the Partnership actually distributes to its Partners the final amounts reserved for contingent and unforeseen liabilities pursuant to the last sentence of Section 8.3 hereof or, if no such reserves are created upon liquidation of the Partnership, within thirty (30) days after the date of final distribution in liquidation of the Partnership. In the event that the amount reserved in determining the Purchase Price is insufficient to satisfy the contingent or unforeseen liabilities that arose during or were incurred with respect to the period ending on the date of the Election Notice (including legal costs incurred in defending or contesting such liabilities), the Defaulting Partner shall continue to be liable for its pro rate share of such liabilities (and legal costs) and shall pay or reimburse the Nondefaulting Partner or its designee or the Partnership as appropriate, within thirty (30), days of demand therefore by the Partnership or the Nondefaulting Partner or its designee, as the case may be. (f) Withdrawal of Defaulting Partner . Upon closing of the purchase of the Defaulting Partner's interest in the Partnership, the Defaulting Partner shall withdraw completely from the Partnership as a Partner. The Nondefaulting Partner or its designee shall succeed to the capital account of the Defaulting Partner as of such date, and the Defaulting Partner shall have no further rights to distributions from the Partnership, and shall not have any other rights of a partner of the Partnership from such date. Both Partners shall execute any and all documents and instruments necessary or incidental to the transfer of the Defaulting Partner's interest in the Partnership, its withdrawal from the Partnership or to effectuate the purpose of this Section 13.4. 13.5. Conversion of a Partner's Interest . (a) The Partners acknowledge that it is in the best interest of the Partnership and all of the Partners to assure that the General Partners are active, solvent and cooperative participants in the Partnership. Accordingly, in the event a General Partner becomes Insolvent or Bankrupt or a Nondefaulting Partner elects to purchase the Partnership Interest of a Defaulting Partner pursuant to Sections 13.3 and 13.4 hereof (the Conversion Event ) then, and in such event, the Partnership shall continue, and (i) the Bankrupt, Insolvent or Defaulting Partner (the Removed Partner ) or its legal representatives, successors or assigns, shall immediately and concurrently therewith cease to have the authority and power of a general partner in the Partnership, and (ii) the Removed Partner or its legal representatives, successors or assigns shall, upon filing in Maryland of the certificate provided for in Section 13.5(b) hereof, become a limited partner hereof. The Removed Partner's (or its successors) Percentage Interest shall be the same as a limited partner as its Percentage Interest as a General Partner but such Partner shall lose all management and/or approval rights hereunder. Notwithstanding the fact that such Removed Partner shall have been converted to a limited partner, such Removed Partner shall remain liable for its contractual obligations under this Agreement, including its obligations to make additional capital contributions pursuant to Section 5.2 hereof, and shall continue to have personal liability for Partnership obligations incurred prior to the date of conversion of its Partnership Interest to the same extent it would have had such liability as a general partner, but shall cease to have personal liability for Partnership obligations incurred on and after the date of conversion of its Partnership Interest except to the extent it is liable for such obligations as a limited partner under Act. (b) Upon the occurrence of the Conversion Event, the other General Partner (the Remaining Partner ) shall be and is hereby irrevocably constituted and appointed as the true and lawful attorney-in-fact for the Removed Partner to make, execute, consent to, swear to, acknowledge, deliver, record and file, in the name, place and stead of each Removed Partner, its legal representatives, successors or assigns, an amendment to the certificate of limited partnership under the laws of the State of Maryland, and under the applicable laws of any other jurisdiction in which the Remaining Partner deems such filing to be necessary or desirable, to reflect the following facts: (i) the Removed Partner is no longer a general partner; (ii) its former general partnership interest has been converted into a limited partnership interest in a like percentage, and (iii) such additional matters relating to the transaction or the identity of the successor limited partners as may be deemed appropriate or necessary by the Remaining Partner. The Partnership shall bear the expense of preparation and filing of the amended partnership agreement and the amended certificate of limited partnership. Additionally, the Removed Partner, its legal representatives, successors or assigns shall execute and deliver to the Partnership such additional documents as may be reasonably requested for the purposes of further documenting or reflecting the conversion of such general partner interest into such limited partner interest, provided, however, that no failure or refusal on the part of the Removed Partner or its successor in interest to comply with this provision shall be construed as a condition to the effectiveness of such conversion. If the Removed Partner is the Managing Partner, the provisions of Section 6.5(b)(ii) shall apply.
SECTION XIV Dissolution and Termination
14.1. Time for Dissolution . The Partnership shall be dissolved and, except as provided in Section 14.2, its business wound up, upon the earliest to occur of: (a) December 31, 2039; (b) Linpro, with the consent of PCI, determining that the Partnership should be dissolved; (c) An election by the Nondefaulting Partner pursuant to Section 13.3(b) hereof to dissolve the Partnership; (d) the Partnership becoming Insolvent or Bankrupt; (e) the last of Linpro or PCI becoming Insolvent or Bankrupt; or (f) the sale of all or substantially all of the Partnership's assets. For the purposes of this Agreement, a Person shall be deemed to be Bankrupt when such Person files a petition in bankruptcy, or voluntarily takes advantage of any bankruptcy or insolvency law, or is adjudicated a bankrupt, or when a petition or answer is filed proposing the adjudication of such Person as a bankrupt and such Person either consents to the filing thereof or such petition or answer is not discharged or denied prior to the expiration of 90 days from the date of such filing. A Person shall be deemed to be Insolvent when such Person shall state by written notice to the. Partners. or any creditor that his or its assets are insufficient to pay his or its liabilities as they arise or when a receiver or trustee is appointed for such Person (whether voluntarily or involuntarily) and, in the case of an involuntary appointment, is not discharged prior to the expiration of ninety (90) days from the date of such appointment. The Bankrupt or Insolvent Partner shall send written notice of the occurrence of any filing of a petition in bankruptcy, the appointment of a receiver or trustee or any other matter which renders, or with the passage of 90 days may render, it Bankrupt or Insolvent to the other Partner within fifteen days of any such event. 14.2. No Release of Liability. It is understood and agreed that no dissolution of the Partnership or Conversion Event shall release or relieve any of the parties hereto of their contractual obligations under this Agreement. 14.3. Disposition of Assets Upon Dissolution. Upon any dissolution of the Partnership, subject to the provisions of Section 13.5 hereof, all assets shall be sold and the proceeds distributed, or the assets distributed in kind if the Partners so elect, to the Partners in the manner and the priority provided for in Section 8.3.
SECTION XV Accounting
15.1. Fiscal Year. The fiscal year of the Partnership shall be the calendar year. 15.2. Books and Records . The Managing Partner shall keep, or cause to be kept, full and accurate records of all transactions of the Partnership in accordance with principles and practices generally accepted, for the cash method of accounting, unless otherwise required by the Code. 15.3. Location of Books of Account; Inspection . All of the books of account of the Partnership shall, at all times, be maintained in the principal office of the Partnership, and shall be open during reasonable business hours for the reasonable inspection and examination by any Partner or its authorized representatives, who shall have the right to make copies thereof. 15.4 . Tax Returns . The Managing Partner shall cause to be prepared, by Deloitte Haskins & Sells, Arthur Andersen & Co. or such other public accounting firm Approved by the General Partners, all tax returns and statements, if any, which must be filed on behalf of the Partnership with any taxing authority, and shall submit such returns and statements to the Partners no later than March 1 of each year, and when Approved by the General Partners, make timely filing thereof. Within sixty (60) days after the end of each fiscal year of the Partnership the Managing Partner shall cause to be delivered to each Partner an unaudited statement setting forth in reasonable detail pertinent information concerning such Partner's distributive share of Partnership income or loss for such year, the distributions of cash made for such fiscal year and such other information as may be reasonably necessary to enable such Partner to prepare and timely file its own tax returns. 15.5. Tax Matters Partner . Linpro is designated as Tax Matters Partner as referred to in Section 6231(a)(7)(A) of the Code.
SECTION XVI Reports and statements
16.1. Annual Partnership Financial Statements . Within 120 days after the end of each fiscal year of the Partnership, the managing Partner shall cause to be delivered to the Partners financial statements certified by the Managing Partner (and certified by an independent certified public accountant if such certification is requested in writing by either General Partner, in which case such certification shall be at the expense of such General Partner, and the Managing Partner may withhold and pay, from cash otherwise distributable to such General Partner pursuant to the provisions of Section VIII an amount sufficient to pay for such certification), prepared at the Partnership's expense, which statements shall set forth as of the end of and for such fiscal year, the following: (a) a profit and loss statement and a balance sheet of the Partnership accompanied by appropriate notes or other detail, statements or schedules; (b) the balances in the capital accounts of each Partner; and (c) such other information, as in the judgment of the Managing Partner, shall be reasonably necessary for any Partner to be advised of the results of operations of the Partnership. 16.2. Partner Financial Statements. Within one hundred twenty (120) days following the end of each Partner's fiscal year, PCI and each managing partner of Linpro (as defined in the partnership agreement of Linpro) shall provide year end financial statements for such Partner, certified to by the Chief Financial officer of such Partner or the corporate parent of such Partner. 16.3. Semi-Annual Reports . Within ninety (90) days after the end of each semi-annual period of the Partnership, the Managing Partner shall cause to be delivered to the Partners a report of the state of the business and affairs of the Partnership for such semi-annual period which report shall set forth, as of the end of such semi-annual period, the following: (a) a cash flow statement of the Partnership reflecting the Partnership's revenues and expenses; (b) a statement comparing current revenues, profit, loss and operating expenses to any appropriate Budget; (c) a balance sheet showing assets and liabilities; (d) a narrative report on the status of construction and any other factors of significance to the Partners; and (e) such other information as in the judgment of the Managing Partner shall be reasonably necessary for the Partners to be advised of the financial status and results of operations of the Partnership.
SECTION XVII Bank Accounts
The Managing Partner may open and maintain one or more bank accounts at a bank or banks located in the Washington, D.C. metropolitan area in the name of the Partnership in which shall be deposited all funds of the Partnership. Withdrawals from such account or accounts shall be made only in accordance with this Agreement upon the signature or signatures of such person or persons as the Managing Partner shall designate. The Partners acknowledge and agree that funds of the Partnership may be withdrawn from one or more of its accounts and deposited in a central account in the name of an entity affiliated with the Managing Partner, so long as such funds do not exceed the amount of costs and expenses previously Approved by the General Partners as costs and expenses which will be deposited in such affiliated account (which costs and expenses shall not include payments to the Partnership's general contractor or any Partnership lender, which amounts shall be paid directly out of Partnership accounts) and so long as separate entries are made on the books and records of the Partnership and on the books and records of such other affiliated entity reflecting that deposits in the bank account of such entity with respect to amounts received from the Partnership have been deposited therein for the account of the Partnership and that withdrawals from such bank account have been made for the purpose of disbursing funds to the Partnership or for the purpose of paying costs, expenses or liabilities of the Partnership.
SECTION XVIII Notices
Whenever any notice is required or permitted to be given under any provision of this Agreement, such notice shall be in writing, signed by or on behalf of the person giving the notice, and shall be deemed to have been given when delivered by personal delivery or on the third (3rd) business day after it is mailed by certified mail, postage prepaid, return receipt requested, addressed to the person or persons to whom such notice is to be given as follows (or at such other address as shall be stated in a notice similarly given): (a) If to Linpro, or the Limited Partner, such notice shall be given at:
			The Linpro Company 1717 Elton Road, Suite 211 Silver Spring, MD 20903 Attention: Mr. John Chirtea; and Mr. Eric Eichler
		With a copy to
			Jones, Day, Reavis & Pogue Metropolitan Square 1450 G Street, N.W. Washington, D.C. 20005-2088 Attention: Sigmund T. Weiner, Esq.
		(b) If to PCI, such notice shall be given at
			Potomac Capital Investment Corporation Suite 600 900 19th Street, N.W. Washington, D.C. 20006 Attention: Mr. Frank J. Spingler
		With a copy to
			Hazel & Thomas, P.C. Suite 400 2001 Pennsylvania Avenue, N.W. Washington, D.C 20006 Attention: Stanley A Levine, Esq.
provided, however, all Partners shall at all times provide an address within the continental United States.
SECTION XIX Defined Terms
19.1. Defined Terms . As used in this Agreement, the following, terms have the following respective meanings, unless the context clearly requires otherwise: " Accountant's Notice" . As defined in Section 13.4(c) of this Agreement. " Act" : As defined in Section 1.1 of this Agreement. " Adiusted Capital Account Deficit" : With respect to any Partner, the deficit balance, if any, in such Partner's capital account as of the end of the relevant fiscal year, after giving effect to the following adjustments: (i) Credit to such capital account any amounts which such Partner is obligated to restore or is deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulation Sections 1.704-lT(b)(4)(iv)(f) and (h)(5) or any successor provisions thereto; and (ii) Debit to such capital account the items described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), .(d)(5) and (d)(6), or any successor provisions thereto. The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) or any successor provision thereto and shall be interpreted consistently therewith. " Affiliate" : With regard to any Person, (a) any partner or shareholder in such Person or any partner in any partner in such Person; (b) any member of the immediate family of (i) any such Person, (ii) any partner in such Person, (iii) any partner in any partner in such Person or (iv) any Person described below in clause (c) of this definition; (c) any Person which controls, is controlled by or is under common control with (i) such Person, (ii) any partner or shareholder in such Person or (iii) any partner in any partner in such Person, or any Person that is controlled by the same Persons that shall then control such Person or any partner in such Person or any partner in any partner in such Person. As used herein, the term immediate family shall mean the spouse, ancestors, lineal descendants, brothers, sisters, nieces, nephews, aunts, uncles, spouses of any of them, and trusts established for the benefit of any of them. As used herein, the term control, controlled by and under common control with shall include the ownership of ten percent (10%) or more of the beneficial interest in the person referred to. " Agreement" : This Limited Partnership Agreement as amended. from time to time, together with the exhibits attached hereto. "Annual Budget" : As defined in Section 10.1 of this Agreement. " Approved by the Partners ," " Approval of the General Partners" or " Approved" or " Approval" : The unanimous approval of the General Partners in accordance with Section 6.3 of this Agreement, as evidenced by the written consent of one Representative of each Partner or by written minutes of a meeting of the Partners approved or deemed approved in accordance with Section 6.3 hereof. " Base Lending Rate" : The rate of interest identified as the Prime Rate in the money rates column published each day in The Wall Street Journal and defined therein as the base rate on corporate loans at large U.S. money center commercial banks. If The Wall Street Journal should cease publishing such rate, then the Prime Rate shall mean and refer to the rate of interest announced from time to time by The Riggs National Bank of Washington, D.C., or its successor, as its prime interest rate base lending rate, index rate or other reference rate, as the case may be, for commercial lending transactions (or the first of those listed above if more than one is announced). Any change in the interest rate resulting from a change in the Prime Rate shall be effective without notice to any party on the date of such change. " Book-up Amount" : As defined in Section 5.3 of this Agreement. Book Basis" : With respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (a) The initial Book Basis of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset; (b) The Book Basis of all Partnership, assets shall be adjusted to equal their respective gross fair market values, as determined by the Partners, or if the Partners are unable to agree, in accordance with the appraisal procedures set forth in Section 5.10, as of the following times: (a) the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis capital contribution or the distribution by the Partnership to a Partner of more than a de minimis amount of cash or Partnership property as consideration for an interest in the Partnership; and (b) the liquidation of the Partnership within the meaning of Treasury regulation Section 1.704-1(b)(2)(ii)(g). (c) The Book Basis of any Partnership asset distributed to any Partner shall be the gross fair market value of such asset on the date of distribution, as determined by the Partners, or if the Partners are unable to agree, in accordance with the appraisal procedures set forth in Section 5.10; and (d) The Book Basis of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Section 743 (b) but only to the extent that such adjustments are taken into account in determining capital accounts pursuant to Treasury regulation section 1.704-1(b) (2) (iv) (m); provided, however, that Book Basis shall not be adjusted pursuant to this subparagraph (d) to the extent that the Managing Partner determines that an adjustment pursuant to subparagraph (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d). If the Book Basis of any asset has been determined or adjusted pursuant to subparagraphs (a), (b) or (d) hereof, such Book Basis shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses. " Budget" : one, more or all of any Annual Budget or other budget Approved by the General Partners. " Building Partnership Agreement" : That certain General Partnership Agreement of Harmans Building Associates dated as of December __, 1990, by and between the Partnership (or its successors and permitted assigns) and PCI. " C&P" : As defined in Section III of the Building Partnership Agreement. " C&P Lease" : As defined in Section III of the Building Partnership Agreement. " C&P Property" : That certain parcel of real property known as Lot 3, containing approximately 14.36 acres, as shown on Plat 2 of 4 in the Subdivision known as Linpro-Harmans per Administrative Subdivision Plat recorded in Plat Book 128, Page 29. in the Land Records of Anne Arundel county, Maryland and located in an existing industrial park known as Linpro Harmans Subdivision, at Harmans Road immediately south of Dorsey Road in Anne Arundel County, Maryland, as more particularly described on Exhibit B attached hereto and by this reference made a part hereof. " Code" : The Internal Revenue Code of 1986, as amended. " Contribution Interest ": Except as adjusted pursuant to Section 5. 2 (d) hereof, fifty percent (50%) in the case of PCI and fifty percent (50%) in the case of Linpro. Any reduction or increase in a Partner's Percentage Interest pursuant to the terms of this Agreement shall result in an equal reduction or increase in such Partner's Contribution Interest. " Costs of Transfer" : As defined in Section 13.4(d) of this Agreement. "Date of Default" : As defined in Section 5.2 (d) of this Agreement. " Deadlock" : As defined in Section 13.1 of this Agreement. " Defaulting Partner" : The Partner described as a defaulting Partner pursuant to Sections 5.2(d) or 13.2 hereof, as the case may be. " Deficit" : As defined in Section 5.2(b) of this Agreement. " Deficit Contribution" : A contribution made pursuant to Section 5.2(d)(i) hereof. " Deficit Contribution Account" : As defined in Section 11.1 of this Agreement. " Deficit Contribution Preferred Return" : The preferred return described in Section 11.1(c) of this Agreement. " Depreciation" : With respect to any Partnership asset for each fiscal year or other period of the Partnership, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to such asset for such year or other period, except that, if the Book Basis of such asset at the beginning of such year or other period differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation for such year or other period shall be an amount that bears the same ratio to such beginning Book Basis as the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period is zero, Depreciation for such year or other period shall be determined with reference to such beginning Book Basis using any reasonable method selected by the Partners. " Development Property" : It: All of the property known as Linpro Harmans Property per Administrative Subdivision Plat recorded in Plat Book 128, Pages 29-32 in the Land Records of Anne Arundel County, Maryland and located in an existing industrial park known as Linpro Harmans Subdivision, all as more particularly described on Exhibit " A " attached hereto and by this reference made a part hereof. " Election Notice" : As defined in Section 13.4(a) of this Agreement. " Event of Default" : As defined in Section 13.2 of this Agreement. " Fair Market Value" : As defined in Section 13.4(b) of this Agreement. " General Partners" : Linpro and PCI, or their successors and permitted assigns. " Improvements" : The Site Improvement together with any other improvement to the Property Approved by the General Partners. " Indemnitee" : Any Partner, any partner of a Partner, and any officer, director, shareholder or employee of any Partner or partner of a Partner. " Interim Capital Transaction" : A sale, financing, refinancing or other transaction which, according to generally accepted accounting practices, is attributable to capital but which does not result in the dissolution and winding up of the Partnership. " Key Persons" : As to each General Partner, those persons designated under the name of such General Partner on Exhibit " B ". Each General Partner may make any changes, additions and deletions to its list of Key Persons, provided that any new or replacement person appointed by a General Partner as a Key Person is approved by the other General Partner in its reasonable discretion. " Linpro" : Linpro Harmans Land Associates Limited Partnership, a Delaware limited partnership, its successors or permitted assigns. " Limited Partners" : Eric Eichler, or his successors and permitted assigns. " Linpro Group" : Linpro and the Limited Partner together, or their successors and permitted assigns. " Managing Partner" : Linpro, or its successors or permitted assigns, and any other Partner who becomes a Managing Partner pursuant to the provisions of section 6.5 of this Agreement. " Market Cost Recovery Fee" : As defined in section 9.3 of the Agreement. " Net Cash Flow" : For any period for which such amount is being computed, (a) Operating Revenues of the Partnership during such period, minus (b) the operating Expenses of the Partnership during such period. " Nondefaulting Partner" : The Partner described as a nondefaulting Partner in Sections 5.2(d) or 13.2 hereof as the case may be. " Nonrecourse Deductions" : As defined in Treasury Regulation Section 1.704-1T(b)(4)(iv)(a). " Operating Expenses" : For any period for which such operating Expenses are being determined, the sum of the total gross expenditures of the Partnership for operations during such period, including (a) all cash operating expenses (including all management fees and other fees, expenses and allowances paid to any Partner, (b) all debt service payments of the Partnership (other than out of the proceeds of any Sale or loan and excluding payments of the Deficit Contribution Accounts), (c) all expenditures by the Partnership which are treated as capital expenditures (as distinguished from expense deductions) under generally accepted accounting practices, (d) real estate taxes, personal property taxes and sales taxes and (e) deposits to the Reserve Account; provided, however, that operating Expenses shall not include any payments or expenditures to the extent the sources or funds used for such payment or expenditure are not included in Operating Revenues. " Operating Revenues" : For any period for which such Operating Revenues are being determined, the sum of the total gross revenues of the Partnership from operations received by the Partnership during such period, including all receipts of the Partnership from (a) rent, additional rent and percentage rent paid to the Partnership (including for parking facilities), (b) concessions, (c) rent or business interruption insurance, if any, (d) funds deposited into the Partnership operating account to the extent such funds are withdrawn from the Reserve Account as a result of reductions in such reserves, (e) reimbursements of expenses paid by the Partnership which are to be borne by others, (f) deposits in the event of a forfeiture thereof to the Partnership, and (g) other revenues and receipts realized by the Partnership from operations and customarily included in net cash flow; but shall not include advanced rentals paid (until such time as they are earned by the Partnership), insurance loss proceeds (except for any proceeds from business or rental interruption insurance), proceeds or funds from Interim Capital Transactions and the sale or other disposition of Partnership assets following the dissolution of the Partnership. " PCI" : Potomac Capital Investment Corporation, a Delaware corporation, or its permitted successors and Assigns. " PCI Additional Capital Contributions" : As defined in Section 5.1(c) of this Agreement. " Partially Adjusted Capital Account" : With respect to any Partner for any fiscal year of the Partnership, the Capital Account of that Partner at the beginning of that fiscal year, adjusted for all contributions and distributions during such fiscal year and all special allocations pursuant to Section 7.3 with respect to that fiscal year and by assuming that amounts distributable with respect to that fiscal year pursuant to this Agreement (other than incident to liquidation) are distributed in that fiscal year (and that such amounts are not taken into account again when they are actually distributed), but before giving effect to any allocations of Profits or Losses pursuant to Section 7.1. " Partner Minimum Gain" : The minimum gain attributable to Partner Nonrecourse Debt, as defined in Treasury Regulation Section 1.704-1T(b)(4)(iv)(h). " Partner Nonrecourse Debt" : As determined in accordance with Treasury Regulation Section 1.704-lT(b)(4) (iv) (h) or any successor provision thereto. " Partner Nonrecourse Deductions" : As defined Treasury Regulation Section,1.704-1T(b)(4)(iv)(h). " Partners" : Linpro, PCI and the Limited Partner, or their successors and permitted assigns. " Partnership" : The limited partnership continued pursuant to this Agreement. " Partnership Interest" : For each Partner separately, all of that Partner's rights in connection with the Partnership, including, but not limited to such Partner's Percentage Interest in the Partnership, rights in specific Partnership property, if any (including, but not limited to, contract rights), rights to participate in the management of the Partnership, rights to distributions, reimbursements or other payments, rights to Profits, Losses and other allocations and all other rights of such Partner under this Agreement and the Partnership Act. " Partnership Minimum Gain" : The gain that would be recognized by the Partnership for federal income tax purposes if property of the Partnership which is security for nonrecourse debt of the Partnership were foreclosed upon and such property were transferred to the creditor in satisfaction of such debt, as determined under Treasury Regulation Section 1.704-1T(b)(4)(iv)(c) or any successor provision thereto. " Percentage Interest" : Except as adjusted pursuant to Section 5.2(d) hereof, fifty percent (50%) in the case of PCI, forty-nine and 50/100s percent (49.5%) in the case of Linpro and one-half of one percent (0.5%) in the case of the Limited Partner. " Person" : Any individual, partnership, limited partnership, foreign limited partnership, joint venture, trust, estate, corporation, joint stock company, association, custodian, trustee, executor, administrator, nominee or other entity, in its own or a representative capacity. " Preferred Return" : As to each Partner separately and as of any date, an amount equal to a nine and one-half percent (9-50%) cumulative Preferred return per annum (but compounded monthly) on the Unrecovered Capital Account of such Partner; provided, however, that for purposes of determining Linpro's Preferred Return, Linpro's Unrecovered Capital Account shall not include its initial Five Hundred and Fifty Thousand Dollar balance of such account at the time this is executed, and shall be computed only with respect to additional capital contributions made by Linpro pursuant to Section 5.2(b) hereof. " Profits" or " Losses" : For each fiscal year or other period, an amount equal to the Partnership's taxable income or loss for such year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or lots), with the following adjustments: (a) any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss; (b) any expenditures of the Partnership described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted from such taxable income or loss; (c) in the event the Book Basis of any Partnership asset is adjusted pursuant to subparagraphs (b) or (c) of the definition of Book Basis, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses and allocated in accordance with Section VII hereof; (d) gain or loss resulting from any disposition of Partnership assets with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Basis of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Book Basis; (e) in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year or other period, computed in accordance with the definition of Depreciation contained herein; and (f) any items of income, gain, deduction and loss allocated , pursuant to Section 7.3 shall not be taken into account in determining Profit and Loss. " Project" : The Property, together with the Improvements constructed on the Property, if any. " Property ": All of the Property except the C&P Property, all as is more particularly described on Exhibit II-C attached hereto and by this reference made a part hereof. " Purchase Price" : As defined in Section 13.4(c) of this Agreement. "R elated Entity : Any other Person in which the Partnership owns an interest. " Removed Partner" : As defined in Section 13.5 of this Agreement. " Representatives" : As defined in Section 6.3(c) hereof. " Reserve Account" : As defined in Section 9.2. " Sale" : The sale or condemnation of all or any portion of the Property or the Project. " Section 704(b) Regulations" : The final income tax regulations under Section 704(b) of the Code relating to the determination of a Partners' distributive share of partnership income, gain, loss, deduction or credit (or item thereof), and any outstanding proposed income tax regulations under Section 704 (b) of the Code. " Site Improvements" : As defined in Section III of this Agreement. " Special Account" : With regard to Linpro an amount equal to the excess, if any, of (a) $275,000 over (b) the sum of all amounts theretofore distributed to Linpro pursuant to Sections 8.2(e) or 8.3(e). " Target Account" or " Target Capital Account" : With respect to any Partner for any fiscal year of the Partnership, a balance (which may be either positive or negative) equal to (i) the hypothetical distribution that Partner would receive if all Partnership assets (including cash) were sold for cash equal to their Book Basis (taking into account any adjustments to Book Basis for that fiscal year), all Partnership liabilities were satisfied to the extent required by their terms (limited, with respect to each Partnership nonrecourse liability, to the Book Basis of the assets securing such liability) and all net assets of the Partnership (including the proceeds from the disposition) were distributed in full pursuant to Section 8.2 hereof, all as of the last day of the fiscal year, reduced by (ii) that Partner's share of Partnership minimum Gain and Partner Minimum Gain as determined pursuant to Treasury Regulation Section 1.704-1T(b)(4)(iv) immediately prior to the hypothetical sale. " Unrecovered Capital Account" : As to each Partner separately and as of any given time, an amount equal to the excess, if any, of (a) the aggregate amount of the capital contributions made by such Partner to the Partnership pursuant to Article V hereof (other than Deficit Contributions, but including, in the case of Linpro, the Five Hundred and Fifty Thousand Dollar balance in its Capital Account existing immediately after execution of this Agreement) over (b) the sum of all amounts theretofore distributed to such Partner pursuant to Sections 8.1(c), 8.2(c) and 8.3(c). 19.2. Accounting Terms . Except as otherwise specifically provided herein, all terms herein which relate to accounting matters shall be interpreted in accordance with generally accepted accounting practices. 19.3. Additional Terms. capitalized terms used in this Agreement and not defined in Section 19.1 hereof shall (unless otherwise expressly provided herein) have the meanings assigned to them in other portions of this Agreement.
SECTION XX Miscellaneous
20.1. Binding Effect . Except as herein otherwise provided to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. 20.2. Amendments. No amendment, modification or waiver of this Agreement, or any part hereof, shall be valid or effective unless in writing and signed by Linpro and PCI. 20.3. A pplicable Laws. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland. 20.A. Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument which may be sufficiently evidenced, by one counterpart. 20.5. Waiver . No consent or waiver, either expressed or implied, by any Partner to or of any breach or default by any other Partner, in the performance by such other Partner of the obligations thereof under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Partner of the same or any other obligations of such other Partner under this Agreement. Failure on the part of any Partner to complain or to pursue complaints with respect to any acts or failure to act of any other Partner, or failure on the part of any Partner to declare any other Partner in default, irrespective of how long such default continues, shall not constitute a waiver by such Partner of the rights and remedies thereof under this Agreement or otherwise at law or in equity. 20.6. Additional Acts . In connection with this Agreement, as well as all transactions contemplated by this Agreement, each Partner agrees to execute and deliver such additional documents, instruments and take all such necessary action and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions. 20.7. Construction . The headings and titles of the Sections, Sub-sections and Paragraphs herein have been inserted as a matter of convenience of reference only and shall not control or affect the meaning or construction of any of the terms or provisions herein. 20.8. Gender . Whenever the context shall so require, all words herein in any gender shall be deemed to include the masculine, feminine, or neuter gender, and all singular words shall include the plural, and all plural words shall include the singular. 20.9. Legal Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. Furthermore, in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. 20.10 . Prior Agreement Superseded . This Agreement supersedes any prior understanding or written or oral agreements between the parties respecting the within subject matter and contains the entire understanding between the parties with respect thereto. 20.11 . This Agreement. The words herein, hereof, hereunder, hereby, this Agreement and other similar reference shall be construed to mean and include this Agreement and all amendments thereof and supplements thereto unless the context should clearly indicate or require otherwise. 20.12 . Non-Exclusive Remedies . Except as otherwise provided herein, no remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to every such remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. It is expressly agreed that the remedy at law for breach by any of the parties for its obligations hereunder is inadequate in view of the complexities and uncertainties in measuring the actual damages which would be sustained by reason of either party's failure to comply fully with each of such obligations. Accordingly, the obligations of each party hereunder are expressly made enforceable by specific performance. 20.13 . No Third Party Beneficiary Rights . This Agreement is made solely and specifically between and for the benefit of the parties hereto, and their respective successors and assigns, subject to the express provisions hereof relating to successors and assigns, and no other person, individual, corporation or entity, whatsoever, shall have any rights, interests or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party, beneficiary or otherwise. 20.14. Exhibits . All exhibits, attachments, annexed instruments and addenda referred to herein shall be considered a part of this Agreement as fully as if and with the same force and effect as if such exhibit, attachment, annex or addendum had been included herein in full. 20.15 . General Representations. Each of the Partners repress and warrants to the other Partner that (a) the execution, delivery and performance of this Agreement and its ancillary documents attached hereto as Exhibits (Ancillary Documents) have been duly and validly authorized by all necessary action, corporate or otherwise, on the part of it, (b) the execution, delivery and performance of this Agreement and Ancillary Documents will not result in a breach or violation of or a default under its articles of incorporation or partnership agreement, or under any loan or other agreement or instrument by which it or any of its properties is bound or under any statute, rule, regulation, order or other law to which it or any of its properties is subject, (c) this Agreement and those Ancillary Documents to which it is a party are legal, valid and binding obligations of it, enforceable against it in accordance with their terms and conditions, (d) it is a legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of formation and has all necessary power and authority to own its property and carry on its business as presently conducted (including in the manner contemplated by this Agreement and Ancillary Documents) and is duly qualified to do business and is in good standing in all jurisdictions which the ownership or use of its property or its activities presently make such qualification necessary, except for such jurisdictions in which the failure to be so qualified or in good standing would not materially impair its obligations pursuant to this Agreement, (e) all authorizations, approvals and consents, if any, required to be obtained from, and all registrations, declarations and filings, if any, required to be made with, all governmental authorities and regulatory bodies and all other persons or entities to permit it to execute and deliver, and to perform its obligations, under this Agreement and Ancillary Documents have been obtained or made and all such authorizations, approvals, consents, registrations, declarations and filings are in full force and effect, and all terms and conditions contained in or existing in respect of, such authorizations, approvals, consents, registrations, declarations and filings, have, to the extent necessary prior to the date of execution and delivery hereof and thereof, been duly satisfied and performed, (f) neither it nor any of its partners or shareholders in the hands of a receiver or has committed an act of bankruptcy, and (g) there are no judgments, orders, or decrees of any kind against it unpaid or unsatisfied of record nor any legal action, suit or other legal or administrative proceeding pending before any court or administrative agency which would have a material adverse effect on its financial condition. 20.16 . Representations by Linpro . Linpro and the Withdrawing Partners hereby jointly and severally represent and warrant to PCI that (a) there are no contract, tort, tax or other claims, debts, obligations or liabilities of the Partnership or associated with the Property (excluding, however, environmental liabilities) incurred or arising prior to the date hereto and (b), to the best of their knowledge, there are no environmental claims, debts, obligations or liabilities of the Partnership or associated with the Property incurred or arising prior to the date hereof, other than the debt owed to the Bank of New England N.A, the obligations described in the C&P Lease and the Omni Construction Contract and those described in Exhibit H attached hereto. The representations and warranties given herein shall survive the formation and termination of the Partnership. 20.17 . Language . The language used in this Agreement shall be deemed to be the language chosen. by the Partners to express their mutual intent, and no rule of strict construction shall be applied against any Partner. 20.18 . Confidentiality . Each Partner shall keep confidential and not use or disclose to others and shall use its best efforts to prevent any of its employees, former employees, agents and representatives from using or disclosing, without the prior written consent: of the other Partners, any information or data which both (i) pertains to this Agreement, any negotiations pertaining thereto, any of the transactions contemplated hereby or the business of the Partnership and (ii) the other Partner hereto has labeled in writing as confidential or proprietary; provided , however , that nothing in this Section 20.18 shall apply to any information or data (a) which the Partner in question can show is known to the public or which hereafter becomes known to the public other than by its acts or omissions; or (b) the disclosure of which, is required by securities, accounting or other applicable laws or regulations; or (c) which it could show was already in its possession prior to receipt from the other Partner. Nothing in this Section 20.18 shall expand or contract the rights or obligations of either Partner with respect to any information previously provided to such Partner pursuant to any other confidentiality agreement. The provisions of this Section 20.18 shall survive the termination of this Agreement and the liquidation of the Partnership. 20.19. Limitation of Liability . Notwithstanding anything in this Agreement to the contrary, in no event shall the Partnership or PCI have recourse against (i) the principal personal residences of any partner of Linpro or (ii) any other assets of Linpro or any partner of Linpro (an Obligor ) except those business assets of such Obligor at the time of enforcement of such Obligor's obligations under this Agreement then comprising or relating to the group of entities and properties commonly known as or operating under The Linpro Company name. The assets referred to in clause (ii) of the preceding sentence, which are intended to be subject to execution upon any judgment obtained by PCI in enforcement of such Obligor's obligations, shall include receivables from, and ownership interests or other investments in, partnerships, corporations or other entities known as or operating under The Linpro Company name. 20.20 . Power of Attorney and Death of a Limited Partner. (a) The death, insanity, bankruptcy or insolvency of a Limited Partner shall not dissolve, terminate or cause the winding up of the Partnership. In such event, the executor, administrator, assignee, trustee, receiver, committee or other legal representative of such Limited Partner shall succeed to the rights of such Limited Partner to receive allocations and distributions hereunder, and may be admitted into the Partnership as a substitute limited partner in the place instead of such Limited Partner in accordance with the provisions of Article XIII. Any Transfer by such executor, administrator, assignee, trustee, receiver, committee or other legal representative of all or any part of the interest of such Limited Partner. shall be governed by the provisions of Article XIII. (b) The Limited Partner hereby irrevocably makes, constitutes and appoints Linpro and each of its general partners, as its true and lawful attorney-in-fact, with full power of substitution and resubstitution, in its name, place instead, to make, sign, execute, endorse, negotiate, consent to, deliver, acknowledge, swear to, file and record with respect to the Partnership: (a) such certificates of limited partnership and such amended certificates of limited partnership as may be required by law or pursuant to the provisions of this Agreement, and such other documents, applications or certificates required to qualify to do business in any jurisdiction where such qualification is deemed reasonably necessary by Linpro; (b) all amendments to this Agreement; (c) a certificate of cancellation of the Partnership and such other documents, applications or certificates which may be required to effectuate the dissolution, termination and winding up with the Partnership pursuant to the provisions of this Agreement; (d) any and all other documents, instruments, applications or certificates as Linpro may deem necessary or desirable to carry out fully the provisions of this Agreement. It is expressly understood, intended and agreed by the Limited Partner, for itself, its administrators, legal representatives, successors and assigns that (i) the grant of this power of attorney is irrevocable and is coupled with an interest by reason, of the fact, among other, that Linpro is relying and will be relying on its power as contemplated by these provisions, and that Linpro would not have entered into this Agreement where it not for the powers granted to it by these provisions and Linpro has rights in the Partnership property which this power is needed to protect, and (ii) the grant of this power of Attorney shall survive the subsequent, legal incompetency, disability, incapacity, bankruptcy, insolvency or withdrawal of the Limited Partner or the assignment of its interest in the Partnership or the insolvency, bankruptcy or dissolution of the Partnership. IN WITNESS WHEREOF, the parties hereto have. executed this Partnership Agreement as of the day and year first above written.
				LINPRO: LINPRO HARMANS LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership By: /s/ John A. Berry John A. Berry (Name) General Partner (Title) By: /s/ John Chirtea John Chirtea (Name) General Partner (Title)
THE DISTRICT OF COLUMBIA) BEFORE ME, the undersigned authority, on this day personally appeared John Chirtea , general partners of LINPRO, HARMANS LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership, known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledged to me that the same was the act of said partnership, and that they executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 30 ^th day of December , 1990.
				Notary Public in and for The District of Columbia
My commission expires: My Cmm Exps Jan. 14,1992
				PCI: POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation By: /s/ F. J. Spingler F. J. Spingler (Name) Vice President - Real Estate Title)
The District of Columbia BEFORE ME, the undersigned uthority, on this day personally appeared F.J. Spingler , a VICE PRESIDENT/REAL ESTATE of Potomac Capital Investment Corporation, a Delaware corporation, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of said corporation, and that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 30 ^TH day of December , 1990.
				Notary Public in and for The District of Columbia
My commission expires: My Cmm Exps Jan. 14,1992
				LIMITED PARTNER: /s/ Eric Eichler Eric Eichler
THE STATE OF PENNSYLVANIA) ) COUNTY OF CHESTER )
BEFORE ME, the undersigned authority, on this day personally appeared Eric Eichler, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same as his free and voluntary act, for the purposes and consideration therein expressed, in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 9th day of January, 1990.
				Notary Public in and for Chester Count, PA
My commission expires: My Cmm Exps June 6,1994
				WITHDRAWING PARTNERS: Irrevocable Trust of Jay G. Cranmer By: /s/ Gerard H. Sweeney Gerard H. Sweeney (Name) Trustee Title)
THE STATE OF PENNSYLVANIA) ) COUNTY OF CHESTER )
BEFORE ME, the undersigned authority, on this day personally appeared Gerard H. Sweeney, Trustee of the Irrevocable Trust of Jay G. Cranmer, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same as his free and voluntary act for the purposes and consideration therein expressed, in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 28 ^TH day of December , 1990.
				/s/ Joanne L. Cushman Notary Public in and for Chester County, PA
My commission expires: My Cmm Exps May 16,1992
				WITHDRAWING PARTNERS: By: /s/ Gerard H. Sweeney Jay G. Cranmer by Gerard H. Sweeney, Attorney-in-Fact
THE STATE OF PENNSYLVANIA) ) COUNTY OF CHESTER )
BEFORE ME, the undersigned authority, on this day personally appeared Gerard H. Sweeney as Attorney-in-Fact for Jay G. Cranmer, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same as his free and voluntary act for the purposes and consideration therein expressed, in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 28 ^TH day of December , 1990.
				/s/ Joanne L. Cushman Notary Public in and for Chester County, PA
My commission expires: My Cmm Exps May 16,1992
				WITHDRAWING PARTNERS: Irrevocable Trust of Jay G. Cranmer By: (Name) (Title) /s/ John A. Berry JOHN A. BERRY JAY G. CRANMER J. Patrick Armstrong J. PATRICK ARMSTRONG /s/ Peter P. Dilullo PETER P. DILULLO /s/ John Chirtea JOHN CHIRTEA /s/ Kurt Eichler KURT EICHLER /s/ Denise E. Wood DENISE E. WOOD /s/ Eric Eichler DAVID J. EICHLER by Eric Eichler Attorney-in-Fact LINPRO MARYLAND ADMIN PARTNERS LIMITED PARTNERSHIP By: /s/ John A. Berry (Name) (Title)
				Exhibit A to the Partnership Agreement
DEVELOPMENT PROPERTY DESCRIPTION See Page 61.
				Exhibit B to the Partnership Agreement
C&P PROPERTY DESCRIPTION See Page 59.
				Exhibit C to the Partnership Agreement
PROPERTY DESCRIPTION See Page 66.
					Exhibit D to the Partnership Agreement
PARTNER REPRESENTATIVES AND KEY PERSONS
LINPRO: Name Address Mark S. Corneal Suite 211 John Chirtea 1717 Elton Rd. John A. Berry Silver Spring, MD 20903 PCI: Frank J. Spingler Suite 600 Eileen Hallquist 900,19th St., N.W. Washington, D.C. 20006
					Exhibit E to the Partnership Agreement
INSURANCE COVERAGE
Type Limits Deductible Property Damage Maximum $60,000,000 $ 5,000 per occurrence General Liability $2,000,000 aggregate -0- $1,000,000 per occurrence Excess Liability Up to $55,000,000 in -0- addition to primary General Liability Excess Umbrella Up to $5,000,000 in $25,000 Liability addition to primary General Liability Workers Compensation Statutory $1,000,000 -0- Above coverage are blanket policies for The Linpro Company. The Partnership would be insured under each policy with the Partnership and/or any lender named as additional insured. Policies are renewed on an annual basis. Note that certain exclusions exist within each policy that affect the limits listed.
EXHIBIT F Reimbursable Pre-formation costs
Engineering and Geotechnical $ 5,300 Real Estate Taxes 8,872 $14,172
EXHIBIT G Initial Budget
Land-release from BNE $250,000 Engineering & Geotechnical 16,000 Partnership Legal and Closing (for future lot sales) 25,000 Permits/LC Fees 2,000 Real Estate Taxes 9,000 Accounting, Computer and Tax Charges 6,000 Hard costs: Omni Contact: Water and Sewer 83,580 SWM 25,000 Fee @ 6.5% 7,058 Gas and Electric Service 12,000 Marketing 4,000 Contingency 10,362 TOTAL LAND BUDGET $450,000
					Exhibit H to the Partnership Agreement
PARTNERSHIP LIABILITIES
1. Agreement, dated July 19, 1990, between Linpro Harmans Land Limited Partnership and Trotter Kent, Inc., relating to the construction of road improvements.

CERTIFICATE OF LIMITED PARTNERSHIP LLP OF LINPRO HARMANS LAND LIMITED PARTNERSHIP
This certificate of Limited Partnership ("Certificate") is made as of the 1 ^st day of June, 1988. 1. Name The name of the partnership is Linpro Harmans Land Limited Partnership. 2. Registered Office and Registered Agent. The name of the Registered Agent and its address and the address of the Registered Office of the Partnership for service of process is: The Linpro Company Three Christina Centre 201 North Walnut Street Suite 1001 Wilmington, DE 19801 3. Names and Addresses of General Partners . The names and the business, residence or mailing address of each general partner of the partnership are as follows: Name Business, Residence or Mailing Address John A. Berry The Linpro Company 1861 Wichle, Suite 250 Reston, VA 22090 Name Business, Residence or Mailing Address Jay G. Cranmer The Linpro Company One Penn Square West, Suite 2500 Philadelphia, PA 19102 Name Business, Residence or Mailing Address Eric Eichler The Linpro Company 200 Berwyn Park, Suite 300 Berwyn, PA 19312 Name Business, Residence or Mailing Address Patrick Armstrong The Linpro Company 200 Berwyn Park, Suite 300 Berwyn, PA 19312 Name Business, Residence or Mailing Address John Chirtea The Linpro Company 20251 Century Boulevard Third Floor Germantown, MD 20874
CERTIFICATE OF LIMITED PARTNERSHIP
This certificate has been executed as of the day and year first above written by all of the general partners of the Partnership.
	GENERAL PARTNERS /s/ John A. Berry John A. Berry /s/ Jay G. Cranmer Jay G. Cranmer /s/ Eric Eichler Eric Eichler /s/ Peter P. DiLullo Peter P. DiLullo /s/ John Chirtea John Chirtea

AGREEMENT OF LIMITED

PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., III,

A CALIFORNIA LIMITED PARTNERSHIP

TABLE OF CONTENTS
			Page
ARTICLE I.		DEFINITIONS	2
ARTICLE II.		ORGANIZATION	8
	2.1	Formation	8
	2.2	Certificate of Limited Partnership	8
	2.3	Name	9
	2.4	Use of Name of Limited Partners	9
	2.5	Term	9
ARTICLE III.		PRINCIPAL EXECUTIVE OFFICE	9
ARTICLE IV.		BUSINESS	10
	4.1	Purpose of Partnership	10
	4.2	Activities	10
ARTICLE V.		ADMISSION OF PARTNERS AND CAPITAL CONTRIBUTIONS	10
	5.1	Capital Contribution of Original Limited Partner	10
	5.2	Capital Contribution of General Partners	11
	5.3	Admission and Capital Contribution of Limited Partners	11
	5.4	Interest	12
	5.5	Limited Liability	12
	5.6	Role of Limited Partner	12
	5.7	Withdrawal of Capital Contributions	12
	5.8	Indemnification of Limited Partners	13
	5.9	[Intentionally Deleted]	13
ARTICLE VI.		EXPENSES AND COMPENSATION OF THE GENERAL PARTNERS	13
	6.1	General Expenses	13
	6.2	Compensation	14
	6.3	Loans	14
ARTICLE VII.		ALLOCATIONS OF NET PROFITS AND NET LOSS; CASH DISTRIBUTIONS	14
	7.1	General Allocations	14
	7.2	Other Allocations of Income and Credit Items	14
	7.3	Additional Allocations of Items of Expense and Loss	15
	7.4	Other Allocation Rules	16
	7.5	Distributions	16
ARTICLE VIII.		RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNERS	17
	8.1	Powers	17
	8.2	Duties	20
	8.3	Certain Limitations	21
ARTICLE IX.		CONVEYANCE OF INTERESTS IN THE PARTNERSHIP	24
	9.1	General Provisions	24
	9.2	Limited Partners	24
	9.3	Admission as Limited Partner	25
	9.4	Succession to Interest of Certain Limited Partners by the Federal Savings and Loan Insurance Corporation	26
	9.5	Purchase of Interests by the General Partners	26
	9.6	Death or Dissolution of a Class A Limited Partner or Other Holder or Spouse Thereof	26
	9.7	Voluntary Withdrawal by Limited Partner	27
ARTICLE X.		WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER;	28
	10.1	Resignation of, Withdrawal of, or Assignment by General Partner	28
	10.2	Removal of a General Partner	28
	10.3	Notice of Removal	29
	10.4	Termination of a General Partner	29
	10.5	Liability of General Partner after Termination	30
	10.6	Compensation of General Partner Upon Termination	30
	10.7	Election of Substitute General Partner	30
	10.8	Election of Additional General Partners	30
	10.9	[Intentionally omitted]	30
	10.10	Change in Managing General Partners	31
ARTICLE XI.		DISSOLUTION AND WINDING-UP OF THE PARTNERSHIP	31
	11.1	Dissolution of the Partnership	31
	11.2	Election upon Dissolution	31
	11.3	Winding-Up of the Partnership	32
ARTICLE XII.		BOOKS OF ACCOUNT, ACCOUNTING REPORTS, FISCAL YEAR, BANKING AND TAX ELECTION	33
	12.1	Books of Account	33
	12.2	Fiscal Year	34
	12.3	Accounting and Reports	34
	12.4	Capital Accounts	34
	12.5	Banking and Investment Funds	36
	12.6	Tax Election	36
	12.7	Partnership Returns	36
	12.8	Tax Matters Partners	36
	12.9	Financial Statements and Reports	37
	12.10	Partnership Level Administrative and Judicial Proceedings	37
ARTICLE XIII.			38
	13.1	Power of Attorney	38
	13.2	Duration of Power	39
ARTICLE XIV.			39
	14.1	Exoneration	39
	14.2	Indemnification	40
	14.3	Liability	41
ARTICLE XV.		MISCELLANEOUS	41
	15.1	Notices	41
	15.2	Captions	41
	15.3	Severability	41
	15.4	Amendments	42
	15.5	Meetings and Means of Voting	42
	15.6	Right to Rely Upon the Authority of the General Partner	42
	15.7	Litigation	43
	15.8	Governing Law	43
	15.9	Waiver of Action for Partition	43
	15.10	Counterparts	43
	15.11	Parties in Interest	43
	15.12	Integrated Agreement	43
	15.13	Right to Rely Upon Authority of Person Signing Agreement	44
	15.14	Rights of Non-Recourse Creditors	44
	15.15	Number and Gender	44
	15.16	Partner Representations	44
	15.17	Competition: Independent Activities	45

THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., III a California limited partnership
PARTIES:	LUZ PARTNERSHIP MANAGEMENT, INC., a California corporation, as Corporate General Partner, Patrick Francois, an individual, as an Individual General Partner, LPM III, INC., a California corporation ("LPM III"), and LUZ ENGINEERING CORPORATION, a California corporation ("LEC"), as the Withdrawing General Partners, the Class A and Class B Partners listed on Exhibit A and all other persons and entities who hereafter may be admitted to the Partnership as general or limited partners.
AGREEMENT:
ARTICLE I. DEFINITIONS 1.0 For all purposes of this Agreement, unless the context otherwise requires or the term is otherwise defined herein, capitalized terms are used herein with the meanings given in Schedule X to the Cotenancy Agreement. 1.1 " Act " means the California Revised Limited Partnership Act, California Corporations Code, Chapter 3. 1.2 " Agreement " means this Agreement of Limited Partnership, as amended from time to time. 1.3 " Capital Accounts " shall have the meaning set forth in Paragraph 12.4 hereof. 1.4 " Capital Contribution " means, with respect to any Partner, a contribution by such Partner to the capital of the Partnership. 1.5 " Class A Unit " means a Unit entitling the owner thereof to a 0.00172775% share (computed as set forth in Paragraph 1.17) (0.99% for all Class A Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, as amended from time to time, as well as a .17837837% share (99% for all Class A Units issued and outstanding as of December 31, 1986) of any solar energy tax credit that the Partnership may be entitled to pursuant to the laws of the State of California, other than any such credits arising from the Partnership's acquisition of the Plus System which credits shall be allocated to the Class A Units issued after December 31, 1986 at the rate of 5.50% per Unit (99% for all such Class A Units). The owners of the Class A Units issued prior to December 31, 1996 have each made a Capital Contribution of $25,000 per Unit, and the owners of Class A Units issued after December 31, 1986 have also made an initial Capital Contribution of $25,000. 1.6 " Class B Unit " means a Unit entitling the owner thereof to a 0.04700719% share (computed as set forth in Paragraph 1.17) (98.01% for all Class B Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, as amended from time to time. A Class 8 Units are not entitled to any share of any solar energy tax credit to which the Partnership may be entitled under the laws of California. Each Class B Unit obligates the owner thereof to make a Capital Contribution of up to $25,000 as follows: either (a), $13,750.00 on admission, $9,166.67 as a Subsequent Contribution and up to $2,083.33 as a Deferred Contribution, if any shall be required pursuant to the terms hereof; or (b) $13,750.00 an admission, $2,083.00 as set forth in the Non-Interest Bearing Note, up to $2,083.33 an a Deferred Contribution if any shall be required pursuant to the terms hereof, and $7,093.67 as set forth in the investor Note. In lien of paying any such obligation in installments, it may be made in cash. All such Capital Contributions have been made. 1.7 " Closing Date " means the date on which each Limited Partner (other than the Original Limited Partner) delivered its Initial Capital Contribution. 1.8 " Code " means the United States Internal Revenue Code of 1906, as amended. 1.9 " Corporate General Partner " means Luz Partnership Management, Inc. (ILPMO) and any other corporation admitted as a general partner of the Partnership in place of or in addition to such corporation. 1.10 " Deferred Contribution " means the amount of cash to be contributed to the Partnership by the Class 2 Partners in the aggregate, consisting of the amount per Unit, if any, due and payable pursuant to the terms of, and in accordance with, the last paragraph of Section 5.3 of this Agreement and Sections 3 and 4 of the Change in Tax Law Indemnity Agreement. 1.11 " General Partners " means LPM, Patrick Francois and all successors or additional general partners of the Partnership approved pursuant to this Agreement. A "General Partner" shall mean any of the General Partners. 1.12 " Holders of Interests " means those persons or entities which from time to time are shown on the books and records of the Partnership as being owners of Interests, or a fraction thereof, whether or not such persons or entities have been admitted to the Partnership as Limited Partners. 1.13 " Indenture " means that certain Indenture dated as of August 9, 1988 between the Partnership and Manufacturers Hanover Trust Company of California, as Indenture Trustee, and its successors and assigns. 1.14 " Individual General Partner " means Patrick Francois, and any other individual admitted as a General partner of the Partnership in place of or in addition to Patrick Francois. 1.15 " Initial Capital Contribution " means with respect to each Partner the original amount of cash contributed to the capital of the Partnership which amount shall be no less than $25,000 per Unit for each Class A Unit and no less than $13,750 per Unit for each Class B Unit. All Initial Capital Contributions have been made. 1.16 " Institutional Lender " means Household Commercial of California, Inc. and its respective successors and assigns. 1.17 " Interest " or " Partnership Interest " means a percentage interest in the profits and losses of the Partnership. The percentage interest attributable to each Class A Unit prior to December 1, 1987 is 0.00178378% (and thereafter shall be 0.00172775%), representing in the aggregate a 0.99% Interest. The percentage interest attributable to each Class B Unit is 0.04700719%, representing in the aggregate a 98.01% Interest. The aggregate Interest of the General Partners is one percent. The aggregate Interest of the General Partners shall be allocated among the General Partners on the basis of the percentage obtained by dividing the capital contributed by each General Partner by the capital contributed by all General Partners, except that in all events the Individual General Partner shall have a Partnership Interest of one-half of one percent. The Interest of a Limited Partner stated as a percentage of all Interests held by Limited Partners is the percentage obtained by adding the percentage interest in profits attributable to each Unit owned by such Partner (both Class A Units and/or Class B Units) and dividing said number by 99. The Interest of a Limited Partner stated as a percentage of all Interests held by Partners shall be the percentage obtained by adding the percentage interest attributable to each Unit owned by such Limited Partner (both Class A Units and Class B Units) together. 1.18 " Investor Note " means the promissory note bearing interest at up to 10% per annum to be given the Partnership in the amount of $7,083.67 per Class B Unit which the General Partners may require to be secured by a letter of credit or other security acceptable to the General Partners, payable in 10 equal installments on June 15 and December 15, 1997, 1988, 1989, 1990 and 199.1 of no more than $917.37 per Unit. No Investor Notes were issued. 1.19 " Limited Partners " means the persons or entities admitted to the Partnership at any time and from time to time as Limited Partners. A General Partner may also be admitted as a Limited Partner. 1.20 " Majority of the Limited Partners " means, at the time of any vote by the Limited Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate Units having more than a fifty percent (50%) interest in the profit3 of the Partnership held by all the Limited Partners. 1.20A " Managing General Partner " means the General Partner so designated pursuant to Section 6.2 or any successor selected pursuant to Paragraph 10.10. 1.21 " Net Profit " and " Net Loss " means the Partnership's taxable income or lose for a taxable year, determined in accordance with section 703(a) of the Code, as amended from time to time (for this purpose, all items of income gain, loss or deduction required to be separately stated pursuant to section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
	(i) Any income of the Partnership which is exempt from federal income tax shall be added to such taxable income or loss; (ii) Any expenditures of the Partnership described in section 705(a)(2)(B) of the Code, as amended from time to time, or treated as section 705(a)(2)(B) expenditures, pursuant to section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations, shall be subtracted from such taxable income or loss; (iii) Notwithstanding any other provision of this section 1.21, any items which are specially allocated pursuant to section 7.2 shall not be taken into account in computing Net Profits or Net Loss.
1.22 " Non-Interest Bearing Note " means the non-interest bearing note given the Partnership in the principal amount of $2,083 per Unit calling for a principal payment of $2,083 per Unit on September 1, 1986, representing a portion of a Limited Partner's Capital Contribution. 1.23 " Nonrecourse Notes " means those certain nonrecourse notes in the aggregate original principal amount of $33,000,000 secured by the Partnership's interest in the Plant and certain of the Partnership's other assets, to be executed by the Partnership in favor of the Institutional Lender or any note(s) which may be issued in replacement thereof, which notes shall be secured by the Security Documents. 1.24 " Note Purchase Agreement " means that certain Note Purchase Agreement dated as of August 9, 1988 among the Partnership, the Institutional Lender, LPM and LIL pursuant to which the Partnership will issue the Nonrecourse Notes. 1.25 " Offering" means the sale of Units in the Partnership at the Closing Date. 1.26 " Operative Documents " shall be defined as defined in Schedule X to the Cotenancy Agreement dated July 31, 1986 among the Partnership, UCC-1986 Luz Solar III and LEC, as amended, with the other owners of the Project (the "Cotenancy Agreement"). 1.27 " Original Limited Partner " means Jane Margolis, an individual. 1.28 " Partners " means collectively the General Partners and all Limited Partners, and reference to a Partner shall be to any one of the Partners. 1.29 " Partnership " means the limited partnership created pursuant to this Agreement and the Act. 1.30 " Partnership Notes " means those certain nonrecourse notes, secured by the Partnership's interest in the Plant, executed by the Partnership in favor of Luz Israel and delivered to Blount and any notes which may be issued in replacement thereof as well as any nonrecourse notes issued in connection with the acquisition of the Plus System, all of which notes are to be prepaid with a portion of the proceeds from the issuance of the Nonrecourse Notes. 1.31 " Plant " or " Project " or " Facility " means the solar thermal electrical generating system consisting of a 203,000 square meter solar collector field and a related 30 megawatt net capacity steam turbine generator located near Kramer junction, California, built for the Partnership by Blount pursuant to the EPC Agreement, intended to generate electricity and to qualify as a qualified small power production facility under the Public Utility Regulatory Policies Act of 1978 and the regulations promulgated by the Federal Energy Regulatory commission. From and after December 10, 1987, the Plant also includes the Plus System. 1.32 " Plus System " means the 26,320 square meter solar collector field added to the Plant in December 1987 which expanded the total size of the Plant's solar collector field to approximately 229,320 square-meters. 1.33 " Project Documents " shall be defined as defined in Schedule Y to the Note Purchase Agreement. 1.34 " Project Participation Agreement " means that certain Project Participation Agreement dated as of July 31, 1996 by and among the Partnership LEC, LPM III, and the initial Class B Partners relative to the purchase by such Class B Partners of their interest in the Partnership. 1.35 " Security Documents " means the Deed of Trust and the Disbursement Agreement as defined in the Note Purchase Agreement. 1.36 " Subsequent Contribution " means the contributions made to the Partnership in the amounts of $2,500.00, $2,916.67, $2,083.33 and $1,666.67 per Class B Unit on August 29, September 30, October 31'and November 28, 1986, respectively. Subsequent Contribution were evidenced by Special Notes for each payment due. The Special Notes did not bear interest prior to their respective maturity dates and have all been paid. 1.36A " Special Notes " means those notes in the form of Schedule V to the Project Participation Agreement evidencing the obligation to make each Subsequent Contribution. 1.37 " Two-Thirds of the Limited Partners " means, at the time of any vote by the Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate a number of Units entitled to sixty-six and two thirds percent (66-2/3%) of the profits of the Partnership held by all of the Limited Partners. 1.38 " Unit " means an ownership interest in the Partnership, which is owned by a Limited Partner. Each Unit represents a commitment to make a Capital Contribution of up to $25,000. There are two kinds of Units, namely Class A Units and Class B Units. There are 573 Class A Units and 2085 Class B Units subject to adjustment pursuant to Section 5.3. 1.39 " Withdrawing General Partners " means LEC and LPM III. 1.40 " Disbursement Agreement " shall be defined as defined in the Note Purchase Agreement. 1.41 " Performance Warranty " shall be defined as defined in the Note Purchase Agreement. 1.42 " Operating Agreement " shall be defined as defined in the Note Purchase Agreement. 1.43 " Project Management Agreement " shall be defined as defined in the Note Purchase Agreement. 1.44 " Refinancing Agreement " shall mean that certain Refinancing Agreement dated August 9, 1988 among the Partnership, LIL, LEC and LPM. 1.45 " Warranty Certificate " shall be defined as defined in the Disbursement Agreement. 1.46 " Warranty Letter of Credit " shall be defined as defined in the Note Purchase Agreement. 1.47 " Warranty Letter of Credit Bank " shall be defined as defined in the Note Purchase Agreement. 1.48 " Federal Tax Indemnity Agreement " shall mean the Amended and Restated SEGS III Tax Indemnity Agreement among LEC, Luz International Limited and the holders of Class B Units, dated August 9, 1988. ARTICLE II. ORGANIZATION 2.1 Formation The parties by the execution of this Agreement and the filing of the Certificate of Limited Partnership as provided in Paragraph 2.2 do hereby form a limited partnership under and pursuant to the Act. 2.2 Certificate of Limited Partnership The General Partners shall execute, acknowledge and file with the California Secretary of State the Certificate of Limited Partnership as required by the Act. An amendment to the certificate of Limited Partnership may be signed, personally or by an attorney-in-fact, by: (a) Any General Partner and the new General Partner if the amendment is caused by the admission of a new General Partner; (b) Any General Partner if a General Partner withdraws or ceases to be a General Partner and the Partnership's business is continued; or (c) Any General Partner under any other circumstances unless otherwise provided by the Act. 2.3 Name The name of the Partnership shall be Luz Solar Partners Ltd., III, a California limited partnership, and the business of the Partnership shall be conducted under that name. 2.4 Use of Name of Limited Partners The General Partners shall not make use of the name of any Limited Partner who is not also a general partner in the conduct of the business of the Partnership. The General Partners shall not, except as may be required by law, disclose the name of any Limited Partner without the previous written consent of such Limited Partner, which consent may be withheld in its discretion. 2.5 Term The Partnership will continue until December 31, 2030, unless sooner terminated as provided herein. ARTICLE III. PRINCIPAL EXECUTIVE OFFICE 3.1 The principal executive office of the Partnership shall be located at 924 Westwood Boulevard, Suits 1000, Los Angeles at California 90024, or at any other place within the State of California which the General Partners may designate at any time and from time to time after first giving at least 30 days prior notice to all Limited Partners. The General Partners may establish the principal place or other places of business of the Partnership within the state of California, when the General Partners deem it advantageous to the Partner ship, without liability to any Partner. 3.2 The Agent for Service of Process on the Partnership is John Kendall whose address is 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024. The General Partners shall cause to be filed an amendment to the Certificate of Limited Partnership reflecting any change of address of or replacement of the Agent for Service of Process within 30 days after its occurrence. ARTICLE IV. BUSINESS 4.1 Purpose of Partnership The Partnership has been formed under the laws of the State of California for the purpose of entering into a contract for the construction of the Plant, transferring interests in the Plant to the Cotenants, leasing real and personal property in connection therewith, owning, financing, arranging for the operation and maintenance of the Plant, which will generate electricity for sale to public utility users in accordance with the Public Utility Regulatory Policies Act of 1978 ("PURPAZ)1 (and leasing an interest in the Plant pursuant to the Equipment Lease as defined in Section 8.1(c), which Equipment Lease shall be terminated on or before the issuance of the Nonrecourse Notes). 4.2 Activities The Partnership's activities shall be limited to those in furtherance of the purposes specified in paragraph 4.1, including: (a) Entering into the agreements and transactions set forth in Section 8.1 and similar agreements and transactions in substitution or replacement thereof; and (b) Performing all acts necessary to accomplish such purposes. ARTICLE V. ADMISSION OF PARTNERS AND CAPITAL CONTRIBUTIONS 5.1 Capital Contribution of Original Limited Partner The Original Limited Partner has made a contribution of One Hundred Dollars ($100) in cash to the capital of the Partnership. Such capital contribution was returned to the original Limited Partner following the admission to the Partnership of additional Partners pursuant to paragraph 5.3, at which time all Partners consented to the Original Limited Partner's withdrawal of her capital contribution and thereby waived and released the Original Limited Partner from any liability and from any right, claim or action that they may have had against said Limited Partner for such withdrawal. 5.2 Capital Contribution of General Partners The General Partners have no fixed obligation to make capital contributions to the Partnership, but collectively own a one percent Interest and are entitled to one percent of each item of income, gain, deduction, lose, distribution or credit (including any United States tax credit and the California solar energy credit). The Corporate General Partners were initially credited with Capital Contributions of$291,000, which Capital Contributions shall be allocated to LPN. in addition, LPN has agreed to make a Capital Contribution equal to any amounts required to be contributed under Section 4,.7 of the Note Purchase Agreement. LPN further agrees that it will restore to the Partnership any negative balance in the collective Capital Accounts of LPN and the Withdrawing General Partners upon the earlier of: (i) its withdrawal as a General Partner,, or (ii) the liquidation of the Partnership. 5.3 Admission and Capital Contribution of Limited Partners The General Partners have accepted subscriptions, pursuant to the terms of the Offering, for 573 Class A Units and 2095 Class B Units. No additional Units may be issued. Capital Contributions shall be made as specified in paragraphs1.5 and 1.6 as adjusted by reason of paragraph 5.7. The Capital Contribution made by each Limited Partner shall be set forth in Exhibit A to this Agreement. The Interest of a Limited Partner in the Partnership shall be the percentage determined in accordance with paragraph 1.17 of this Agreement. 5.4. Interest Capital Contributions to the Partnership do not accrue interest. 5.5 Limited Liability Except as provided in Sections 15652 and 15666 of the Act, no Limited Partner who is not also a General Partner shall be bound by, or liable for, the debts, expenses, liabilities, contracts or any other Obligations of the Partnership. Limited Partners shall not be required or obligated to lend any funds to the Partnership or to make further Capital Contributions of any kind whatsoever beyond those described in this Article V. 5.6 Role of Limited Partner No Limited Partner shall take part in the conduct or control of the business of the Partnership or have any right or authority to act for or bind the Partnership in any manner whatsoever. No vote or consent given by any Limited Partner shall ever be construed to make a Limited Partner liable as a General Partner or to cause the Limited Partners to have any liability beyond that set forth in paragraph 5.5. No Limited Partner or any Affiliate shall make any loan to the Partnership. 5.7 Withdrawal of Capital Contribution Except as provided in Section 9.7, no Limited Partner (other than the Original Limited Partner) shall have the right to withdraw or reduce its contribution to the capital of the Partnership, unless (i) all other Partners consent, (ii) all liabilities of the Partnership (except liabilities to the General Partner and to Limited Partners on account of the Capital Contributions) have been paid or there remains prop erty of the Partnership sufficient to pay such liabilities, and (iii) this Agreement is amended as to set forth the withdrawal or reduction. Limited Partners shall not have the right to demand or receive property other than cash in return for their contribution, and herein no Limited Partner shall have priority over any other Limited Partner, either as to the return of contributed capital or as to any profits, losses or distributions, except as set forth in paragraph 5.1, this paragraph 5.7 and the last sentence of paragraph 7.5(a). 5.8 Indemnification of Limited Partners The Partnership shall, solely from its assets and without recourse to any General Partner, indemnify, defend and hold harmless the Limited Partners from any loss, liability, damage or expense imposed on them related to the ownership of Partnership property or conduct of the Partnership's business other than (i) the repayment of more than the Interest of a Limited Partner in any distribution whose return is required pursuant to Sections 15652 and 15666 of the Act; and (ii) taxes imposed on or measured by the net income of such Limited Partners. 5.9 [Intentionally Deleted] ARTICLE VI. EXPENSES AND COMPENSATION OF THE,GENERAL PARTNERS 6.1 General Expenses The General Partners may charge the Partnership and be reimbursed by it for any and all reasonable, ordinary and necessary out-of-pocket expenses actually incurred by them in connection with the performance of the responsibilities of the General Partners to the Partnership and the operation of the Partnership's business but excluding indirect costs and over head expenses. 6.2 Compensation LPM shall be the Managing General Partner until it ceases to be a General Partner or until a new Managing General Partner is selected pursuant to Paragraph 10.10. The Managing General Partner shall not be reimbursed for the cost of its administrative and management services to the Partnership, but Partnership accounting duties may 1)4 delegated to a nationally recognized accounting firm and the fees and expenses of such accountants will be borne by the Partnership. Such administrative duties and management may be delegated to any competent entity whether or not it is a Partner, but not to a Limited Partner. 6.3 Loans If the General Partners loan money to the Partner they shall be paid Interest on such loans at the prime rate plus one percent (1%) quoted from time to time by the First Interstate Bank of California, or any successor, but never in excess of the maximum rate permitted by law. ARTICLE VII. ALLOCATIONS OF NET PROFITS AND NET LOSS; CASH DISTRIBUTIONS 7.1 General Allocations Except as otherwise provided in sections 7.2 and 7.3, Net Profits and Net Loss shall be allocated among all Partners, pro rata in accordance with their respective Partnership Interests. 7.2 Other Allocations of Income and Credit Items (a) All items of California solar energy tax credit be allocated 3/4 of 1% to LEC (so long as it is a Gen eral Partner and thereafter to LPM), 1/4 of 1% to Patrick and 99% to the owners of Class A Units, and provided further that all such credits allocated to the owners of Class A Units arising in connection with the Partnership's acquisition and placement in service of the Plus System shall be allocated entirely to the owners of the Class A Units issued after December 31, 1986. Except as otherwise provided the portion allocated to the owners of Class A Units shall be divided pro rata in accordance with the number of such Units owned by each on the date the property giving rise to such credit, was placed in service. (b) Interest earned on any Initial Capital Contribution which exceeded $13,750 per Class B Unit (an "Early Contribution") from the date such contribution was made to the earlier of December 14, 1986 or the day before the Plant is placed in service for federal income tax purposes (the "Excess Interest") shall be allocated 1% to the General Partners and the balance among those Partners who made such Early Contributions in proportion to such contributions. In determining the interest income of the Partnership during this period, the Early Contributions shall be deemed to be the last funds expended by the Partnership. No payment made pursuant to the Special Note shall be considered an Early Contribution. (c) To the extent the Partnership has interest income with respect to any borrowing from the Partnership by any Partner (including any Investor Note) whether stated or pursuant to section 483 or 1271 through 1288 of the Code, as amended from time to time, such interest income shall be allocated to the Partner to whom such borrowing relates, and such interest shall not constitute a Capital Contribution. (d) All items of federal investment and energy tax credit shall be divided among all Partners in accordance with their Interests as of the date the property giving rise to the credit is placed in service. (e) In the event the adjusted tax basis of any property that has been placed in service by the Partnership is increased pursuant to section 48(q) of the Code, as amended from time to time, such increase shall be allocated among the Partners in the same proportions as the investment tax credit that is recaptured with respect to such property is shared among the Partners. 7.3 Additional Allocations of Items of Expense and Loss (a) Federal income tax deductions for depreciation allowed under the accelerated cost recovery system or any sucessor method ("depreciation deductions") shall be allocated among the Partners in accordance with their interests from and after the date that the property giving rise to such deductions is placed in service, unless regulations are promulgated by the Internal Revenue Service that require that depreciation deductions be applied ratably throughout the taxable year, in which case such deductions shall be allocated entirely to new or transferee Partners as of the date of their admission until the cumulative allocations to all Partners equal those that would have been made had such regulations not been promulgated. (b) Any reduction In the adjusted tax basis of Partnership property pursuant to section 48(g) of the Code, as amended from time to time, shall be allocated among the Partners pro rata in accordance with their Partnership interests. 7.4 Other Allocation Rules (a) Net Profit and Net Lose shall be computed according to the accrual method of accounting for federal income tax purposes and otherwise in accordance with generally accepted accounting principles applied in a consistent manner. (b) The Partnership shall use the interim closing of the books method of accounting upon the admission of a new or transferee Partner or the termination of a Partner's Interest. (c) Except as otherwise provided in this Agreement, whenever a proportionate part of the Partnership Not Profit or Net Loss Is credited or charged to a Partner's Capital Account, every item of income, gain, loss or deduction entering into the computation of such Net Profit and Net Lose shall be considered credited or charged, as the case may be, and every item of credit or tax preference applicable to the period during which such profit or loss was realized shall be allocated but not credited or charged, to such account in the same proportion. 7.5 Distributions (a)The Partnership may from time to time, in the sole discretion of the General Partners, distribute cash to the Partners in proportion to their Partnership Interests. (b)Distributions of Partnership assets in respect of Interests shall be made only to the Persons who, According to the books and records of the Partnership, are the record Holders of Interests on the date determined by the General Partners as of which Holders of Interests are entitled to any distribution. The General Partners and the Partnership shall bear no liability for making distributions in accordance with the provisions of the preceding sentence. (c) All amounts withheld pursuant to the Code, as amended from time to time, or any provision of the laws of any jurisdiction with respect to any payment or distribution to the Partnership or to the Partners shall be treated as amounts distributed to the respective Partners on whose account the withholding was imposed for all purposes under this Agreement. ARTICLE VIII. RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNERS 8.1 Powers Subject to the provisions of paragraph 8.2 and 8.3 hereof, the management and control of the Partnership and its business and affairs shall rest exclusively with the General Partners, each of whom shall have all the rights and powers which may be possessed by a General Partner pursuant to the Act and such rights and powers as are otherwise conferred by law or are necessary, advisable or convenient to the discharge of their duties under this Agreement and to the management of the business affairs of the Partnership in furtherance of the purposes of the Partnership as set forth in Paragraph 4.1. In the event of any disagreement among the General Partners, the decision of the Managing General Partner shall prevail. With limiting the generality of the foregoing, the General Partners shall have the rights and powers to do those things set forth below (which subject to Article VI may-be exercised at the cost and expense of the Partnership) but only to the extent in the furtherance of the purposes of the Partnership set forth in Paragraph 4.1: (a) Expend the capital and income of the Partnership in furtherance of the Partnership's business to optimize the economic yield to the Partners. (b) Perform all acts necessary to commence and the Partnership's business and in connection therewith to hold, manage, operate, exploit, acquire, and sell assets acquired in connection therewith, to enter into contracts for services, and contracts, as, when, if and under such terms and conditions as the General Partners, in their sole discretion, shall deem advisable. (c) Execute and deliver, any deed, bill of sale, mortgage, license, or sublicense, contract for sale, agreement for deed, or other document conveying the interest of the Partnership in any of its assets, or any part thereof, whether held in its name or otherwise. No other signature shall be required. In this regard, the Managing General Partner is expressly authorized to enter into: (A) the Operative Documents to which the Partnership is a party, including the Cotenancy Agreement (and any amendments thereto or termination contemplated by the Note-Purchase Agreement or the Refinancing Agreement), the Participation Agreement with the owners of the Plant, the Project Participation Agreement, a Sublease (the "Sublease") with Lux Engineering Corporation (or any subsidiary thereof), a Project Management Agreement, the EPC Contract, the Expansion Agreement (as In Paragraph 8.3(a)(viii)), the Equipment Lease agreements calling for the purchase or lease from and lease or sublease back to Luz Engineering Corporation (or any subsidiary thereof) of the Partnership's undivided interest in the real property upon which the Plant is located (the "Equipment Lease") provided, however the Sublease and the Equipment Lease be terminated at or prior to the issuance of the Nonrecourse Notes; (B) the Project Documents to which the Partnership is a party, including but not limited to the Operating Agreement and the Project Management Agreement; and (C) the Refinancing Agreement, the Note Purchase Agreement, the Security Documents, the Indenture, the Nonrecourse Notes, and any escrow agreements or arrangements that facilitate or effectuate the closing of the transactions contemplated thereby; including but not limited to and any and all documents or related to the documents listed in subclauses (A), or (C) above or contemplated thereby. (d) Cause or allow the legal title to, or any legal equitable interest in, the assets of the Partnership to be kept in the Partnership's name. (e) Borrow or raise monies on behalf of the Part in the Partnership name in an amount in the aggregate outstanding at any one time not to exceed $1,000,000 and in connection therewith and from time to time draw, make, accept, endorse, execute and issue promissory notes, drafts, mortgages, and other negotiable or non-negotiable instruments and evidence of indebtedness, and secure the payment thereof and of the interest thereon by mortgage or pledge, conveyance or assignment in trust, of the whole or any part of the assets of the Partnership, including contract rights; provided, however, that a creditor who makes a nonrecourse loan to the Partner ship must not have or acquire, at any time as a result of making that loan, any direct or indirect interest in the profit, capital, or property of the Partnership other than as a credit whose recourse is limited to the specified security, provided further that the $1,000,000 limit set forth above shall not apply to: (i) any loan made to the Partnership by the General Partner to enable the Partnership to comply with the express provisions of any Project Document; (ii) any loan to Partnership made by LEC pursuant to Section 5.6 of the Agreement; or (iii) the Nonrecourse Notes. (f) Engage, retain, or employ, on behalf of the Partnership, such persons, firms or corporations as the General Partners, in their sole discretion, shall deem advisable for the operation and management of the business of the Partnership (including accountants and lawyers) on commercially reasonable terms. (g) Possess, exercise or refrain from exercising all other rights and powers of a General Partner under the Act. (h) Expend the funds of the Partnership for the of premiums on insurance policies of any kind, nature, and description, but excluding any insurance protecting the General Partners from liabilities or claims relating to the breach of their fiduciary duties to the Partners or negligence. (i) Enter into contracts, joint ventures, or other on behalf of the Partnership with Limited Partners, subject to the limitations contained in the Act with respect to the preservation of limited liability of such Limited Partners. (j) Admit persons as Limited Partners of the Partnership upon their contribution of the amount specified in Article V or their compliance with the provisions of Article IX. (k) Prepay the Partnership Notes with the proceeds the sale of the Nonrecourse Notes. (l) Accept the Warranty Letter of Credit as security for the Performance Warranty. (m) Make any filings under the California Subdivision Map Act that have been approved by a Majority of the Limited Partners. (n) [Intentionally deleted] 8.2 Duties The General Partners shall manage and control the business and affairs and carry out the business of the Partnership according to their beat efforts. The General Partners shall devote such time to the business of the Partnership as the General Partners, in their sole discretion, determine to be necessary and appropriate; provided, however, that: (a) the Managing General Partner will take, or cause to be taken, all steps necessary to operate the Plant in such a manner that the Partnership will have fully available to it the Investment Tax Credit, the Extended Federal Energy Tax Credit Equipment ACRS Deductions and Improvements ACRS Deductions and all other tax benefits available under the Code, from time to time, and corresponding California income tax benefits including but not limited to the California Solar Energy Tax Credit, with no recapture of any regular investment tax credit or energy investment tax credit; (b) the General Partners will keep accurate records the revenues and expenses of the Partnership and will submit reports and other documents required by Article XII to the Partners within the time periods allowed therein; (c) the Managing General Partner will locate and hire, either on behalf of the Partnership or directly on its own behalf or through subcontractors to the Partnership and the other owners of the Plant, all personnel to operate the Plant and all administrative and supervisory personnel for the Plant. (d) The General Partners shall distribute subject to any limitation contained in any Project Document or the Disbursement Agreement, to the Partners at least quarterly all Partnership cash in excess of its needs for debt service, operating and maintenance expenses and a reasonable reserve emergencies. (e) Upon failure of the prompt payment by Luz Israel of all amounts due as set forth in a Warranty Certificate, the General Partners shall cause a vote of the Limited Partners, within 30 days of delivery of such Warranty Certificate, with respect to any action to be taken by the Partnership with respect to a draw under the Warranty Letter of Credit, and shall cause the Disbursement Trustee to make a draw under the Warranty Letter of Credit if a Majority of the Limited Partners so vote provided however that with respect to any amount due with respect to the calendar year 1997, the General Partner shall make a draw under the Warranty Letter of Credit in an amount equal to the lesser of: (x) the amount set forth in the Warranty Certificate; and (y) the then principal amount of the Warranty Letter of Credit. 8.3 Certain Limitations (a) Except as otherwise provided in Paragraph 8.3(b) and (c), the General Partners shall not do any of the followings:
	(i) Any act in contravention of this Agreement; (ii) Confess a judgment against the Partnership; (iii) Admit a person or entity as a General Partner or Limited Partner, except as provided in Article IX or X or Paragraph 5.3; (iv) Possess Partnership property or sell, transfer, assign, pledge or subject to mortgage or security interest any Partnership property for other than a Partnership purpose set forth in Paragraph 4.1; (v) Sell, exchange, lease, mortgage, pledge, or otherwise transfer all or a substantial part of the assets of the Partnership except as permitted by Paragraph 8.1(e) or as may be required to secure the Nonrecourse Notes as contemplated by the Security Documents, the Indenture and the Note Purchase Agreement; (vi) Suffer indebtedness by the Partnership other than in the ordinary course of its business and as specifically permitted by the last clause of Paragraph 8.1(e); (vii) Permit the Partnership to enter into a lease providing for the rental of the Plant; (viii) Take any action pursuant to the Cotenancy Agreement that requires the expenditure of money or the incurrence of liabilities except in the ordinary course of business of owning and operating the Partnership's interest in the Project or as provided for in the Expansion Agreement related to the Partnership's acquisition, ownership and operation of the Plus System (the "Expansion Agreement"), the Refinancing Agreement, the Note Purchase Agreement and the agreements referenced therein. (ix) Make or permit any substantial modification to the EPC Contract; or (x) Except as otherwise authorized by this Agreement, take or authorize any of the following actions, each of which involves an actual or potential conflict of interest with the Partnership: (A) any termination, cancellation, waiver, amendment or modification in any significant respect of any Operative Document or any Project Document (except as contemplated by the Expansion Agreement, the Note Purchase Agreement or the Refinancing Agreement) or any contract entered into pursuant to (B) below, (B) entering into any contract in which Luz International Limited or any of its Affiliates or any officers, directors of any thereof is a party or has a material interest other than the Expansion Agreement and the other agreements referred to in the Expansion Agreement; or (C) take any action which pursuant to the terms of Section 4.3 of the Project Management Agreement which requires the approval of the Partnership; provided, however, that the General Partners are hereby permitted to enter into, execute, or consent to, as the case may be, an amendment to the Ground Lease, as amended, an Amendment to the Common Facilities Co-Tenancy Agreement, as amended, among Luz Solar Partners Ltd., III, Luz Solar Partners Ltd., IV, Luz Solar Partners Ltd., V ('LSP V'), Luz Solar Partners Ltd., VI ('LSP VI') and Luz Solar Partners Ltd., VII ('LSP VII'), a Subdivision Map related thereto, and such other documents as such General Partners shall deem necessary, all in such form as the General Partners may deem advisable in order to (a) permit the LSP VI and LSP VII partnerships to have principal use of up to 2 acres of the Common Area immediately south of the LSP V evaporation pond otherwise governed by the Common Facilities Co-Tenancy Agreement and (b) to remove a strip of land approximately 67 feet wide by 6,000 feet long along the boundary of Parcels 7 and 8 (as identified on the proposed Subdivision Map) from the Common Area and add it to Parcels 7 and 8 for the benefit of LSP VI and LSP VII. (xi) Unless sixty (60) days prior notice shall have been given to each Limited Partner, enter into any contract (other than: those in effect as of July 31, 1986; the Expansion Agreement; the other agreements referred to in the Expansion Agreement; the Note Purchase Agreement; the other agreements referred to in the Note Purchase Agreement; the Refinancing Agreement and the other agreements referred to in the Refinancing Agreement; any actions specifically authorized by this Agree as specified in Paragraphs 8.1(c), (k) and (1)) requiring the expenditure of more than one million dollars annually (except where such expenditure is required avert an emergency as to meet other extraordinary circumstances where such prior notice is impracticable).
(b) In the event that the Institutional Lender, as by the Disbursement Agreement, desires to approve a substitute for the Warranty Letter of Credit Bank that does not meet the standard set forth in Section 6.04(b) of. the Disbursement Agreement (a "Change"), then the General Partners shall not consent to any such Change on behalf of the Partnership unless:
	(i) Each Limited Partner has been mailed notice of such proposed change and Limited Partners owning Interests of more than five percent (5%) have not delivered written notice of their objection to the Change within 30 days of the later of the mailing or other delivery of such notice; or (ii) Whether or not the notice of such an objection is received, the Change has been approved by the vote or written consent of Two Thirds of the Limited Partners.
(c) In the event that Luz International or any of its Affiliates requests a change in the Warranty Letter of Credit Bank, no such change in such issuer shall take place and the General Partners shall not consent to any such change on behalf of the Partnership unless each Limited Partner has been mailed or otherwise delivered notice of such change and it has been approved by the vote or written consent of Two Thirds of the Limited Partners. (d) The General Partners shall not cause the Disbursement Trustee to make a draw under the Warranty Letter of Credit unless so authorized pursuant to Paragraph 8.2(e) and will not take any other action pursuant to Section 17 of the Performance Warranty without the approval of a Majority of the Limited Partners. ARTICLE IX. CONVEYANCE OF INTERESTS IN THE PARTNERSHIP 9.1 General Provisions Limited Partners may not sell, transfer, assign or subject to a security interest all or any part of their Interests except as permitted in this Article IX, and any act in contravention of this Article IX shall be null and void ab initio. No Partner may create a fractional Unit, except for fractional Units arising from their initial purchase from the Partnership or by reason of divorce or transfers occasioned by death (whether by reason of the termination of a trust, or the provisions of a will or the laws of intestate succession). 9.2 Limited Partners Limited Partners may not sell, transfer, assign, or subject to a security interest any or all of the Interests owned by them, except with the consent of the General Partners (which will not be unreasonably withheld) and provided, that; (a) Such Limited Partner and the respective purchaser, transferee, or assignee each executes, acknowledges, and delivers to the General Partners such instruments of transfer and assignment with respect to such transactions as are satisfactory in form and substance to the General Partners; (b) Such Limited Partner furnishes either an opinion of counsel, or other acceptable evidence, satisfactory in form and substance to the General Partners, to the effect that: (i) the sale, transfer, or assignment will not dissolve the Partnership or otherwise impair the ability of the Partnership to be treated as a partnership under the federal income tax laws; (ii) such sale, transfer, or assignment will not violate any applicable Federal or state securities law; (iii) such sale, transfer, or assignment will not cause the Partnership to lose its exemption from Federal and state public utility laws provided by the Public Utility Regulatory Policies Act of 1978; and (iv) such sale, transfer or assignment will not cause any negative effect to existing Partners by reason of any regulations promulgated pursuant to Section 79 of the Deficit Reduction Act of 1984; (c) The Partnership is paid a reasonable transfer fee which is sufficient to pay actual and reasonable costs and expenses of the Partnership in connection with such transactions; (d) The purchaser, transferee, or assignee represents in writing that the Interests are for such person's own account for long term investment and not with a view toward resale, fractionalization, division, or distribution thereof in a manner that would violate Federal or state securities laws or require registration thereunder; and (e) Such purchaser, transferee, assignee, or holder of such security interest (or any person who acquires such Interests upon foreclosure of such security interest) shall not become a Limited Partner unless the General Partners consent in writing to such person becoming a Limited Partner, which consent may be given or withheld in the sole discretion of the General Partners. Any such purchaser, transferee, assignee, or holder of such security interest (or any person who acquires such Interests upon foreclosure of such security interest) who is not admitted as a Limited Partner shall be entitled, to the extent assigned, only to the profits, losses and distributions to which the assigning Limited Partner would have been entitled and shall not be entitled to any of the rights as Limited Partner, including, without limitation, any right to: (i) vote on any Partnership matter, (ii) require any information or accounting from the Partnership, (iii) inspect the Partnership's books and records, or (iv) make or approve any Partners ' hip decision or otherwise participate in the management of the Partnership. The assigning Limited Partner shall remain a Limited Partner until-such time, if any, that the General Partners consent to the assignee becoming a Limited Partner and the provisions of Section 9.3 are otherwise complied with. 9.3 Admission as Limited Partner If the General Partners consent to the admission as a Limited Partner of a purchaser, transferee or assignee permitted by paragraph 9.2, and such purchaser, transferee or assignee (a) elects to become a Limited Partner by delivering a written notice of such election to the General Partner, (b) executes and acknowledges such other instruments as the General Partners may deem necessary, required, or advisable to effect the admission of such person as a Limited Partner, including without limitation the written acceptance and adoption by such person of the, provisions of this Agreement, and (c) pays a reasonable transfer fee to the Partnership which is sufficient to cover all actual and reasonable expenses in connection with the admission of such person as a Limited Partner, then, all steps shall be taken which, in the opinion of the General Partners, are reasonably necessary to admit such person under the Act as a Limited Partner, and such person shall thereupon become a Limited Partner. 9.4 Succession to Interest of Certain Limited Partners by the Federal Savings and Loan Insurance Corporation (Intentionally deleted] 9.5 Purchase of Interests by the General Partners Except with the consent of Two-Thirds of the Limited Partners, no General Partner shall be permitted to purchase any portion of the Partnership Interests of any Limited Partner after December 31, 1986. 9.6 Death or Dissolution of a Class A Limited Partner or Other Holder or Spouse Thereof Upon the death or dissolution of a Class A Limited Partner or other Holder of Class A Units, such Limited Partner's estate, devisee, heirs and/or transferees shall Succeed to such Limited Partner's Interests and shall be bound by the terms and provisions of this Agreement. However, in the event that any Unit of the deceased or dissolved Class A Limited Partner or spouse thereof or other Holder of Class A Units does not pass to a single trust or passes to more than one heir, devisee or transferee, or, upon termination of any such trust, is distributed to more than one beneficiary, then, in that event, all such heirs, devisees, transferees and/or beneficiaries ("Distributees") shall, within ninety (90) days after distribution by the estate of the deceased Limited Partner or other Holder of Interests or by the representative of the Limited Partner so dissolved, execute and deliver to the General Partners a written instrument (including a power of attorney) appointing one person, firm or corporation as and to be the agent ("Agent") of and for the Distributees. The Agent shall be responsible for collecting, receiving and making all payments and contributions required hereunder, shall vote all Units of the Distributees, and shall perform all other obligations of such Distributees performable by reason of or arising from their Units, and any and all payments and/or disbursements due the Distributees for or arising from their Units shall be deemed to have been validly made to such Distributees by paying the same to the Agent. In the event that the Distributees for any reason fail to designate an Agent in writing in the manner and-within the time prescribed above and continue to fail to cure such default after ten (10) days written notice from the General Partners to correct the same the General Partners shall have the right, at their election, to withhold all sums that are payable with respect to the Units of the Distributees until such time as the Partnership is dissolved or such default is cured. So long as such default exists with respect to any Distributees, their Units may not be voted. Whenever Units may not be voted on a transaction by reason of the previous sentence, the Units deemed issued and outstanding and owned by the Limited Partners shall be reduced by the number of the Units which may not be voted. Upon the death of the spouse of a Class A Limited Partner or other Holder of Class A Units having a community property interest in any Units, the foregoing provisions of this Section 9.6 shall apply to all of the deceased spouse's community property interest in the surviving spouse's Units in the Partnership which does not pass to the surviving spouse by will or through operation of law, and such provisions shall be applied to such Units as though the Limited Partner or Holder of Class A Units had owned such Units and had died on the date of such Class A Limited Partner's spouse's death leaving such Units to the actual recipients thereof. 9.7 Voluntary Withdrawal by Limited Partner If at any time during the term of the Partnership, a Limited Partner or any Affiliate of a Limited Partner, by reason of its interest in the Partnership or any transaction contemplated by this Agreement or the Project Participation Agreement shall be deemed by any governmental authority having jurisdiction to be an "electric utility", a "public utility", a "public utility holding company" or a similar entity subject to regulation under the Federal Power Act, the Public Utility Holding Company Act of 1935, as amended, the California Public Utility Law or any other Federal, state or local law or regulation, then, upon demand made by such Limited Partner to the Managing General Partner, the Partnership shall forthwith purchase and such Limited Partner shall forthwith sell to the Partnership, all right, title and interest in the limited partnership interest of such Limited Partner in the Partnership for a price equal to the present value of all future distributions to such Limited Partner of income and capital, as determined by a firm of independent accountants based on the following assumptions:
	(i) a discount rate of 11 percent per annum; (ii) the sale of all of the assets of the Partnership at the termination of the Partnership.
The purchase price as so calculated shall bear interest from the date of sale at the rate of 11 per cent per annum. compounded annually and shall be deferred by such Limited Partner and paid by the Partnership in installments equal to the amount of income and capital that the Partnership would have distributed to such Limited Partner had it not sold its limited partnership interest in the Partnership, including any amounts that would have been distributed to such Limited Partner upon the liquidation of the Partnership. Any amount remaining upon the liquidation of the Partnership and payment of such income and capital to such Limited Partners shall be extinguished. ARTICLE X. WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER; ELECTION OF A GENERAL PARTNER 10.1 Resignation of, Withdrawal of, or Assignment by General Partner The General Partners shall not have the right to withdraw their interests in or resign from the Partnership. The General Partners may not sell, transfer, assign, or subject to a security interest all or any part of their Interests to any person, or admit any person as substitute General Partners. However any General Partner may substitute any other person or entity as a substitute General Partner provided, that such substitution is consented to in writing by all other General Partners and approved by the vote or written consent of Two-Thirds of the Limited Partners. 10.2 Removal of a General Partner A General Partner shall be removed as a General Partner of the Partnership effective as of the date specified in paragraph 10.3 upon the vote or written consent of a majority of the Limited Partners to remove such General Partner, if such General Partner is in default pursuant to the terms of this Agreement, and has not cured such default within thirty (30) days after written notice thereof from the Partners, or without cause, upon the vote or written consent of Two Thirds of the Limited Partners who are not affiliates of any General Partner to remove; provided, however, such removal shall not eliminate any then existing obligations of the Partnership to such General Partner or the General Partner to the Limited Partners. 10.3 Notice of Removal Written notice of the removal of a General Partner shall be given by the Partners voting to remove such General Partner pursuant to paragraph 10.2 hereof, to such General Partner and to all other Partners. Such notice shall set forth the day upon which the removal is to become effective, which date shall not be less than thirty (30) days after such notice is given to the last party required to be notified. 10.4 T ermination of a General Partner A General Partner shall cease to be a General Partner of the Partnership upon the happening of any of the following events: (a) The General Partner is removed as a General Partner as provided in paragraph 10.2. (b) An order for relief against the General Partner is entered under Chapter 7 of the Federal Bankruptcy Act, or the General Partner: (i) makes a general assignment for the benefit of creditors, (ii) files a voluntary petition under the Federal Bankruptcy Act, (iii) files a petition or answer seeking for that General Partner any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law, or regulation, (iv) files an answer or other pleading admitting or failing to contest material allegations of a petition filed against that General Partner in any proceeding of this nature or (v) seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of the General Partner or of all or any substantial part of that General Partner's properties. (c) Sixty (60) days after the commencement of any proceeding against the General Partner seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or within sixty (60) days after the appointment without that General Partner's consent or acquiescence of a trustee, receiver, or liquidator of the General Partner or all or any substantial part of that General Partner's properties, the appointment is not vacated or stayed, or within 60 days after the expiration of any such stay, the appointment is not vacated. (d) In the case of an Individual General Partner, either of the following: (i) the death of that Individual General Partner, or (ii) the entering by a court of competent jurisdiction of an order adjudicating that Individual General Partner incompetent to manage his or her person or estate. (e) In the case of a Corporate General Partner, the filing of a certificate of dissolution, or its equivalent, for the Corporate General Partner. (f) Any other event specified in the Act. 10.5 Liability of General Partner after Termination Upon a General Partner's ceasing to be a General Partner in accordance with the provisions of the Agreement, all future liability of the applicable General Partner as a General Partner shall cease as provided in the Act and the Partnership shall promptly take all steps reasonably necessary under the Act to cause such cessation of liability. The remaining General Partners shall amend the Certificate of Limited Partnership to reflect that the former General Partner is no longer a General Partner of the Partnership. 10.6 Compensation of General Partner Upon Termination Upon a General Partner ceasing to be a General Partner in accordance with the provisions of this Agreement, such General Partner's Interest in the Partnership shall be converted from a general partnership Interest to a limited partnership Interest and such person shall be forthwith admitted as a Limited Partner of the Partnership except that such General Partner shall not be entitled to vote on the admission of a new General Partner. 10.7 Election of Substitute General Partner Upon the last General Partner ceasing to be a General Partner in accordance with the Agreement or within thirty (30) days thereafter, if, pursuant to Section 11.2 of the Agreement, the Limited Partners elect to continue the business of the Partnership, substitute General Partners may be elected by the unanimous vote or written consent of the Limited Partners. 10.8 Election of Additional General Partners Unless the last General Partner shall have ceased to be a General Partner in accordance with this Agreement, upon the vote or written consent of at least a Majority of the Limited Partners, any person or entity may be elected a General Partner. Such General Partner shall not be required to have, an Interest in the Partnership. Upon such election, said additional General Partner shall have all the rights, powers and duties of a General Partner under this Agreement. 10.9 (Intentionally Omitted] 10.10 Change in Managing General Partners A Majority of the Limited Partners may by vote or written consent, with or without cause, change the Managing General Partner and designate any other General Partner (who consents to serve) as the Managing General Partner. Any such change shall be effective immediately upon notice of such vote or consent being delivered to the removed Managing General Partner. ARTICLE XI. DISSOLUTION AND WINDING-UP OF THE PARTNERSHIP 11.1 Dissolution of the Partnership The Partnership shall be dissolved upon the first of any of the following events to occur: (a) The last General Partner ceases to be a General Partner in accordance with the provisions of this Agreement unless the Partners agree in writing to continue the business of the Partnership as provided in paragraph 11.2 and to admit one or more General Partners as provided in paragraph 10.7. A General Partner ceasing to be a General Partner shall not dissolve the Partnership if-there is a remaining General Partner or a substitute General Partner who elects to continue the business of the Partnership. Such General Partner is hereby authorized to continue the business of the Partnership. (b) The vote or written consent to dissolve by all General Partners and Two Thirds of the Limited Partners. (c) The expiration of the term of the Partnership. (d) The sale, transfer or other irrevocable disposition of all or substantially all of the property of the Partnership. (e) Otherwise by operation of law. 11.2 Election upon Dissolution Upon a dissolution of the Partnership pursuant to paragraph 11.1(a), any one or more of the Limited Partners shall, promptly after such dissolution give notification thereof to the other Limited Partners and shall call for a vote of the Limited Partners to continue the business of the Partnership or to wind-up the Partnership pursuant to paragraph 11.3 of this Agreement. The former General Partner shall be deemed to have elected and hereby agrees to continue the business or the Partnership, and if all Limited Partners elect affirmatively to continue the business of the Partnership a substitute General Partner shall be elected pursuant to Paragraph 10.7 of this Agreement and all of the Limited Partners shall execute a unanimous written consent or other written agreement to evidence their election to continue the business of the Partnership. 11.3 Winding-Up of the Partnership Upon the election of the Partners to wind-up the Partnership, or the failure of the Limited Partners to elect to continue the business of the Partnership and to evidence such election in writing or to elect a substitute General Partner pursuant to paragraph 11.2, or upon a dissolution of the Partnership pursuant to paragraph 11.1(b), 11.1(c), 11.1(d), or 11.1(e), the General Partners (or if there is not a General Partner, a substituted General Partner or liquidator elected by a Majority of the Limited Partners) shall take full account of the Partnership's assets and liabilities and the assets shall be liquidated as promptly as is consistent with obtaining the fair-value thereof, and the proceeds therefrom, after the allocations prescribed in Paragraph 7.2 have been made for the year of dissolution, shall be applied and distributed in the following order of priority: (a) To the payment of the debts and liabilities of the Partnership and the expenses of liquidation in the following order:
	(i) those owing to creditors other than Partners, and (ii) those owing to Partners.
(b) To the setting up of any reserves which the General Partner may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership. (c) To Partners and former Partners in satisfaction of liabilities for distributions under Sections 15661, 15664 and 15665 of the Act. (d) To Partners in accordance with their respective positive capital account balances, and former Partners to the extent of amounts due pursuant to section 9.7 of the Agreement. (e) To Partners in accordance with their respective Interests. ARTICLE XII. BOOKS OF ACCOUNT, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING AND TAX ELECTION 12.1 Books of Account The Partnership's books and records and the Agreement shall be maintained at the principal office of the Partnership. The financial records of the Partnership shall be maintained in accordance with generally accepted accounting principles for federal income tax purposes. The books and records shall reflect all Partnership transactions and be appropriate and adequate for the Partnership's business. The Limited Partners and their designated representatives, shall be permitted to inspect and copy all books and records during normal business hours. Without limiting the generality of the foregoing provisions, the Partnership shall keep at its principal office all of the following: (a) A current list and the full name and last known business or residence address of each Partner set forth in alphabetical order together with the contribution and the share and profits and loss of each Partner. (b) A copy of the Certificate of Limited Partnership and all Certificates of Amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed. (c) Copies of the Partnership's Federal, state, and local income tax or information returns and reports, if any, of the six most recent taxable years. (d) Copies of the original partnership agreement and all amendments thereto. (e) Financial statements of the Partnership for the six most recent fiscal years. (f) The Partnership's books and records for at least the current and past three fiscal years. Upon the request of a Limited Partner, the General Partners shall promptly deliver to the Limited Partner, at the expense of the Partnership, a copy of the information required to be maintained by clauses (a), (b), or (d) immediately above. 12.2 Fiscal Year The fiscal year of the Partnership shall be the calendar year. 12.3 Accounting and Reports As soon as reasonably practicable after the end of each fiscal year, but not later than seventy-five (75) days after such end, each Partner shall be furnished with a copy of the balance sheet of the Partnership as of the last day of such fiscal year, an income statement for such fiscal year, and a statement showing the amounts allocated to or allocated against such Partner's Capital Account pursuant to the Agreement during or in respect of the year, and all items of income, gain, deduction, credit, or loss allocated for purposes of the Code as amended from time to time, and any applicable state or local income tax laws pursuant to the Agreement. Such balance sheet and statement of income shall be prepared on the accrual method of accounting. The Managing General Partner shall notify each Limited Partner, promptly upon obtaining knowledge thereof, of any default under the Operative Documents or Project Documents which, in its judgment, is likely to have a material adverse effect on the Project. 12.4 Capital Accounts (a) A capital account ("Capital Account*) shall be established for each Partner, and shall be increased by (i) the amount of any Capital Contribution made by the Partner, (ii) the fair market value of any property contributed by the Partner to the Partnership (net of liabilities securing such contributed property that the partnership is considered to assume or take subject to under section 752 of the Code, as amended from time to time), and (iii) allocations to the Partner of Net Profits, and shall be reduced by (i) the amount of cash distributed to the Partner, (ii) the fair market value of any property distributed to the Partner by the Partnership (net of liabilities securing such property that such Partners considered to assume or take subject to under section 752 of the Code, as amended from time to time), and (iii) allocations to the Partner of Net Loss. (b) Upon a distribution in kind of Partnership property the Capital Account of each Partner will be debited or credited under Article VII with such Partner's allocable share of the gain or loss which would have been recognized by the Partnership had the property been sold for an amount equal to its fair market value immediately prior to such distribution. (c) If any Interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest. (d) The Capital Account of each Partner shall be reduced by an amount equal to 50 percent of any United States federal investment tax credit in respect of the Project allocated to such Partner (or any predecessor in interest) or such greater percentage thereof as may be required pursuant to a change in the Code after the date hereof. (e) The Capital Account of each Limited Partner, to the extent attributable to Class A Units held by such Partner, and of each General Partner, shall be reduced by 65-95 percent of any California solar energy tax credit in respect of the Project (other than the Plus System) allocated to such Partner (or its predecessor in interest) and the Capital Account of each Limited Partner to the extent attributable to Class A Units issued after December 31, 1986, and of the General Partner, shall be reduced by 50 percent of any California Solar Energy Tax Credit in respect of the Plus System allocated to such Partners (or its predecessor in interest) except that if the amount of the reduction pursuant to subparagraph (d) shall be based on a percentage of United States federal investment tax credit that is greater than 50 percent, the amount of the reduction hereunder shall be an amount equal to such percentage of the California solar energy tax credit as may be deemed necessary to ensure that the aggregate Capital Accounts of the Holders of Class A Units will equal one percent (1%) of the aggregate Capital Accounts of the holders of Class B Units (disregarding any portion of such Capital Accounts referable to the ownership of Class A Units) after the adjustment required by clause (d) above and disregarding any other item of income, gain, loss or deduction that may have been credited to the Capital Account of any Partner, and so that the then aggregate Capital Accounts of the holders of Class A Units issued after December 31, 1986 will be 18/573 of the aggregate Capital Accounts of the holders of all Class A Units (disregarding any portions of such Capital Accounts attributable to the ownership of Class B Units issued prior to December 31, 1986 and any Net Profit or Net Loss previously allocated to such Partners). (f) The Capital Account of each Partner shall be increased by an amount equal to any increase in the tax basis of the Project attributable to a recapture of any United States investment tax credit in the same proportion as such investment tax credit recapture is allocated to such Partner. 12.5 Banking and Investment Funds All funds of the Partnership shall be deposited with the Disbursement Trustee in accordance with the terms of the Disbursement Agreement or in a separate bank account or accounts or in an account or accounts of a savings and loan association or invested in government bonds or other instruments issued by federal, state, or local governments, certificates of deposit or other instruments issued by banks or savings and loan institutions, or in mutual funds or money market funds that have assets equal to or greater than one billion dollars ($1,000,000,000) as shall be determined by the General Partners in their sole discretion. 12.6 Tax Election Upon the transfer of a Class B Unit in the Partnership or distribution of the Partnership's assets to a Class B Limited Partner, the Tax Matters Partner may cause the Partnership to elect pursuant to Section 754 of the United States internal Revenue Code of 1954, as amended, to adjust the basis of the Partnership's property as allowed by Section 734(b) and Section 743(b) thereof, upon the consent of Two-Thirds of the Limited Partners. 12.7 Partnership Returns The General Partners shall, for each fiscal year required, file with the U.S. Internal Revenue Service on behalf of the Partnership, a U.S. Partnership Information Return within the time prescribed by law (including extensions) for such filing. The General Partners shall also file on behalf of the Partnership such state, city, or foreign income tax returns as may be required by applicable law. Within 60 days after the end of each fiscal year of the Partnership, the General Partners shall send to each of the Partners such information as is necessary to complete federal and state income tax or information returns, including Schedules K-1 (or their equivalent successor tax reports) and copies of the Partnership's Federal, state, and local income tax or information returns for the year. 12.8 Tax Matters Partners The Managing General Partner is hereby designated as the "Tax Matters Partner" of the Partnership as said term is defined in Section 6231(a)(7) of the Code and any similar provision of state or local law and agrees to:
	(i) furnish to the Partners within 10 days of its receipt by the Tax Matters Partner any relevant and material written information, return, statement or other document supplied to the Tax Matters Partner by the Internal Revenue Service in connection with a Partnership level administrative proceeding under sections 6221 through 6233 of the Code, as amended from time to time; (ii) Prosecute any petition for a readjustment of Partnership items filed by a Partner under section 6226 of the Code, as amended from time to time; (iii) if any adjustment is made by the Internal Revenue Service correcting a mathematical or clerical error on a Partnership information return, Form 1065, or Schedule K-1 and the Internal Revenue Service is incorrect in making such adjustment, file a request, under section 6230(b) of the Code, as amended from time to time, that the correction not be made; and (iv) withhold tax pursuant to the Withholding Tax Certificate and in the amount directed a vote of the Majority of the Limited Partners.
12.9 Financial Statements and Reports The General Partners shall deliver audited financial statements to the Partners annually accompanied by a report of independent accountants of recognized national standing. Such statements shall include an income statement, balance sheet and statement of changes in financial condition. Such annual report shall discuss the activities of the Partnership for the year and provide a General Partner's discussion of the results of operations and other operating and financial data for the year. Such statements and report shall be delivered no later than ninety (90) days after the end of each calendar year. In addition, similar unaudited quarterly statements and quarterly reports shall be prepared and delivered within forty-five (45) days after the end of each calendar quarter. 12.10 Partnership Level Administrative and Judicial Proceedings (a) In the event of any partnership level proceeding instituted by the Internal Revenue Service pursuant to Sections 6221 through 6233 of the Code, as amended from time to time, the Tax Matters Partner shall upon written request of Two-Thirds of the Limited Partners relinquish control of the nature and content of all action and defense to be taken by the Partnership in response to such proceeding to the Participants (as defined in the Federal Income Tax Indemnity Agreement), pursuant to and in accordance with Section 6 of the Federal Income Tax Indemnity Agreement. In such case, the Tax Matters Partner hereby further agrees to relinquish all control of the nature and content of all proceedings pursuant to section 6221 through 6233 of the Code, as amended from time to time, instituted by or on behalf of the Partnership, including the decision to institute such proceedings, whether administrative or judicial, and whether in response to a previous Internal Revenue Service proceeding against the Partnership or otherwise, to such Participants; or (b) Upon the election of Two-Thirds of the Limited Partners, such Person as shall be designated by such Partners shall be admitted to the Partnership as a General Partner and shall upon admission to the Partnership be substituted as the Tax Matters Partner of the Partnership. Such substitute Tax Matters Partner shall not be bound by the provisions of paragraph (a) above. ARTICLE XIII. POWER OF ATTORNEY 13.1 Power of Attorney Each Partner holding Interests at the time of admission to the Partnership of less than 5% hereby makes, constitutes, and appoints each of the General Partners, acting alone, and any successor or additional General Partners, with full power of substitution and resubstitution, their true and lawful attorney for them in their name, place and stead and for their use and benefit, to sign, execute, certify, acknowledge, swear to, file and record this Agreement, and to sign, execute, certify, acknowledge, file and record all instruments amending this Agreement, as now or hereafter amended, that may. be appropriate, and such agreements or other instruments or documents (i) to reflect the exercise by the General Partners of any of the powers granted to them under the Agreement; (ii) to reflect any amendments made to the Agreement by the Partners pursuant to the Agreement (iii) to reflect the admission to the Partnership of any General Partner, Limited Partner, substituted Limited Partner or General Partner, or the withdrawal of any Partner in the manner prescribed in the Agreement; and (iv) which may be required of the Partnership or of the Partners by the laws of the State of California, or any other jurisdiction. Each such Partner authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary or advisable in connection with any of the foregoing, hereby giving such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in and about the foregoing as fully as such Partner might or could do if personally present, and hereby ratifying and confirming all that each such attorney- in- fact shall lawfully do or cause to be done by virtue thereof. 13.2 Duration of Power The power of attorney granted pursuant to paragraph 13.1 of this Agreement: (a) Is a special power of attorney coupled with an interest and is irrevocable, and shall survive the death, dissolution, incompetency, bankruptcy or legal incapacity of the applicable Limited Partner; (b) May be exercised by the attorney-in-fact by listing all of the Partners who have granted a power of attorney pursuant to paragraph 13.1 and who are executing any agreement, certificate, instrument or document with the single signature of such attorney-in-fact acting as attorney-in-fact for all Partners; and (c) Shall survive the delivery of an assignment by a Partner of any or all interests in the Partnership, except that where the purchaser, transferee, or assignee thereof has the right to be, or with the consent of the General Partners is admitted as, a Limited Partner, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling each such attorney-in-fact to execute, acknowledge, swear to, and file any such agreement, certificate, instrument, or document necessary to effect such substitution. Any assignee or successor of a Partner who has granted a power of attorney under paragraph 13.1 does hereby make, constitute, and appoint the General Partners, and any successor or additional General Partners, his attorney-in-fact in the same manner and force and for the same purposes, as the assignor or person succeeded. ARTICLE XXV. LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS 14.1 Exoneration Except in case oft (i) bad faith; or (ii) willful misconduct; or (iii) in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances; the doing of any act or the failure to do any act by the General Partners in their capacities as such the effect of which may cause or result in loss or damage to the Partnership, if done pursuant to the advice of legal counsel employed by the General Partners on behalf of the Partnership, or if done in good faith to promote the best interests of the Partnership, shall not subject the General Partners to any liability to the Partners or the Partnership. The foregoing shall not affect or diminish any rights which the Partnership may have against a General Partner by reason of contracts entered into with such General Partner for the performance of services as contemplated in Section 8.1. The General Partners shall diligently enforce the provisions of all such contracts on behalf of the Partnership. 14.2 Indemnification The Partnership shall defend, indemnify and hold harmless the General Partners including all officers, directors, employees, or agents of the General Partners and each Partnership employee or agent against all claims, actions, demands, losses, liabilities, costs, expenses (including all attorneys' fees), damages and threat of loss as a result of any claim or legal proceeding relating to the performance or non-performance of any act concerning the activities of the Partnership (other than acts and omissions arising from or in connection with any contract with the Partnership pursuant to which such General Partner acts as agent for the owners of the Plant or performs management, operation, maintenance or other services at the Plant and other than any loss, claim or damage arising out of or based upon any violation of any state or federal securities law, as amended, or any rule or regulation promulgated thereunder); provided, however, the person or party against whom a claim is made or legal proceeding is directed must not have been culpable of gross negligence, bad faith or willful misconduct, or, in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances. The Partnership shall advance any and all expenses incurred by a General Partner, agent or employee as described above in defending any proceeding prior to the final disposition of such proceeding; provided, however, that any such General Partner, agent or employee, prior to receiving any advancement-hereunder shall execute and deliver to the Partnership an undertaking to repay any and all amounts advanced unless it shall be determined ultimately that such person is entitled to be indemnified as authorized above. 14.3 Liability Notwithstanding anything in this Agreement to the contrary, except for liability described in Paragraph 14.2, the General Partners shall not be personally liable for the return of the Capital Contribution of any Partner, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets. Nothing herein shall affect any liability of any General Partner under any Operative Document or Project Document other than this Agreement. ARTICLE XV. MISCELLANEOUS 15.1 Notices Except as required by paragraph 15.5, any notice, payment, demand, offer or communication required or permitted to be given by any provision of the Agreement shall be in writing and shall be deemed to have been delivered and given for all purposes (i) if same is actually received, or (11) if sent by registered or certified mail, postage and charges prepaid, addressed as follows: To the General Partners or a Limited Partner, at the address set forth on the signature page of this Agreement, or to such other address as such General Partners or Limited Partner may from time to time specify by written notice to the Partnership. Any such notice shall be deemed to be given as of the earlier of the date actually received, or five (5) days after the date of which the same was deposited in a regularly maintained depository for the deposit of United States mail, addressed and sent as aforesaid with postage prepaid. 15.2 Captions Paragraph and other captions contained in the Agreement are for reference purposes only and do not interpret, define or limit the scope, extent or intent of this Agreement, or any provision hereof. 15.3 Severability Every provision of this Agreement is severable. If any term or provision hereof is held to be illegal or invalid for any reason by any duly constituted court, agency, or tribunal, such illegality or invalidity shall not affect the validity of the remainder of the Agreement. 15.4 Amendments Amendments to this Agreement may be proposed by the General Partners or by the Limited Partners having an aggregate Interest of ten percent (10%) or more, and the General Partners shall transmit to the Limited Partners a verbatim statement of any proposed amendment and may include with any such submission their recommendations as to the proposed amendment. The General Partners shall seek the written vote of the Limited Partners on the proposed amendment or shall call a meeting of the Limited Partners to vote thereon. A proposed amendment shall be adopted and become effective as an amendment hereto if it receives the affirmative vote of Two Thirds of the Limited Partners. 15.5 Meetings and Means of Voting A meeting of the Partners for any matters on which the Limited Partners may vote may be called by any of the General Partners or by Limited Partners holding more than 10% of the Interests held by all Limited Partners. Whenever the Partners are required or permitted to take any action at a meeting, a written notice of the meeting shall be given not less than 10, nor more than 60, days before the date of the meeting to each Partner entitled to vote at the meeting. The notice shall state the place, date, and hour of the meeting and the general nature of the business to be transacted, and no other business may be transacted. Meetings of Partners may be held at any place within or without the State of California as may be specified in the notice of Meeting. If no place is stated in such notice, the meeting shall be held at the principal executive office of the Partnership. Notice of the meeting shall be given, and voting at the meeting shall be conducted, as provided in Section 15637 of the Act or any successor provision thereto. 15.6 Right to Rely Upon the Authority of the General Partners No person dealing with the General Partners shall be required to determine the General Partners' authority to make any commitment or undertaking on behalf of the Partnership, nor to determine any fact or circumstance bearing upon the existence of their authority. In addition no purchaser of any asset owned by the Partnership shall be required to determine the sole and exclusive authority of the General Partners to sign and deliver on behalf of the partnership any such instrument of transfer, or to ensure the proper application or distribution of revenues or proceeds paid or credited in connection therewith, unless such purchasers shall have received written notice from the Partnership affecting the same. 15.7 Litigation The General Partners shall prosecute and defend such actions at law or in equity as may be necessary to enforce or protect the interests of the Partnership. The Partnership and the General Partners shall respond to any final decree, judgment, or decision of a court of competent Jurisdiction in the matter. The Partnership shall satisfy any such judgment, decree, or decision first out of any insurance proceeds available therefore, and then out of the capital and assets of the Partnership. 15.8 Governing Law The local, internal laws of California shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties. 15.9 Waiver of Action for Partition Each of the parties hereto irrevocably waives, during the term of this Partnership and during the period of its liquidation following any dissolution, any right that such party might have to maintain any action for partition with respect to any of the assets of the Partnership. 15.10 Counterparts This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had executed the same counterpart. All counterparts shall be construed together and shall constitute one agreement. 15.11 Parties in Interest Each and every covenant, term, provision and agreement herein contained shall be binding upon and inure to the benefit of the permitted successors and assigns of the respective parties hereto. 15.12 Integrated Agreement This Agreement supersedes all prior agreements, understandings, restrictions, representations or warranties among the General Partners and the Limited Partners with respect to the subject matter hereof. 15.13 Right to Rely Upon Authority of Person Signing Agreement In the event that a Limited Partner is a trust (with or without disclosed beneficiaries), partnership, limited partnership, joint venture, corporation, or any entity other than a natural person, the Partnership and the General Partners shall (i) not be required to determine the authority of the person signing the Agreement or any amendment thereto to make any commitment or undertaking on behalf of such entity, nor to determine any fact or circumstance bearing upon the existence of his authority; (ii) not be required to see to the application or distribution of revenues or proceeds paid or credited to the person signing the Agreement or any amendment hereto on behalf of such entity; (iii) be entitled to rely upon the authority of the person signing this Agreement or any amendment hereto with respect to the voting of the Interest of such entity and with respect to the giving of consent on behalf of such entity in connection with any matter for which consent is permissible or required hereunder; and (iv) be entitled to rely upon the authority of any general partner, joint venturer, co-trustee, successor trustee, or president, vice president, or other officer (as the case may be) of any such entity the same as though such person were the person originally executing this Agreement or any amendment hereto on behalf of such entity. 15.14 Rights of Non-Recourse Creditors No non-recourse creditor of the Partnership shall have or acquire, at any time as a result of making any loan or advance, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor limited to the particular asset which is the subject of recourse. 15.15 Number and Gender Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders and the word "Person" shall include corporation, firm, partnership or other form of association. 15.16 Partner Representations Each Partner represents and warrants to the Partnership and to each of the other Partners as follows: (a) He is of full age and has full capacity to contract, and if acting in a representative capacity, is duly authorized to execute this Agreement; (b) He is subscribing for Units for his own account as beneficial owner, for investment purposes only, and not with a view to their subdivision or distribution in a manner that would violate Federal or state securities laws or require registration thereunder, provided that the disposition of his assets shall at all times be within his control. 15.17 Competition: Independent Activities The General Partners and their respective affiliates, and the Limited Partners and their respective affiliates, may individually or otherwise presently own or hereafter acquire interests in enterprises that compete with the Partnership or may themselves manufacture,- design, sell or service products that compete with the Partnership, without having or incurring any obligation to offer any interest in such activities to the Partnership. Nothing contained in this Agreement shall prohibit such competition or give the Partnership or any Partner any interest in the revenues, capital, or profits of such enterprises or activities or give the Partnership any right whatsoever to participate therein or share, in any manner, in the income therefrom. IN WITNESS WHEREOF, this Third Amended and Restated Agreement of Limited Partnership has been executed as of this 9 ^th day of August, 1988.

924 Westwood Boulevard Suite 1000 Los Angeles, California 90024	CORPORATE GENERAL PARTNERS Luz Partnership Management, Inc. By: /s/ J. F. VERHEY James F. Verhey President
c/o Luz Engineering Corporation 924 Westwood Boulevard Suite 1000 Los Angeles, California 90024	INDIVIDUAL GENERAL PARTNER /s/ PATRICK FRANCOIS Patrick Francois
	LIMITED PARTNERS: POTOMAC CAPITAL INVESTMENT CORPORATION By: PRUDENTIAL INTERFUNDING, CORP. By: PUBLIC SERVICE RESOURCES CORPORATION By: COMMUNITY ENERGY ALTERNATIVES, INC. By: Vice President CNC/SEGS, INC. By: APPLIED ENERGY, INCORPORATED By: LUZ ENGINEERING CORPORATION By: /s/ PATRICK FRANCOIS Patrick Francois CHIEF EXECUTIVE OFFICER Class B Limited Partners by Luz Partnership Management, Inc. By: /s/ STEPHEN C. BOREK Stephen C. Borek Eli Broad, Max Palevsky, Herb Alpert & Jerome Moss by Luz Engineering Corporation their Attorney-in-fact By: /s/ PATRICK FRANCOIS Patrick Francois, Chairman Withdrawing General Partners LUZ ENGINEETNG CORPORATION By: /s/ PATRICK FRANCOIS Patrick Francois CHIEF EXECUTIVE OFFICER LMP III, INC. By: /s/ J. F. VERHEY James F. Verhey, Vice President

EXHIBIT A Capital Contributions, Percentage Interest, Number of units Owned and Names of Limited Partners of Luz Solar Partners III, a California Limited Partnership
LSP III :	CALIFORNIA UNITS				FEDERAL UNITS		TOTAL		Percentage Interest Ownership	Percentage of Control for FERC	Public Utility
	December 1986		December 1987		FEDERAL UNITS		TOTAL
	Units	Amount	Units	Amount	Units	Amount	Units	Amount
PRUDENTIAL ENTERFUNDING CORP					600.000	15,000,000	600.000	15,000,000	22.3476%	28.2043%
POTOMAC CAPITAL INVESTMENT CORP.					546.000	13,650,000	546.000	13,650,000	20.3363%	25.6659%	*
PUBLIC SERVICE RESOURCES					436.000	10,900,000	436.000	10,900,000	16.2393%	20.4951%	*
CNC/SEGS, INC.					237.000	5,925,000	237.000	5,925,000	8.8273%	11.1407%
COMMUNITY ENERGY ALTERNATIVIES, INC					218.000	5,450,000	218.000	5,450,000	8.1196%	10.2476%	*
STANDARD BRAND PRINT CO.					48.000	1,200,000	48.000	1,200,000	1.7870%	2.2563%
DAVID MUNDOCK	341.000	8,525,000					341.000	8525,000	12.7099%	0.6813%
APPLIED ENERGY, INC.	63.000	1,575,000					63.000	1,575,000	2.3465%	0.1124%
MORGAN LEAR	60.000	1,500,000	1.950	48,750			61.950	1,548,750	2.3074%	0.1070%%
ELI BROAD	28.000	700,000	1.000	25,000			29.000	725,000	1.6801%	0.0499%
MERVIN ADELSON	20.000	500,000					20.000	500,000	0.7449%	0.0357%
ALLAND ROEN	20.000	500,000					20.000	500,000	0.7449%	0.0357%
AIM RECORDS	10.000	250,000					10.000	250,000	0.3725%	0.0176%
MAX PALEYSAY	6.000	150,000	8.000	200,000			14.000	350,000	0.5214%	0.0107%
HERO ALPERT	4.000	100,000	3.525	88,125			7.525	188,125	0.2803%	0.0071%
JEROME MOSS	3.000	75,000	3.525	88,125			6.525	163,125	0.2430%	0.0054%
PATRICK FRANCOIS	0.000	0					0.000	0	0.9000%	0.9000%
LUS ENGINEERING	0.000	0					0.000	0	0.1000%	0.1000%
TOTAL	555.000	13,875,000	18.000	450,000	2085.000	52,125,000	2658.000	66,450,000	100.0000%	100.0000%

STATE OF CALIFORNIA

MARCH FONG EU

SECRETARY OF STATE Form LP-2

AMENDMENT TO CERTIFICATE OF LIMITED PARTNERSHIP

IMPORTANT-Read Instruction on back before completing this form

This Certificate Is presented for filing pursuant to Section 15622, California Corporations Code.

1.SECRETARY OF STATE FILE NO. 2. NAME OF LIMITED PARTNERSHIP

(ORIGINAL CERTIFICATE-FORM LP-1)

8519700044 LUZ SOLAR PARTNERS LTD., III, a California Limited

Partnership

3. THE CERTIFICATE OF LIMITED PARTNERSHIP IS AMENDED AS FOLLOWS: (COMPLETE APPROPRIATE SUB-SECTION(S) CONTINUE ON SECOND PAGE. IF NECESSARY

A. THE LIMITED PARTNERSHIP NAME IS CHANGED TO:

B. PRINCIPAL EXECUTIVE OFFICE ADDRESS CHANGE. E. GENERAL PARTNER NAME CHANGE

ADDRESS: 41100 Highway 395 OLD NAME:

CITY: Boron STATE: CA ZIP CODE: 93516 NEW NAME:

C. CALIFORNIA OFFICE ADDRESS CHANGE. F. GENERAL PARTNER(S) WITHDRAWN:

ADDRESS: NAME:

CITY: STATE: CA ZIP CODE. NAME:

D. GENERAL PARTNER ADDRESS CHANGE: G. GENERAL PARTNER ADDED

NAME: KRAMER JUNCTION COMPANY NAME.

ADDRESS. 41100 Highway 395 ADDRESS:

CITY.. Boron STATE: CA ZIP CODE 93516 CITY: STATE: ZIP CODE:

H. INFORMATION CONCERNING THE AGENT FOR SERVICE OF PROCESS HAS BEEN C14ANGED To.

NAME.

ADDRESS CITY: STATE:CA ZIP CODE:

I. THE NUMBER OF GENERAL PARTNERS J. OTHER MATTERS TO BE INCLUDED IN THE CERTI

REQUIRED TO ACKNOWLEDGE AND FILE FICATE OF LIMITED PARTNERSHIP ARE AMENDED

CERTIFICATES OF AMENDMENTS, DISSOLU AS INDICATED ON THE ATTACHED PAGE(S)

TION, CONTINUATION AND CANCELLATION

IS CHANGED TO:

(PLEASE INDICATE NUMBER)

4. IT IS HEREBY DECLARED THAT I AM (WE ARE) THE PERSONALS WHO EXECUTED THIS AMENDMENT TO THE IDENTIFIED CERTIFICATE OF LIMITED PARTNERSHIP, WHICH RESOLUTION IS MY (OUR) ACT AND DEED, (SEE INSTRUCTIONS)

SIGNATURE SIGNATURE

POSITION OR TITLE DATE POSITION OR TITLE DATE

KRAMER JUNCTION COMPANY

BY:

POSITION OR TITLE DATE POSITION OR TITLE DATE

RETURN ACKNOWLEDGMENT TO:

NAME Alan M. Albright, Esq.

ADDRESS Dewey Ballantine

CITY 333 South Hope Street, 30th Floor

STATE Los Angeles, CA 90071

ZIP CODE

SEC/STATE REV. 1/88 FORM LP-2-FILING FEE: $15

APPROVED BY SECRETARY AT STATE

AGREEMENT OF LIMITED

PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., IV

A CALIFORNIA LIMITED PARTNERSHIP

THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., IV a California limited partnership
PARTIES:	LUZ Partnership management, Inc., a California corporation, as the Corporate General Partner, Patrick Francois, an individual, as an Individual General Partner, Arnold Goldman, an individual, as an Individual General Partner, LPM IV, INC., a California corporation ("LPM IV") and Luz Engineering Corporation, a California corporation ("LEC") as the Withdrawing General Partners, the Class A Limited Partners listed on Exhibit A, the Class B Partners listed on Exhibit A and all other persons and entities who hereafter may be admitted to the Partnership as general or limited partners.
AGREEMENT: ARTICLE I. DEFINITIONS 1.0 For all purposes of this Agreement, unless the context otherwise requires or the term is otherwise defined herein, capitalized terms are used herein with the meanings given in Schedule X to the Project. Participation Agreement. 1.1 " Act " means the California Revised Limited Partnership Act, California Corporations Code, Chapter 3. 1.2 " Agreement " means this Agreement of Limited Partnership, as amended from time to time. 1.3 " Capital Accounts " shall have the meaning set forth in Paragraph 12.4 hereof. 1.4 " Capital Contribution " means, with respect to any Partner, a contribution by such Partner to the capital of the Partnership. 1.5 " Class A Unit " means a Unit entitling the owner thereof to a 0.0015% share (computed as set forth in Paragraph 1.16) (0.99% for all Class A Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, as amended from time to time as well as a .15% share (99% for all Class A Units) of any solar energy tax credit that the Partnership may be entitled to pursuant to the laws of the State of California, and obligates the owner thereof to make a capital contribution of $25,000. 1.6 " Class B Unit " means a Unit entitling the owner thereof to a 0.0400367647% share (computed as set forth in Paragraph 1.16) (98.01% for all Class B Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, as amended from time to time. Class B Units are not entitled to any share of any solar energy tax credit to which the Partnership may be entitled under the laws of California. Each Class B Unit obligates the owner thereof to make a Capital Contribution of $25,000. 1.7 " Closing Date " means the date on which each Limited Partner (other than the Original Limited Partner) delivered their Initial Capital Contribution. 1.8 " Code " means the United States Internal Revenue Code of 1954, as amended, or the Internal Revenue Code of 1986, as amended from time to time, as the context requires. 1.9 " Corporate General Partner " means Luz Partnership Management, Inc. ("LPM") and any other corporation admitted as a general partner of the Partnership in place of or in addition to such corporation. 1.10 " General Partners " means LPM, Patrick Francois, Arnold Goldman, and all successors or additional general partners of the Partnership approved pursuant to this Agreement. A "General Partner" shall mean any of the General Partners. 1.11 " Holders of Interests " means those persons or entities which from time to time are shown on the books and records of the Partnership as being owners of Interests, or a fraction thereof, whether or not such persons or entities have been admitted to the Partnership as Limited Partners. 1.12 " Indenture " means that certain Indenture dated as of may 27, 1988 between the Partnership and manufacturers Hanover Trust Company of California, as Indenture Trustee, and its successors and assigns. 1.13 " Individual General Partners " means Patrick Francois, Arnold Goldman and any other individual admitted as a general partner of the Partnership in place of or in addition to Patrick Francois or Arnold Goldman. 1.14 " Initial Capital Contribution " means with respect to each Partner the original amount of cash contributed to the capital of the Partnership which amount shall be no less than $25,000 per Unit. 1.15 " Institutional Lender " means collectively CIGNA Property and Casualty Insurance Company and Connecticut General Life Insurance Company and their respective successors and assigns. 1.16 " Interest " or " Partnership Interest " means a percentage interest in the profits and losses of the Partnership. The percentage interest attributable to each Class A Unit is 0.0015% representing in the aggregate a 0.99% Interest. The percentage interest attributable to each Class B Unit is 0.0400367647% representing in the aggregate a 98.01% Interest. The aggregate Interest of the General Partners is one percent. The aggregate Interest of the General Partners shall be allocated among the General Partners on the basis of the percentage obtained by dividing the capital contributed by each General Partner by the capital contributed by all General Partners, except that in all events the Individual General Partners shall have a Partnership Interest of one-half of one percent (divided equally between them). The Interest of a Limited Partner stated as a percentage of all Interests held by Limited Partners is the percentage obtained by adding the percentage interest in profits attributable to each Unit owned by such Partner (Class A Units and/or Class B Units) and dividing said number by 99. The Interest of a Limited Partner stated as a percentage of all Interests held by Partners shall be the percentage obtained by adding the percentage interest attributable to each Unit owned by such Limited Partner (both Class A Units and Class B Units) together. 1.17 " Limited Partners " means the persons or entities admitted to the Partnership at any time and from time to time as Limited Partners. A General Partner may also be admitted as a Limited Partner. 1.18 " Majority of the Limited Partners " means, at the time of any vote by the Limited Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate Units having more than a fifty percent (50%) interest in the profits of the Partnership held by all the Limited Partners. 1.19 " Managing General Partner " means the General Partner so designated pursuant to Section 6.2 or any successor selected pursuant to Paragraph 10.10. 1.20 " Net Profits " and " Net Loss " means the Partnership's taxable income or loss for a taxable year, determined in accordance with section 703(a) of the Code, as amended from time to time (for this purpose, all items of income, gain, loss or deduction required to be separately stated pursuant to section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
	(i) Any income of the Partnership which is exempt from federal income tax shall be added to such taxable income or loss; (ii) Any expenditures of the Partnership described in section 705(a)(2)(B) of the Code, as amended from time to time, or treated as section 705(a)(2)(B) expenditures, pursuant to section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations, sha.11 be subtracted from such taxable income or loss; (iii) Notwithstanding any other provision of this section 1.20, any items which are specially allocated pursuant to section 7.2 shall not be taken into account in computing Net Profits or Net Loss.
1.21 " Nonrecourse Notes " means those certain nonrecourse notes in the aggregate original principal amount of $38,000,000 secured by the Plant and certain of the Partnership's other assets, to be executed by the Partnership in favor of the Institutional Lender or any note(s) which be issued in replacement thereof, which notes shall be secured by the Security Documents. 1.22 " Note Purchase Agreement " means that certain Note Purchase Agreement dated as of May 16, 1988 among the Partnership, the Institutional Lender, LPM and LIL pursuant to which the Partnership will issue the Nonrecourse Notes. 1.23 " Operative Documents " shall be defined as defined in Schedule X to the Project Participation Agreement. 1.24 " Offering " means the sale of Units in the Partnership at the Closing Date. 1.25 " Original Limited Partner " means Jane Margolis, an individual. 1.26 " Partners " means collectively the General Partners and all Limited Partners, and reference to a Partner shall be to any one of the Partners. 1.27 " Partnership " means the limited partnership created pursuant to this Agreement and the Act. 1.28 " Partnership Notes " means those certain nonrecourse notes, secured by a portion of the Plant, executed by the Partnership in favor of Luz Israel and delivered to Blount and any notes wh1c:h may be issued in replacement thereof as well as the nonrecourse note issued in connection with the acquisition of the Plus System, all of which notes are to be prepaid with a portion of the proceeds from the issuance of the Nonrecourse Notes. 1.29 " Plant " or " Project " or " Facility " means the solar thermal electrical generating system which initially consisted of a 203,000 square meter solar collector field and a related 30 megawatt net capacity steam turbine generator located near Kramer Junction, California, built for the Partnership by Blount pursuant to the EPC Agreement, to generate electricity and to qualify as a qualified small power production facility under the Public Utility Regulatory Policies Act of 1978 and the regulations promulgated by the Federal Energy Regulatory commission. From and after December 10, 1987, the Plant also includes the Plus System. 1.30 " Plus System " means the 26,230 square meter solar collector field added to the Plant in December 1987 which expanded the total size of the Plant's solar collector field to approximately 229,000 square meters. 1.31 " Project Documents " shall be defined as defined in Schedule Y to the Note Purchase Agreement. 1.32 " Project Participation Agreement " means that certain Project Participation Agreement dated as of December 19, 1986 by and among the Partnership, LEC, LPM IV, and the initial Class B Partners relative to the purchase by such Class B Partners of their interest in the Partnership. 1.33 " Security Documents " means the Deed of Trust and the Disbursement Agreement as defined in the Note Purchase Agreement. 1.34 " Two-Thirds of the Limited Partners " means, at the time of any vote by the Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate a number of Units entitled to sixty-six and two thirds percent (66-2/3%) of the profits of the Partnership held by all of the Limited Partners. 1.35 " Unit " means an ownership interest in the Partnership, which is owned by a Limited Partner. Each Unit represents a commitment to make a Capital Contribution of $25,000. There are two kinds of Units, namely Class A Units, and Class B Units. There are 660 Class A Units, and 2448 Class B Units. 1.36 " Withdrawing General Partners " means LEC and LPM IV. 1.37 " Disbursement Agreement " shall be defined as defined in the Note Purchase Agreement. 1.38 " Luz Israel Performance Warranty " shall be defined as defined in the Note Purchase Agreement. 1.39 " Operating Agreement " shall be defined as defined in the Note Purchase Agreement. 1.40 " Project Management Agreement " shall be defined as defined in the Note Purchase Agreement. 1.41 " Refinancing Agreement " shall mean that certain Refinancing Agreement among the Partnership, LIL, LEC and LPM. 1.42 " Warranty Certificate " shall be defined as defined in the Note Purchase Agreement. 1.43 " Warranty Letter of Credit " shall be defined as defined in the Note Purchase Agreement. 1.44 " Warranty Letter of Credit Bank " shall be defined as defined in the Note Purchase Agreement. ARTICLE II. ORGANIZATION 2.1 Formation The parties by the execution of this Agreement and the filing of the Certificate of Limited Partnership as provided in Paragraph 2.2 do hereby form a limited partnership under and pursuant to the Act. 2.2 Certificate of Limited Partnership The General Partners shall execute, acknowledge and file with the California Secretary of State the Certificate of Limited Partnership as required by the Act. An amendment to the Certificate of Limited Partnership may be signed, personally or by an attorney-in-fact, by: (a) Any General Partner and the new General Partner if the amendment is caused by the admission of a new General Partner; (b) Any General Partner if a General withdraws or ceases to be a General Partner and the Partnership's business is continued; or (c) Any General Partner under any other circumstances unless otherwise provided by the Act. 2.3 Name The name of the Partnership shall be Luz Solar Partners, Ltd. IV, a California limited partnership, and the business of the Partnership shall be conducted under that name. 2.4 Use of Name of Limited Partners The General Partners shall not make use of the name of any Limited Partner who is not also a general partner in the conduct of the business of the Partnership. The General Partners shall not, except as may be required by law, disclose the name of any Limited Partner without the previous written consent of such Limited Partner, which consent may be withheld in its discretion. 2.5 Term The Partnership will continue until December 31, 2030, unless sooner terminated as provided herein. ARTICLE III. PRINCIPAL EXECUTIVE OFFICE 3.1 The principal executive office of the Partnership shall be located at 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024, or at any other place within the State of California which the General Partners may designate at any time and from time to time after first giving at least 30 days prior notice to all Limited Partners. The General Partners may establish the principal place or other places of business of the Partnership within the state of California, when the General Partners deem it advantageous to the Partnership, without liability to any Partner. 3.2 The Agent for Service of Process on the Partnership is John Kendall, whose address is 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024. The General Partners shall cause to be filed an amendment to the Certificate of Limited Partnership reflecting any change of address of or replacement of the Agent for Service of Process within 30 days after its occurrence. ARTICLE IV. BUSINESS 4.1 Purpose of Partnership The Partnership has been formed under the laws of the State of California for the purpose of entering into a contract for the construction of the Plant, leasing real and personal property in connection therewith, owning, financing and arranging for the operation and maintenance of the Plant, which will generate electricity for sale to public utility users in accordance with the Public Utility Regulatory Policies Act of 1978 ("PURPA"), as a "qualifying small power production facility" eligible for exemption from regulations under certain federal and state laws, and leasing an interest in the Plant pursuant to the Equipment Lease as defined in Section 8.1(c) (which Equipment Lease shall be terminated on or before the issuance of the Nonrecourse Notes). 4.2 Activities The Partnership's activities shall be limited to those in furtherance of the purposes specified in paragraph 4.1, including: (a) Entering into the agreements and transactions set forth in Section 8.1 and similar agreements and transactions in substitution or replacement thereof; and (b) Performing all acts necessary to accomplish such purposes. ARTICLE V. ADMISSION OF PARTNERS AND CAPITAL CONTRIBUTIONS 5.1 Capital Contribution of Original Limited Partner The Original Limited Partner has made a contribution of one Hundred Dollars ($100) in cash to the capital of the Partnership. Such capital contribution was returned to the Original Limited Partner following the admission to the Partnership of additional Partners pursuant to paragraph 5.3, at which time all Partners consented to the Original Limited Partner's 4ithdrawal of her capital contribution and thereby waived and released the Original Limited Partner from any liability and from any right, claim or action that they may have had against said Limited Partner for such withdrawal. 5.2 Capital Contribution of General Partners The General Partners have no fixed obligation to make capital contributions to the Partnership, but collectively own a one percent Interest and are entitled to one percent of each item of income, gain, deduction, loss, distribution or credit (including any United States tax credit and the California solar energy credit). The Corporate General Partners were initially credited with Capital Contributions of $281,000, which Capital Contributions shall be allocated to LPM. In addition, LPM has agreed to make a Capital Contribution of any amounts required to be contributed under Section 6.7 of the Note Purchase Agreement. LPM further agrees that, it will restore to the Partnership any negative balance in the collective Capital Accounts of LPM and the Withdrawing General Partners upon the earlier of: (i) its withdrawal as a General Partner, or (ii) the liquidation of the Partnership. 5.3 Admission and Capital Contribution of Limited Partners The General Partners may accept subscriptions, pursuant to the terms of the offering, for up to 660 Class A units, and up to 2448 Class B Units. Capital Contributions shall be made as specified in paragraphs 1.5, and 1.6 as adjusted by reason of paragraph 5.7. The Capital Contribution of each Limited Partner shall be set forth in Exhibit A to this Agreement. The Interest of a Limited Partner in the Partnership shall be the percentage determined in accordance with paragraph 1.16 of this Agreement. 5.4 Interest Capital Contributions to the Partnership do not accrue interest. 5.5 Limited Liability Except as provided in Sections 15652 and 15666 of the Act, no Limited Partner who is not also a General Partner shall be bound by, or liable for, the debts, expenses, liabilities, contracts or any other obligations of the Partnership. Limited Partners shall not be required or obligated to lend any funds to the Partnership or to make further Capital Contributions of any kind whatsoever beyond those described in this Article V. 5.6 Role of Limited Partner No Limited Partner shall take part in the conduct or control of the business of the Partnership or have any right or authority to act for or bind the Partnership in any manner whatsoever. No vote or consent given by any Limited Partner shall ever be construed to make a Limited Partner liable a General Partner or to cause the Limited Partners to have any liability beyond that set forth in paragraph 5.5. No Limited Partner or any Affiliate shall make any loan to the Partnership. 5.7 Withdrawal of Capital Contributions Except as provided in Section 9.7, no Limited Partner (other than the Original Limited Partner) shall have the right to withdraw or reduce its contribution to the capital of the Partnership, unless M all other Partners consent, (ii) all liabilities of the Partnership (except liabilities to the General Partner and to Limited Partners on account of the Capital Contributions) have been paid or there remains property of the Partnership sufficient to pay such liabilities, and (iii) this Agreement is amended as to set forth the withdrawal or reduction. Limited Partners shall not have the right to demand or receive property other than cash in return for their contribution, and herein no Limited Partner shall have priority over any other Limited Partner, either as to the return of contributed capital or as to any profits, losses or distributions, except as set, forth in paragraph 5.1 and this paragraph 5.7. 5.8 Indemnification of Limited Partners The Partnership shall, solely from its assets and without recourse to any General Partner, indemnify, defend and hold harmless the Limited Partners from any loss, liability, damage or expense imposed on them related to the ownership of Partnership property or conduct of the Partnership's business other than (i) the repayment of more than the Interest of a Limited Partner in any distribution whose return is required pursuant to Sections 15652 and 15666 of the Act; and (ii) taxes imposed on or measured by the net income of such Limited Partners. 5.9 [Intentionally Deleted] ARTICLE VI. EXPENSES AND COMPENSATION OF THE GENERAL PARTNERS 6.1 General Expenses The General Partners may charge the Partnership and be reimbursed by it for any and all reasonable, ordinary and necessary out-of-pocket expenses actually incurred by them in connection with the performance of the responsibilities of the General Partners to the Partnership and the operation of the Partnership's business but excluding indirect costs and overhead expenses. 6.2 Compensation LPM shall be the managing General Partner until it ceases to be a General Partner or until a new managing General Partner is selected pursuant to Paragraph 10.10. The Managing General Partner shall not be reimbursed for the cost of its administrative and management services to the Partnership, but Partnership accounting duties may be delegated to a nationally recognized accounting firm and the fees and expenses of such accountants will be borne by the Partnership. Such administrative duties and management may be delegated to any competent entity whether or not it is a Partner, but not to a Limited Partner. 6.3 Loans If the General Partners loan money to the Partnership they shall be paid interest on such loans at the prime rate plus one percent (1%) quoted from time to time by the First Interstate Bank of California, or any successor, but never in excess of the maximum rate permitted by law. ARTICLE VII. ALLOCATIONS OF NET PROFITS AND NET LOSS: CASH DISTRIBUTIONS 7.1 General Allocations Except as otherwise provided in sections 7.2 and 7.3, Net Profits and Net Loss shall be allocated among all Partners, pro rata in accordance with their respective Partnership Interests. 7.2 Other Allocations of Income and Credit items (a) All items of California solar energy tax credit shall be allocated 3/4 of 1% to LEC (so long as it is a General Partner and thereafter to LPM), 1/8 of 1% to Patrick Francois, 1/8 of 1% to Arnold Goldman and 99% to the owners of Class A Units. The portion allocated to the owners of Class A Units shall be divided pro rata in accordance with the number of such Units owned by each holder on the date the property giving rise to such credit was placed in service. (b) To the extent the Partnership has interest income with respect to any borrowing from the Partnership by any Partner whether stated or pursuant to section 483 or 1271 through 1288 of the Code, as amended from time to time, such interest income shall be allocated to the Partner to whom such borrowing relates, and such interest shall not constitute a Capital Contribution. (c) All items of federal investment and energy tax credit shall be divided among all Partners in accordance with their Interests as of the date the property giving rise to the credit is placed in service. (d) In the event the adjusted tax basis of any property that has been placed in service by the Partnership is increased pursuant to section 48(q) of the Code, as amended from time to time, such increase shall be allocated among the Partners in the same proportions as the investment tax credit that is recaptured with respect to such property is shared among the Partners. 7.3 Additional Allocations of Items of Expense and Loss (a) Federal income tax deductions for depreciation allowed under the accelerated cost recovery system or any sucessor method ("depreciation deductions") shall be allocated among the Partners in accordance with their Interests from and after the date that the property giving rise to such deductions is placed in service, unless regulations are promulgated by the Internal Revenue Service that require that depreciation deductions be applied ratably throughout the taxable year, in which case such deductions shall be allocated entirely to new or transferee Partners as of the date of their admission until the cumulative allocations to all Partners equal those that would have been made had such regulations not been promulgated. (b) Any reduction in the adjusted tax basis of Partnership property pursuant to section 48(q) of the Code, as amended from time to time, shall be allocated among the Partners pro rata in accordance with their Partnership Interests. 7.4 Other Allocation Rules (a) Net Profit and Net Loss shall be computed according to the accrual method of accounting for federal income tax purposes and otherwise in accordance with generally accepted accounting principles applied in a consistent manner. (b) The Partnership shall use the interim closing of the books method of accounting upon the admission of a new or transferee Partner or the termination of a Partner's Interest. (c) Except as otherwise provided in this Agreement, whenever a proportionate part of the Partnership Net Profit or Net Loss is credited or charged to a Partner's capital account, every item of income, gain, loss or deduction entering into the computation of such Net Profit and Net Loss shall be considered credited or charged, as the case may be, and every item of credit or tax preference applicable to the period during which such profit or loss was realized shall be allocated but not credited or charged, to such account in the same proportion. 7.5 Distributions (a) The Partnership may from time to time, in the sole discretion of the General Partners, distribute cash to the Partners in proportion to their Partnership Interests. (b) Distributions of Partnership assets in respect of Interests shall be made only to the Persons who, according to the books and records of the Partnership, are the record Holders of Interests on the date determined by the General Partners as of which Holders of Interests are entitled to any distribution. The General Partners and the Partnership shall bear no liability for making distributions in accordance with the provisions of the preceding sentence. (c) All amounts withheld pursuant to the Code, as amended from time to time, or any provision of the laws of any taxing jurisdiction with respect to any payment or distribution to the Partnership or to the Partners shall be treated as amounts distributed to the respective Partners on whose account the withholding was imposed for all purposes under this Agreement. ARTICLE VIII. RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNERS 8.1 Powers Subject to the provisions of paragraph 8.2 and 8.3 hereof, the management and control of the Partnership and its business and affairs shall rest exclusively with the General Partners, each of whom shall have all the rights and powers which may be possessed by a General Partner pursuant to the Act and such rights and powers as are otherwise conferred by law or are necessary, advisable or convenient to the discharge of their duties under this Agreement and to the management of the business affairs of the Partnership in furtherance of the purposes of the Partnership as set forth in Paragraph 4.1. In the event of any disagreement among the General Partners, the decision of the Managing General Partner shall prevail. Without limiting the generality of the foregoing, the General Partners shall have the rights and powers to do those things set forth below (which subject to Article VI may be exercised at the cost and expense of the Partnership) but only to the extent in the furtherance of the purposes of the Partnership as set forth in Paragraph 4.1: (a) Expend the capital and income of the Partnership in furtherance of the Partnership's business to optimize the economic yield to the Partners. (b) Perform all acts necessary to commence and operate the Partnership's business and in connection therewith to hold, manage, operate, exploit, acquire, and sell assets acquired in connection therewith, to enter into contracts for services, and contracts, as, when, if and under such terms and conditions as the General Partners, in their sole discretion, shall deem advisable. (c) Execute and deliver, any deed, bill of sale, mortgage, license, or sublicense, contract for sale, agreement for deed, or other document conveying the interest of the Partnership in any of its assets, or any part thereof, whether held in its name or otherwise. No other signature shall be required. In this regard, the Managing General Partner is expressly authorized to enter into: (A) the Operative Documents to which the Partnership is a party, including the Project Participation Agreement, a Sublease (the "Sublease") with Luz Engineering Corporation (or any subsidiary thereof), a Project Management Agreement, the EPC Contract, the Equipment Lease, the Expansion Agreement (as defined in Paragraph 8.3(a)(viii)), agreements calling for the purchase or lease from and lease or sublease back to Luz Engineering Corporation (or any subsidiary thereof), of the Partnership's undivided interest in the real property upon which the Plant is located; (B) the Project Documents to which the Partnership is a party, including but not limited to the Operating Agreement and the Project Management Agreement; and (C) the Refinancing Agreement, the Note Purchase Agreement, the Security Documents, the Indenture, the Nonrecourse Notes, and any escrow agreements or arrangements that facilitate or effectuate the closing of the transactions contemplated thereby; including but not limited to and any and all documents or agreements related to the documents listed in subclauses (A), (B), or (C) above.or contemplated thereby. (d) Cause or allow the legal title to, or any legal or equitable interest in, the assets of the Partnership to be kept in the Partnership's name. (e) Borrow or raise monies on behalf of the Partnership in the Partnership name, in an amount in the aggregate outstanding at any one time not to exceed $1,000,000 and in connection therewith and from time to time draw, make, accept, endorse, execute and issue promissory notes, drafts, mortgages, and other negotiable or non-negotiable instruments and evidence of indebtedness, and secure the payment thereof and of the interest thereon by mortgage or pledge, conveyance or assignment in trust, of the whole or any part of the assets of the Partnership, including contract rights; provided, however, that a creditor who makes a nonrecourse loan to the Partnership must not have or acquire, at any time as a result of making that loan, any direct or indirect interest in the profit, capital, or property of the Partnership other than as a creditor whose recourse is limited to the specified security, provided further that the $1,000,000 limit set forth above shall not apply to: M loans secured by or related to any loan made to the Partnership by the General Partner to enable the Partnership to comply with the express provisions of any Operative Document; Hi) any loan to the Partnership made by LEC pursuant to Section 5.6 of the operating Agreement; (iii) the Partnership Notes; or (iv) the Nonrecourse Notes. (f) Engage, retain, or employ, on behalf of the Partnership, such persons, firms or corporations as the General Partners, in their sole discretion, shall deem advisable for the operation and management of the business of the Partnership (including accountants and lawyers) on commercially reasonable terms. (g) Possess, exercise or refrain from exercising all other rights and powers of a General Partner under the Act. (h) Expend the funds of the Partnership for the payment of premiums on insurance policies of any kind, nature, and description, but excluding any insurance protecting the General Partners from liabilities or claims relating to the breach of their fiduciary duties to the Partners or negligence. (i) Enter into contracts, joint ventures, or other transactions on behalf of the Partnership with Limited Partners, subject to the limitations contained in the Act with respect to the preservation of limited liability of such Limited Partners. (j) Admit persons as Limited Partners of the Partnership upon their contribution of the amount specified in Article V or their compliance with the provisions of Article IX. (k) Prepay the Partnership Notes with the proceeds from the sale of the Nonrecourse Notes. (1) Accept the Warranty Letter of Credit (as defined in the Note Purchase Agreement) as security for the Luz Israel Performance Warranty. (m) Make any filings under the California Subdivision map Act that have been approved by a Majority of the Limited Partners. 8.2 Duties The General Partners shall manage and control the Partnership's business and affairs and carry out the business of the Partnership according to their best efforts. The General Partners shall devote such time to the business of the Partnership as the General Partners, in their sole discretion, determine to be necessary and appropriate; provided, however, that: (a) the managing General Partner will take, or cause to be taken, all steps necessary to operate the Plant in such a manner that the Partnership will have fully available to it the Investment Tax Credit, the Extended Federal Energy Tax Credit, Equipment ACRS Deductions and Improvements ACRS Deductions and all other tax benefits available under the Code, from time to time, and corresponding California income tax benefits, including, but not limited to the California Solar Energy Tax Credit, with no recapture of any regular investment tax credit or energy investment tax credit; (b) the General Partners will keep accurate records of the revenues and expenses of the Partnership and will submit reports and other documents required by Article XII to the Partners within the time periods allowed therein; (c) the Managing General Partner will locate and hire, either on behalf of the Partnership or directly on its own behalf or through subcontractors to-the Partnership, all personnel to operate the Plant and all administrative and supervisory personnel for the Plant; and (d) The General Partners shall distribute, subject to any limitation contained in any Operative Document or the Disbursement Agreement, to the Partners at least quarterly all Partnership cash in excess of its needs for debt service, operating and maintenance expenses and a reasonable reserve for emergencies. (e) Upon failure of the prompt payment by Luz Israel of all amounts due as set forth in a Warranty Certificate, the General Partners shall cause a vote of the Limited Partners, within 30 days of delivery of such Warranty Certificate, with respect to any action to be taken by the Partnership with respect to a draw under the Warranty Letter of Credit, and shall cause the Disbursement Trustee to make a draw under the Warranty Letter of Credit if a majority of the Limited Partners so vote provided however that with respect to any amount due with respect to the calendar year 1997, the Managing General Partner shall make a draw under the Warranty Letter of Credit in an amount equal to the lesser of: (x) the amount set forth in the Warranty Certificate; and (y) the then principal amount of the Warranty Letter of Credit. 8.3 Certain Limitations (a) Except as otherwise provided in Paragraph 8.3(b) and (c), the General Partners shall not do any of the following:
	(i) Any act in contravention of this Agreement; (ii) Confess a judgment against the Partnership; (iii) After the Closing Date, admit a person or entity as a General Partner or Limited Partner, except as provided in Article IX or X or Paragraph 5.3; (iv) Possess Partnership property or sell, transfer, assign, pledge or subject to mortgage or security interest any Partnership property for other than a Partnership purpose set forth in Paragraph 4.1; (v) Sell, exchange, lease, mortgage, pledge, or otherwise transfer all or a substantial part of the assets of the Partnership except as permitted by Paragraph 8.1(e) or as may be required to secure the Nonrecourse Notes as contemplated by the Security Documents, the Indenture and the Note Purchase Agreement; (vi) Suffer indebtedness by the Partnership other than in the ordinary course of its business and as specifically permitted by the last clause of Paragraph 8.1(e); (vii) make or permit any substantial modification to the EPC Contract; or (viii) Except as otherwise Authorized by this agreement, take or authorize any of the following actions, each of which involves an actual or potential conflict of interest with the Partnership: (A) any termination, cancellation, waiver, amendment or modification in any significant respect of any Operative Document or any contract entered into pursuant to (B) below, (B) entering into any contract in which Luz International Limited or any of its Affiliates or any officers, directors of any thereof is a party or has a material interest other than the Expansion Agreement related to the Partnership's acquisition, ownership and operation of the Plus System (the "Expansion Agreement") and the agreements referenced therein, or (C) take any action which pursuant to the terms of Section 4.3 of the Project Management Agreement requires the approval of the Partnership; provided, however, that the General Partners are hereby permitted to enter into, execute, or consent to, as the case may be, an amendment to the Ground Lease, as amended, and to the Common Facilities Co-Tenancy Agreement, as amended, among Luz Solar Partners Ltd., III, Luz Solar Partners Ltd., IV, Luz Solar Partners Ltd., V ('LSP V'), Luz Solar Partners Ltd., VI ('LSP VI') and Luz Solar Partners Ltd., VII ('LSP VII') (including execution of a Subdivision Map related thereto) in such form as the General Partners may deem advisable in order to (a) permit the LSP VI and LSP VII partnerships to have principal use of approximately 10 acres of the Common Area immediately south of the LSP V evaporation pond otherwise governed by the Common facilities Co-Tenancy Agreement and (b) to remove a strip of land approximately 67 feet wide by 6,000 feet long along the boundary of Parcels 7 and 8 under the Ground Lease from the Common Area and add it to Parcels 7 and 8 for the benefit of LSP VI and LSP VII. (ix) Unless sixty (60) days prior notice shall have been given to each Limited Partner, enter into any contract (other than: those in effect as of December 19, 1986; the Expansion Agreement; the other agreements referred to in the Expansion Agreement, the Note Purchase Agreement; the other agreements referred to in the Note Purchase agreement; the Refinancing Agreement and the other agreements referred to in the Refinancing Agreement; any actions specifically authorized by this agreement as specified in Paragraphs 8.1(c), W and (1)) requiring the expenditure of more than one million dollars annually (except where such expenditure is required to avert an emergency as to meet other extraordinary circumstances where such prior notice is impracticable).
(b) In the event that the Institutional Lender, as permitted by the Disbursement Agreement, desires to approve a substitute for the Warranty Letter of Credit Bank that does not meet the standard set forth in Section 6.04(b) of the Disbursement Agreement (a "Change"), then the General Partners shall not consent to any such Change on behalf of the Partnership unless:
	(i) Each Limited Partner has been mailed notice of such proposed change and Limited Partners owning Interests of more than five percent (5%) have not delivered written notice of their objection to the Change within 30 days of the later of the mailing or other delivery of such notice; or (ii) Whether or not the notice of such an objection is received, the Change has been approved by the vote or written consent of Two Thirds of the Limited Partners.
(c) In the event that Luz International or any of its Affiliates requests a change in the Warranty Letter of Credit Bank, no such change in such issuer shall take place and the General Partners shall not consent to any such change on behalf of the Partnership unless each Limited Partner has been mailed or otherwise delivered notice of such change and it has been approved by the vote or written consent of Two Thirds of the Limited Partners. (d) The General Partners shall not cause the Disbursement Trustee to make a draw under the Warranty Letter of Credit unless so authorized pursuant to Paragraph 8.2(e) and will not take any other action pursuant to Section 17 of the Luz Israel Performance Warranty without the approval of a majority of the Limited Partners. ARTICLE IX. CONVEYANCE OF INTERESTS IN THE PARTNERSHIP 9.1 General Provisions Limited Partners may not sell, transfer, assign or subject to a security interest all or any part of their Interests except as permitted in this Article IX, and any act in contravention of this Article IX shall be null and void ab initio. No Partner may create a fractional unit, except for fractional units arising by reason of divorce or transfers occasioned by death (whether by reason of termination of a trust, or the provisions of a will or the laws of intestate succession). 9.2 Limited Partners Except as set forth in Paragraph 9.2(f), Limited Partners may not sell, transfer, assign, or subject to a security interest any or all of the Interests owned by them, except with the consent of the General Partners (which will not be unreasonably withheld) and provided, that; (a) Such Limited Partner and the respective purchaser, transferee, or assignee each executes, acknowledges, and delivers to the General Partners such instruments of transfer and assignment with respect to such transactions as are satisfactory in form and substance to the General Partners; (b) Such Limited Partner furnishes either an opinion of counsel, or other acceptable evidence, satisfactory in form and substance to the General Partners, to the effect that: (i) the sale, transfer, or assignment will not dissolve the Partnership or otherwise impair the ability of the Partnership to be treated as a partnership under the federal income tax laws; (ii) such sale, transfer, or assignment will not violate any applicable Federal or state securities law; (iii) such sale, transfer, or assignment will not cause the Partnership to lose its exemption from Federal and state public utility laws provided by the Public Utility Regulatory Policies Act of 1978; and (iv) such sale, transfer or assignment will not cause any negative effect to existing Partners by reason of any regulations promulgated pursuant to Section 79 of the Deficit Reduction Act of 1984; (c) The Partnership is paid a reasonable transfer fee which is sufficient to pay actual and reasonable costs and expenses of the Partnership-in connection with such transactions; (d) The purchaser, transferee, or assignee represents in writing that the Interests are for such person's own account for long term investment and not with a view toward resale, fractionalization, division, or distribution thereof in a manner that would violate Federal or state securities laws or require registration thereunder; (e) Such purchaser, transferee, assignee, or holder of such security interest (or any person who acquires such Interests upon foreclosure of such security interest) shall not become a Limited Partner unless the General Partners consent in writing to such person becoming a Limited Partner, which consent may be given or withheld in the sole discretion of the General Partners. Any such purchaser, transferee, assignee, or holder of such security interest (or any person who acquires such Interests upon foreclosure of such security interest) who is not admitted as a Limited Partner shall be entitled, to the extent assigned, only to the profits, losses and distributions to which the assigning Limited Partner would have been entitled and shall not be entitled to any of the rights as Limited Partner, including, without limitation, any right to: (i) vote on any Partnership matter, (ii) require any information or accounting from the Partnership, (iii) inspect the Partnership's books and records, or (iv) make or approve any Partnership decision or otherwise participate in the management of the Partnership. The assigning Limited Partner shall remain a Limited Partner until such time, if any, that the General Partners consent to the assignee becoming a Limited Partner and the provisions of Section 9.3 are otherwise complied with; and (f) The Prudential Insurance Company of America may sell, transfer, assign or subject to a security interest any or all of its Interests, and the purchaser, transferee or assignee of any such Interest shall become a Limited Partner, in each case without the consent of the General Partners, provided that in connection therewith The Prudential Insurance Company of America and its purchaser, transferee or assignee meet the requirements of paragraphs 9.2 (a), (b), (c) and (d) and 9.3(a), (b) and (c) hereof and The Prudential Insurance Company of America furnishes to the General Partners an opinion of counsel selected by The Prudential Insurance Company of America to the effect that New Jersey Law requires disposition of its assets to be entirely within its control. 9.3 Admission as Limited Partner If the General Partners consent to the admission as a Limited Partner of a purchaser, transferee or assignee permitted by paragraph 9.2, or if no such consent of the General Partners is required in accordance with Paragraph 9.2(f) hereof, and such purchaser, transferee or assignee (a) elects to become a Limited Partner by delivering a written notice of such election to the General Partner, (b) executes and acknowledges such other instruments as the General Partners may deem necessary, required, or advisable to effect the admission of such person as a Limited Partner, including without limitation the written acceptance and adoption by such person of the provisions of this Agreement, and (c) pays a reasonable transfer fee to the Partnership which is sufficient to cover all actual and reasonable expenses in connection with the admission of such person as a Limited Partner, then, all steps shall be taken which, in the opinion of the General Partners, are reasonably necessary to admit such person under the Act as a Limited Partner, and such person shall thereupon become a Limited Partner. 9.4 [INTENTIONALLY OMITTED] 9.5 Purchase of Interests by the General Partners Except with the consent of Two-Thirds of the Limited Partners, no General Partner shall be permitted to purchase any portion of the Partnership Interests of any Limited Partner after December 31, 1986. 9.6 Death or Dissolution of a Class A Limited Partner or Other Holder or Spouse Thereof Upon the death or dissolution of a Class A Limited Partner, or other Holder of Class A Units, such Limited Partner's estate, devisee, heirs and/or transferees shall succeed to such Limited Partner's Interests and shall be bound by the terms and provisions of this Agreement. However, in the event that any Unit of the deceased or dissolved Class A Limited Partner or spouse thereof or other Holder of Class A Units does not pass to a single trust or passes to more than one heir, devisee or transferee, or, upon termination of any such trust, is distributed to more than one beneficiary, then, in that event, all such heirs, devisees, transferees and/or beneficiaries ("Distributees") shall, within ninety (90) days after distribution by the estate of the deceased Limited Partner or other Holder of Interests or by the representative of the Limited Partner so dissolved, execute and deliver to the General Partners a written instrument (including a power of attorney) appointing one person, firm or corporation as and to be the agent ("Agent") of and for the Distributees. The Agent shall be responsible for collecting, receiving and making all payments and contributions required hereunder, shall vote all Units of the Distributees, and shall perform all other obligations of such Distributees performable by reason of or arising from their Units, and any and all payments and/or disbursements due the Distributees for or arising from their Units shall be deemed to have been validly made to such Distributees by paying the same to the Agent. In the event that the Distributees for any reason fail to designate an Agent in writing in the manner and within the time prescribed above and continue to fail to cure such default after ten (10) days written notice from the General Partners to correct the same, the General Partners shall have the right, at their election, to withhold all sums that are payable with respect to the Units' of the Distributees until such time as the Partnership is dissolved or such default is cured. So long as such default exists with respect to any Distributee, their Units may not be voted. Whenever units may not be voted on a transaction by reason of the previous sentence, the Units deemed issued and outstanding and owned by the Limited Partners shall be reduced by the number of the Units which may not be voted. Upon the death of the spouse of a Class A Limited Partner or other Holder of Class A Units having a community property interest in any Units, the foregoing provisions of this Section 9.6 shall apply to all of the deceased spouse's community property interest in the surviving spouse's Units in the Partnership which does not pass to the surviving spouse by will or through operation of law, and such provisions shall be applied to such Units as though the Limited Partner or Holder of Class A Units had owned such Units and had died on the date of such Class A Limited Partner's spouse's death leaving such Units to the actual recipients thereof. 9.7 Voluntary Withdrawal by Limited Partner If at any time during the term of the Partnership, a Limited Partner or any Affiliate of a Limited Partner, by reason of its interest in the Partnership or any transaction contemplated by this Agreement or the Project Participation Agreement shall be deemed by any governmental authority having jurisdiction to be an "electric utility", a "public utility", a "public utility holding company" or a similar entity subject to regulation under the Federal Power Act, the Public Utility Holding Company Act of 1935, as amended, the California Public Utility Law or any other Federal, state or local law or regulation, then, upon demand made by such Limited Partner to the Managing General Partner, the Partnership shall forthwith purchase and such Limited Partner shall forthwith sell to the Partnership, all right, title and interest in the limited partnership interest of such Limited Partner in the Partnership for a price equal to the present value of all future distributions to such Limited Partner of income and capital, as determined by a firm of independent accountants based on the following assumptions:
	(i) a discount rate of 11 percent per annum; (ii) the sale of all of the assets of the Partnership at the termination of the Partnership.
The purchase price as so calculated shall bear interest from the date of sale at the rate of 11 per cent per annum compounded annually and shall be deferred by such Limited Partner and paid by the Partnership in installments equal to the amount of income and capital that the Partnership would have distributed to such Limited Partner had it not sold its limited partnership interest in the Partnership, including any amounts that would have been distributed to such Limited Partner upon the liquidation of the Partnership. Any amount remaining upon the liquidation of the Partnership and payment of such income and capital to such Limited Partners shall be extinguished. ARTICLE X. WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER: ELECTION OF A GENERAL PARTNER 10.1 Resignation of, Withdrawal of, or Assignment by a General Partner The General Partners shall not have the right to withdraw their interests in or resign from the Partnership, except as provided in the Successor General Partner Agreement. Except as otherwise provided in the Successor General Partner Agreement, the General Partners may not sell, transfer, assign, or subject to a security interest all or any part of their Interests to any person, or admit any person as substitute General Partners. However any General Partner may substitute any other person or entity as a substitute General Partner provided, that such substitution is consented to in writing by all other General Partners and approved by the-vote or written consent of Two-Thirds of the Limited Partners. 10.2 Removal of a General Partner A General Partner shall be removed as a General Partner of the Partnership effective as of the date specified in paragraph 10.3 upon the vote or written consent of a majority of the Limited Partners to remove such General Partner, if such General Partner is in default pursuant to the terms of this Agreement, and has not cured such default within thirty (30) days after written notice thereof from the Partners, or without cause, upon the vote or written consent of Two Thirds of the Limited Partners who are not affiliates of any General Partner to remove; provided, however, such removal shall not eliminate any then existing obligations of the Partnership to such General Partner or the General Partner to the Limited Partners. 10.3 Notice of Removal Written notice of the removal of a General Partner shall be given by the Partners voting to remove such General Partner pursuant to paragraph 10.2 hereof, to such General Partner and to all other Partners. Such notice shall set forth the day upon which the removal is to become effective, which date Shall not be less than thirty (30) days after such notice is given to the last party required to be notified. 10.4 Termination of a General Partner A General Partner shall cease to be a General Partner of the Partnership upon the happening of any of the following events: (a) The General Partner is removed as a General Partner as provided in paragraph 10.2. (b) An order for relief against the General Partner is entered under Chapter 7 of the Federal Bankruptcy Act, or the General Partner: ii makes a general assignment for the benefit of creditors, (ii) files a voluntary petition under the Federal Bankruptcy Act, (iii) files a petition or answer seeking for that General Partner any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law, or regulation, (iv) files an answer or other pleading admitting or failing to contest material allegations of a petition filed against that General Partner in any proceeding of this nature or (v) seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of the General Partner or of all or any substantial part of that General Partner's properties. (c) Sixty (60) days after the commencement of any proceeding against the General Partner seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or within sixty (60) days after the appointment without that General Partner's consent or acquiescence of a trustee, receiver, or liquidator of the General Partner or all or any substantial part of that General Partner's properties, the appointment is not vacated or stayed, or within 60 days after the expiration of any such stay, the appointment is not vacated. (d) In the case of an Individual General Partner, either of the following: (i) the death of that Individual General Partner, or (ii) the entering by a court of competent jurisdiction of an order adjudicating that Individual General Partner incompetent to manage his or her person or estate. (e) In the case of a Corporate General Partner, the filing of a certificate of dissolution, or its equivalent, for the Corporate General Partner. (f) Any other event specified in the Act. 10.5 Liability of General Partner after Termination Upon a General Partner's ceasing to be a General Partner in accordance with the provisions of the Agreement, all future liability of the applicable General Partner as a General Partner shall cease as provided in the Act and the Partnership shall promptly take all steps reasonably necessary under the Act to cause such cessation of liability. The remaining General Partners shall amend the Certificate of Limited Partnership to reflect that the former General Partner is no longer a General Partner of the Partnership. 10.6 Compensation of General Partner Upon Termination Upon a General Partner ceasing to be a General Partner in accordance with the provisions of this Agreement, such General Partner's Interest in the Partnership shall be converted from a general partnership Interest to a limited partnership Interest and such person shall be forthwith admitted as a Limited Partner of the Partnership except that such General Partner shall not be entitled to vote on the admission of a new General Partner. 10.7 Election of Substitute General Partner Upon the last General Partner ceasing to be a General Partner in accordance with the Agreement or within thirty (30) days thereafter, if, pursuant to Section 11.2 of the Agreement, the Limited Partners elect to continue the business of the Partnership, substitute General Partners may be elected by the unanimous vote or written consent of the Limited Partners. 10.8 Election of Additional General Partners Unless the last General Partner shall have ceased to be a General Partner in accordance with this Agreement, upon the vote or written consent of at least a Majority of the Limited Partners, any person or entity may be elected a General Partner. Such General Partner shall not be required to have an Interest in the Partnership. Upon such election, said additional General Partner shall have all the rights, powers and duties of a General Partner under this Agreement. 10.9 [intentionally omitted] 10.10 Change in Managing General Partners A Majority of the Limited Partners may by vote or written consent, with or without cause, change the Managing General Partner and designate any other General Partner (who consents to serve) as the Managing General Partner. Any such change shall be effective immediately upon notice of such vote or consent being delivered to the removed Managing General Partner. ARTICLE XI DISSOLUTION AND WINDING-UP OF THE PARTNERSHIP 11.1 Dissolution of the Partnership The Partnership shall be dissolved upon the first of any of the following events to occur: (a) The last General Partner ceases to be a General Partner in accordance with the provisions of this Agreement unless the Partners agree in writing to continue the business of the Partnership as provided in paragraph 11.2 and to admit one or more General Partners as provided in paragraph 10.7. A General Partner ceasing to be a General Partner shall not dissolve the Partnership if there is a remaining General Partner or a substitute General Partner who elects to continue the business of the Partnership. Such General Partner is hereby authorized to continue the business of the Partnership. (b) The vote or written consent to dissolve by all General Partners and Two Thirds of the Limited Partners. (c) The expiration of the term of the Partnership (d) The sale, transfer or other irrevocable disposition of all or substantially all of the property of the Partnership. (e) Otherwise by operation of law. 11.2 Election upon Dissolution Upon a dissolution of the Partnership pursuant to paragraph 11.l (a), any one or more of the Limited Partners shall, promptly after such dissolution, give notification thereof to the other Limited Partners and shall call for a vote of the Limited Partners to continue the business of the Partnership or to wind-up the Partnership pursuant to paragraph 11.3 of this Agreement. The former General Partner shall be deemed to have elected and hereby agrees to continue the business or the Partnership, and if all Limited Partners elect affirmatively to continue the business of the Partner- ship a substitute General Partner shall be elected pursuant to Paragraph 10.7 of this Agreement and all of the Limited Partners shall execute a unanimous written consent or other written agreement to evidence their election to continue the business of the Partnership. 11.3 Winding-Up of the Partnership Upon the election of the Partners to wind-up the Partnership, or the failure of the Limited Partners to elect such election in writing or to elect a substitute General Partner pursuant to paragraph 11.2, or upon a dissolution of the Partnership pursuant to paragraph 1l.l(b), 1l.l(c), 11.1(d), or 1l.l(e), the General Partners (or if there is not a General Partner, a substituted General Partner or liquidator a General Partner, a substituted General Partner or liquidator elected by a Majority of the Limited Partners) shall take full account of the partnership's assets and liabilities and the obtaining the fair value thereof, and the proceeds therefrom, after the allocations prescribed in Paragraph 7.2 have been made for the year of dissolution, shall be applied and distributed in the following order of priority: (a) To the payment of the debts and liabilities of the Partnership and the expenses of liquidation in the following order: (i) those owing to creditors other than Partners, and (ii) those owing to Partners. (b) To the setting up of any reserves which the General Partner may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partner- ship. (c) To Partners and former Partners in satisfaction of liabilities for distributions under Sections 15661, 15664 and 15665 of the Act. (d) To Partners in accordance with their respective positive capital account balances, and former Partners to the extent of amounts due pursuant to section 9.7 of the Agreement. (e) To Partners in accordance with their respective Interests. ARTICLE XII. BOOKS OF ACCOUNT, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING AND TAX ELECTION 12.1 Books of Account The Partnership's books and records and the Agreement shall be maintained at the principal office of the Partnership. The financial records of the Partnership shall be maintained in accordance with generally accepted accounting principles for federal income tax purposes. The books and records shall reflect all Partnership transactions and be appropriate and adequate for the Partnership's business. The Limited Partners and their designated representatives, and the FSLIC in the event that any FSLIC-insured, federally chartered savings associations are Limited Partners under this Agreement, shall be permitted to inspect and copy all books and records during normal business hours. Without limiting the generality of the foregoing provisions, the Partnership shall keep at its principal office all of the following: (a) A current list and the full name and last known business or residence address of each Partner set forth in alphabetical order together with the contribution and the share and profits and loss of each Partner. (b) A copy of the Certificate of Limited Partner- ship and all Certificates of Amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed. (c) Copies of the Partnership's Federal, state, and local income tax or information returns and reports, if any, of the six most recent taxable years and all relevant records for as long as necessary to satisfy applicable law. (d) Copies of the original partnership agreement and all amendments thereto. (e) Financial statements of the Partnership for the six most recent fiscal years. (f) The Partnership's books and records for at least the current and past three fiscal years. Upon the request of a Limited Partner, the General Partners shall promptly deliver to the Limited Partner, at the expense of the Partnership, a copy of the information required to be maintained by clauses (a), (b), or (d) immediately above. 12.2 Fiscal Year The fiscal year of the Partnership shall be the calendar year. 12.3 Accounting and Reports As soon as reasonably practicable after the end of each fiscal year, but not later than seventy-five (75) days after such end, each Partner shall be furnished with a copy of the balance sheet of the Partnership as of the last day of such fiscal year, an income statement for such fiscal year, and a statement showing the amounts allocated to or allocated against such Partner's Capital Account pursuant to the Agreement during or in respect of the year, and all items of income, gain, deduction, credit, or loss allocated for purposes of the Code as amended from time to time, and any applicable state or local income tax laws pursuant to the Agreement. Such balance sheet and statement of income shall be prepared on the accrual method of accounting. The Managing General Partner shall notify each Limited Partner, promptly upon obtaining knowledge thereof, of any default under the Operative Documents which, in its judgment, is likely to have a material adverse effect on the Project. 12.4 Capital Accounts (a) A capital account shall be established for each Partner, and shall be increased by (i) the amount of any Capital Contribution made by the Partner, (ii) the fair market value of any property contributed by the Partner to the Partnership (net of liabilities securing such contributed property that the partnership is considered to assume or take subject to under section 752 of the Code, as amended from time to time), and (iii) allocations to the Partner of Net Profits, and shall be reduced by (i) the amount of cash distributed to the Partner, (ii) the fair market value of any property distributed to the Partner by the Partnership (net of liabilities securing such property that such Partner is considered to assume or take subject to under section 752 of the Code, as amended from time to time), and (iii) allocations to the Partner of Net Loss. (b) Upon a distribution in kind of Partnership property, the capital account of each Partner will be debited or credited under Article VII with such Partner's allocable share of the gain or loss which would have been recognized by the Partnership had the property been sold for an amount equal to its fair market value immediately prior to such distribution. (c) If any Interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the capital account of the transferor to the extent it relates to the transferred Interest. (d) The Capital Account of each Partner shall be reduced by an amount equal to the percentage of the "energy percentage" and the 'regular percentage5 of any United States federal investment tax credit in respect of the Project allocated to such Partner (or any predecessor in interest) by which the Partnership is required to reduce its basis in the property eligible for depreciation for federal income tax purposes on account of such credits. (e) The Capital Account of each Limited Partner, to the extent attributable to Class A Units held by such Partner, and of each General Partner, shall be reduced by 63.63 percent of any California solar energy tax credit in respect of the Project allocated to such Partner (or its predecessor in interest) except that if the amount of the reduction pursuant to subparagraph (d) shall be based on a percentage of United States federal investment tax credit that is greater than 50 percent for the "energy percentage" of the United States federal investment tax credit, the amount of the reduction hereunder shall be an amount equal to such percentage of the California solar energy tax credit as may be deemed necessary to ensure that the aggregate Capital Accounts of the Holders of Class A Units will equal one percent (1%) of the aggregate Capital Accounts of the holders of Class B Units (disregarding any portion of such Capital Accounts referable to the ownership of Class A Units) after the adjustment required by clause (d) above and disregarding any other item of income, gain, loss or deduction that may have been credited to the Capital Account of any Partner. (f) The Capital Account of each Partner shall be increased by an amount equal to any increase in the tax basis of the Project attributable to a recapture of any United States investment tax credit in the same proportion as such investment tax credit recapture is allocated to such Partner. 12.5 Banking and Investment Funds All funds of the Partnership shall be deposited with the Disbursement Trustee in accordance with the terms of the Disbursement Agreement or shall be deposited in a separate bank account or accounts in a bank having a net worth and capital surplus in excess of $100,000,000 or invested in U.S. government obligations having maturities of no more than one year, or certificates of deposit rated A-l or P-l by a national banking agency. 12.6 Tax Election Upon the transfer of a Class B Unit in the Partnership or distribution of the Partnership's assets to a Class B Limited Partner, the Tax Matters Partner may cause the Partnership to elect pursuant to Section 754 of the United States Internal Revenue Code of 1954, as amended, to adjust the basis of the Partnership's property as allowed by Section 734(b) and Section 743(b) thereof, upon the consent of Two-Thirds of the Limited Partners. 12.7 Partnership Returns The General Partners shall, for each fiscal year required, file with the U. S. Internal Revenue Service on behalf of the Partnership, a U. S. Partnership Information Return within the time prescribed by law (including extensions) for such filing. The General Partners shall also file on behalf of the Partnership such state, city, or foreign income tax returns as may be required by applicable law. Within 60 days after the end of each fiscal year of the Partnership, the General Partners shall send to each of the Partners such information as is necessary to complete federal and state income tax or information returns, including Schedules K-1 (or their equivalent successor tax reports) and copies of the Partnership's Federal, state, and local income tax or information returns for the year. 12.8 Tax Matters Partners The Managing General Partner is hereby designated as the "Tax Matters Partner' of the Partnership as said term is defined in Section 6231(a)(7) of the Code and any similar provision of. state or local law and agrees to: (i) furnish to the Partners within 10 days of its receipt by the Tax Matters Partner any relevant and material written information, return, statement or other document 4 supplied to the Tax Matters Partner by the Internal Revenue Service in connection with a Partnership level administrative proceeding under sections 6221 through 6233 of the Code, as amended from time to time; (ii) prosecute any petition for a readjustment of Partnership items filed by a Partner under section 6226 of the Code, as amended from time to time; (iii) if any adjustment is made by the Internal Revenue Service correcting a mathematical or clerical error on a Partnership information return, Form 1065, or Schedule K-1 and the Internal Revenue Service is incorrect in making such. adjustment, file a request, under section 6230(b) of the Code, as amended from time to time, that the correction not be made; and (iv) withhold tax pursuant to the Withholding Tax Certificate and in the amount directed a vote of the Majority of the Limited Partners. 12.9 Financial Statements and Reports The General Partners shall deliver audited financial statements to the Partners annually accompanied by a report of independent accountants of recognized national standing. Such statements shall include an income statement, balance sheet and statement of changes in financial condition. Such annual report shall discuss the activities of the Partnership for the year and provide a General Partner's discussion of the results of. operations and other operating and financial data for the year. Such statements and report shall be delivered no later than ninety (90) days after the end of each calendar year. In addition, similar unaudited quarterly statements and quarterly reports shall be prepared and delivered within forty-five days after the end of each calendar quarter. 12.10 Partnership Level Administrative and Judicial Proceedings (a) In the event of any partnership level proceeding instituted by the. Internal Revenue Service pursuant to Sections 6221 through 6233 of the Code, as amended from time to time, the Tax Matters Partner shall upon written request of Two-Thirds of the Limited Partners relinquish control of the nature and content of all action and defense to be taken by the Partnership in response to-such proceeding to the Participants (as defined in the Tax Indemnity Agreement), pursuant to and in accordance with Section 6 of the Tax Indemnity Agreement. In such case, the Tax Matters Partner hereby further agrees to relinquish all control of the nature and content of all proceedings pursuant to section 6221 through 6233 of the Code, as amended from time to time, instituted by or on behalf of the Partnership, including the decision to institute such proceedings, whether administrative or judicial, and whether in response to a previous Internal Revenue Service proceeding against the Partnership or otherwise, to such Participants; or (b) Upon the election of Two-Thirds of. the Limited Partners, such Person as shall be designated by such Partners shall be admitted to the Partnership as a General Partner and shall upon admission to the Partnership be substituted as the Tax Matters Partner of the Partnership. Such substitute Tax Matters Partner shall not be bound by the pro- visions of paragraph (a) above. 12.11 Partnership Information Meetings and Reports (a) Until the later of (i) December 31, 1988; (ii) such time as the Plan has met 95% of its annual projected output; the Managing General Partner shall once each calendar quarter, with the first such meeting to be held during the first calendar quarter of 1987, call a meeting of Limited Partners to discuss and report on Plant operations. Thereafter the Managing General Partners shall call such a meeting at least once each calendar year. (b) So long as the Managing General Partner is obligated to call a quarterly meeting pursuant to paragraph 12.11(a) it shall, on a monthly basis, commencing with the month of January 1987, send a report to each Class B Unit Owner setting forth the amount of electricity produced for said month. Such monthly reports shall be delivered no more than thirty days after the end of the previous month. At such time as quarterly meetings are no longer required, such information shall be delivered on an annual basis and shall be sent no later than forty-five (45) days after the end of the calendar year. (c) At least sixty (60) days prior to the beginning of each Partnership fiscal year commencing after 1987, the Managing General Partner shall send each Limited Partner the proposed budget for the Partnership's next fiscal year, which budget shall, among other things, describe the amount and type of insurance coverage provided for therein and the cost thereof ARTICLE XIII POWER OF ATTORNEY 13.1 Power of Attorney Each Partner holding Interests at the time of admission to the Partnership of less than 5% hereby makes, constitutes, and appoints each of the General Partners, acting alone, and any successor or additional General Partners, with full power of substitution and resubstitution, their true and lawful att3rney for them in their name, place and stead and for their use and benefit, to sign, execute, certify, acknowledge, swear to, file and record this Agreement, and to sign, execute, certify, acknowledge,. file and record all instruments amending this Agreement, as now or hereafter amended, that may be appropriate, and such agreements or other instruments or documents (i) to reflect the exercise by the General Partners of any of the powers granted to them under the Agreement; (ii) to reflect any amendments made to the Agreement by the Partners pursuant to the Agreement (iii) to reflect the admission to the Partnership of any General Partner, Limited Partner, substituted Limited Partner or General Partner, or the withdrawal of any Partner in the manner prescribed in the Agreement; and (iv) which may be required of the Partnership or of the Partners by the laws of the State of California, or any other jurisdiction. Each such Partner authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary or advisable in connection with any of the foregoing, hereby giving such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in and about the foregoing as fully as such Partner might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact shall lawfully do or cause to be done by virtue thereof. 13.2 Duration of Power The power of attorney granted pursuant to paragraph 13.1 of this Agreement: (a) Is a special power of attorney coupled with an interest and is irrevocable, and shall survive the death, dissolution, incompetency, bankruptcy or legal incapacity of the applicable Limited Partner; (b) May be exercised by the attorney-in-fact by listing all of the Partners who have granted a power of attorney pursuant to paragraph 13.1 and who are executing any agreement, certificate, instrument or document with the single signature of such attorney-in-fact acting as attorney-in-fact for all Partners; and (c) Shall survive the delivery of an assignment by a Partner of any or all interests in the Partnership, except that where the purchaser, transferee, or assignee thereof has the right to be, or with the consent of the General Partners is admitted as, a Limited Partner, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling each such attorney-in-fact to execute, acknowledge, swear to, and file any such agreement, certificate, instrument, or document necessary to effect such substitution. Any assignee or successor of a Partner who has granted a power of attorney under paragraph 13.1 does hereby make, constitute, and appoint the General Partners, and any successor or additional General Partners, his attorney-in-fact in the same manner and force and for the same purposes, as the assignor or person succeeded. ARTICLE XIV LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS 14.1 Exoneration Except in case of: (i) bad faith; or (ii) willful misconduct; or (iii) in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances; the doing of any act or the failure to do any act by the General Partners in their capacities as such, the effect of which may cause or result in loss or damage to the Partnership, if done pursuant to the advice of legal counsel employed by the General Partners on behalf of the Partnership., or if done in good faith to promote the best interests of the Partnership, shall not subject the General Partners to any liability to the Partners or the Partnership. The foregoing shall not affect or diminish any rights which the Partnership may have against a General Partner by reason of contracts entered into with such General Partner for the performance of services as contemplated in Section 8.1. The General Partners shall diligently enforce the provisions of all such contracts on behalf of the Partnership. 14.2 Indemnification The Partnership shall defend, indemnify and hold harmless the General Partners including all officers, directors, employees, or agents of the General Partners and each Partnership, employee or agent against all claims, actions, demands, losses, liabilities, costs, expenses (including all attorneys' fees), damages and threat of loss as a result of any claim or legal proceeding relating to the performance or non-performance of any act concerning the activities of the Partnership (other than acts and omissions arising from or in connection with any contract with the Partnership pursuant to which such General Partner acts as agent for the owners of the Plant or performs management, operation, maintenance or other services at the Plant and other than any loss, claim or damage arising out of or based upon any violation of any state or federal securities law, or any rule or regulation promulgated thereunder); provided, however, the person or party against whom a claim is made or legal proceeding is directed must not have been culpable of gross negligence, bad faith or willful misconduct, or, in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances. The Partnership shall advance any and all expenses incurred by a General Partner, agent or employee as described above in defending any proceeding prior to the final disposition of such proceeding; provided, however', that any such General Partner, agent or employee, prior to receiving any advancement hereunder shall execute and deliver to the Partnership an undertaking to repay any and all amounts advanced unless it shall be determined ultimately that such person is entitled to be indemnified as authorized above. 14.3 Liability Notwithstanding anything in this Agreement to the contrary, except for liability described in Paragraph 14.2, the General Partners shall not be personally liable for the return of the Capital Contribution of any Partner, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets. Nothing herein shall affect any liability of any General Partner under any Operative Document other than this Agreement. ARTICLE XV. MISCELLANEOUS 15.1 Notices Except as required by paragraph 15.5, any notice, payment, demand, offer or communication required or permitted to be given by any provision of the Agreement shall be in writing and shall be deemed to have been delivered and given for all purposes (i) if same is actually received, or (ii) if sent by registered or certified mail, postage and charges pre- paid, addressed as follows: To the General Partners or a Limited Partner, at the address set forth on the signature page of this Agreement, or to such other address as such General Partners or Limited Partner may from time to time specify by written notice to the Partnership. Any such notice shall be deemed to be given as of the earlier of the date actually received, or five (5) days after the date of which the same was deposited in a regularly maintained depository for the deposit of United States mail, addressed and sent as aforesaid with postage prepaid. 15.2 Captions Paragraph and other captions contained in the Agreement are for reference purposes only and do not interpret, define or limit the scope, extent or intent of this Agreement, or any provision hereof. 15.3 Severability Every provision of this Agreement is severable. If any term or provision hereof is held to be illegal or invalid for any reason by any duly constituted court, agency, or tribunal, such illegality or invalidity shall not affect the validity of the remainder of the Agreement. 15.4b Amendments Amendments to this Agreement may be proposed by the General Partners or by the Limited Partners having an aggregate Interest of ten percent (10%) or more, and the General Partners shall transmit to the Limited Partners a verbatim statement of any proposed amendment and may include with any such-submission their recommendations as to the proposed amendment. The General Partners shall seek the written vote of the Limited Partners on the proposed amendment or shall call a meeting of the Limited Partners to vote thereon. A proposed amendment shall be adopted and become effective as an amendment hereto -if it receives the affirmative vote of Two Thirds of the Limited Partners. 15.5 Meetings and Means of Voting A meeting of the Partners for any matters on which the Limited Partners may vote may be called by any of the General Partners or by Limited Partners holding more than 10% of the Interests held by all Limited Partners. Whenever the Partners are required or permitted to take any action at a meeting, a written notice of the meeting shall be given not less than 10, nor more than 60, days before the date of the meeting to each Partner entitled to vote at the meeting. The notice shall state the place, date, and hour of the meeting and the general nature of the business to be transacted, and no other business may be transacted. Meetings of Partners may be held at any place within or without the State of California as may be specified in the notice of Meeting. If no place is stated in such notice, the meeting shall be held at the principal executive office of the Partnership. Notice of the meeting shall be given, and voting at the meeting shall be conducted, as provided in Section 15637 of the Act or any successor provision thereto. 15.6 Right to Rely Upon the Authority of the General Partners No person dealing with the General Partners shall be required to determine the General Partners' authority to make any commitment or undertaking on behalf of the Partnership, nor to determine any fact or circumstance bearing upon the existence of their authority. In addition, no purchaser of any asset owned by the Partnership shall be required to determine the sole and exclusive authority of the General Partners to sign and deliver on behalf of the partnership any such instrument of transfer, or to ensure the proper application or distribution of revenues or proceeds paid or credited in connection therewith, unless such purchasers shall have received written notice from the Partnership affecting the same. 15.7 Litigation The General Partners shall prosecute and defend such actions at law or in equity as may be necessary to enforce or protect the interests of the Partnership. The Partnership and the General Partners shall respond to any final decree, judgment, or decision of a court of competent jurisdiction in the matter. The Partnership shall satisfy any such judgment, decree, or decision first out of any insurance proceeds available therefor, and then out of the capital and assets of the Partnership. 15.8 Governing Law The local, internal laws of California shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, except as to the partnership interests of any FSLIC- insured, federal associations that may become Limited Partners under this Agreement as to which applicable federal law and regulations shall be controlling to the extent that such federal law and regulations conflict with the local, internal laws of California. 15.9 Waiver of Action for Partition Each of the parties hereto irrevocably waives, during the term of this Partnership and during the period of its liquidation following any dissolution, any right that such party might have to maintain any action for partition with respect to any of the assets of the Partnership. 15.10 Counterparts This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had executed the same counterpart. All counterparts shall be construed together and shall constitute one agreement. 15.11 Parties in Interest Each and every covenant, term, provision and agreement herein contained shall be binding upon and inure to the benefit of the permitted successors and assigns of the respective parties hereto. 15.12 Integrated Agreement This Agreement supersedes all prior agreements, understandings, restrictions, representations or warranties among the General Partners and the Limited Partners with respect to the subject matter hereof. 15.13 Right to Rely Upon Authority of Person Signing Agreement In the event that a Limited Partner is a trust (with or without disclosed beneficiaries), partnership, limited partnership, joint venture, corporation, or any entity Partners shall (i) not be required to determine the authority to make any commitment or undertaking on behalf of such entity, nor to determine any fact or circumstance bearing upon the existence of his authority; (ii) not be required to see to the application or distribution of revenues or proceeds paid or credited to the person signing the Agreement or any amendment hereto on behalf of such entity; (iii) be entitled to rely upon the authority of the person signing this Agreement or any amendment hereto with respect to the voting of the Interest of such entity and with respect to the giving of consent on behalf of such entity in connection with any matter for which consent is permissible or required hereunder; and (iv) be entitled to rely upon the authority of any general partner, joint venturer, co-trustee, successor trustee, or president, vice president, or other officer (as the case may be) of any such entity the same as though such person were the person originally executing this Agreement or any amendment hereto on behalf of such entity. 15.14 Rights of Non-Recourse Creditors No non-recourse creditor of the Partnership shall have or acquire, at any time as a result of making any loan or advance, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor limited to the particular asset which is the subject of recourse. 15.15 Number and Gender Whenever the singular number is used-in this Agreement and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders and the word "person" shall include corporation, firm, partnership or other form of association. 15.16 Partner Representations Each Partner represents and warrants to the Partnership and to each of the other Partners as follows: (a) He is of full age and has full capacity to contract, and if acting in a representative capacity, is duly authorized to execute this Agreement; (b) He is subscribing for Units for his own account as beneficial owner, for investment purposes only, and not with a view to their subdivision or distribution in a manner that would violate Federal or state securities laws or require registration thereunder, provided that the disposition of his assets shall at all times be within his control. 15.17 Competition: Independent Activities The General Partners and their respective affiliates, and the Limited Partners and their respective affiliates, may individually or otherwise presently own or hereafter acquire interests in enterprises that compete with the Partnership or may themselves manufacture, design, sell or service products that compete with the Partnership, without having or incurring any obligation to offer any interest in such activities to the Partnership. Nothing contained in this Agreement shall prohibit such competition or give the Partnership or any Partner any interest in the revenues, capital, or profits of such enterprises or activities or give the Partnership any right whatsoever to participate therein or share, in any manner, in the income therefrom. IN WITNESS WHEREOF, this Third Amended and Restated Agreement of Limited Partnership has been executed as of this 25 ^th day of May, 1988.

c/o_________________________ 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024	CORPORATE GENERAL PARTNER Luz Partnership Management, Inc. By: /s/ J. F. VERHEY JAMES F. VERHEY President By: /s/ STEPHEN C. BOREK Stephen C. Borek Vice President
c/o Luz Engineering Corporation 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024	INDIVIDUAL GENERAL PARTNERS /s/ P. FRANCOIS Patrick Francois /s/ ARNOLD GOLDMAN Arnold Goldman
CLASS B LIMITED PARTNERS by Luz Engineering Corporation their attorney in Fact by ___________________________	CLASS A LIMITED PARTNERS by Luz Engineering Corporation their attorney in Fact by ___________________________
Withdrawing General Partners LPM IV, Inc. by /s/ J. F. VERHEY JAMES F. VERHEY President	Luz Engineering Corporation by /s/ TERRY A. EVANS Terry A. Evans Vice President

EXHIBIT A Capital Contributions, Percentage Interest, Number of Units Owned and Names of Limited Partners of Luz Solar Partners Ltd. IV, a California Limited Partnership
	California Units		Federal Units		Total Units
	#	Amount	#	Amount	#	Amount	Percentage Ownership	Public Utility
Camotop One Corporation			672	16,800,000	672	16,800,000	26.90470588%
Public Service Resources Corporation			440	11,000.000	440	11,000,000	17.61617647%	*
The Prudential Insurance Company of America			400	10.000,000	400	10,000,000	16.01470588%
CII Solar Power 1. Inc.			304	7,600,000	304	7.600.000	12.17117647%	*
Potomac Capital Investment Corporation			240	6,000,000	240	6,000,000	9.60882353%	*
Delmarva Capital Technology			120	3,000.000	120	3,000,000	4.60441176%	*
CPN Leasco			120	3,000,000	120	3,000,000	4.80441176%	*
Oregon Natural Gas Corp			100	2,500,000	100	2.500,000	4.00367647%
Standard Brands Paint Co.			52	1,300,000	52	1,300.000	2.08191176%
Jerrold Perrenchio	308	7,700,000			308	7,700,000	0.46200000%
Ted Mann	76	1,900,000			76	1,900,000	0.11400000%
Oak/SEGS IV	35	875,000			35	875,000	0.05250000%
Larry Weinberg	34	850,000			34	850,000	0.05100000%
Norman Lear	28	700,000			28	700,000	0.04200000%
Burt Harris	20	500,000			20	500.000	0.03000000%
Crowley SEGS IV	20	500,000			20	500,000	0.03000000%
Seldon Ring	20	500.000			20	500,000	0.03000000%
UCC-1986 Luz Solar IV	19	475,000			19	475,000	0.02850000%
Weyerhauser	13	325,000			13	325,000	0.01950000%
Ronald Katz	11	275,000			11	275,000	0.01650000%
B.G.Cantor	10	250,000			10	250,000	0.01500000%
Cantor Fitzgerald Co. Inc	10	250,000			10	250.000	0.01500000%
David Goodman	10	250.000			10	250,000	0.01500000%
Dean Martin	9	225,000			9	225,000	0.01350000%
A A M Records	9	225,000			9	225,000	0.01350000%
Pardee Construction Co.	7	175.000			7	175,000	0.01050000%
Weyerhauser Mortgage Co	6	150.000			6	150.000	0.00900000%
Norma Ring	4	100,000			4	100.000	0.00600000%
Desert Investments	3	75,000			3	75,000	0.00450000%
Herb Albert	2	50,000			2	50,000	.00300000%
Janie Harris Trust	2	50,000			2	50,000	0.00300000%
Jerome Moss	2	50,000			2	50,000	0.00300000%
Natalie Harris Singer Trust	2	50.000			2	50,000	0.00300000%
Individual General Partners	0	0			0	0	0.50000000%
Corporate General Partners (LEC/LPM)	0	0			0	0	0.50000000%
Total	660	$16,500,000	2,448	$61,200,000	3,108	$77,700,000	100.00000000%

AGREEMENT OF LIMITED

PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., V,

A CALIFORNIA LIMITED PARTNERSHIP

TABLE OF CONTENTS
			Page
I.	DEFINITIONS		1
II.	ORGANIZATION		8
	2.1	Formation	8
	2.2	Certificate of Limited Partnership	9
	2.3	Name	9
	2.4	Use of Name of Limited Partners	9
	2.5	Term	10
III.	PRINCIPAL EXECUTIVE OFFICE		10
IV.	BUSINESS		11
	4.1	Purpose of Partnership	11
	4.2	Activities	11
V.	ADMISSION OF PARTNERS AND CAPITAL CONTRIBUTIONS		12
	5.1	Capital Contribution of Original Limited Partner	12
	5.2	Capital Contribution of General Partners	12
	5.3	Admission and Capital Contribution of Limited Partners	13
	5.4	Interest	14
	5.5	Limited Liability	14
	5.6	Role of Limited Partner	14
	5.7	Withdrawal of Capital Contributions	14
	5.8	Indemnification of Limited Partners	15
VI.	EXPENSES AND COMPENSATION OF THE GENERAL PARTNERS		16
	6.1	General Expenses	16
	6.2	Compensation	16
	6.3	Loans	16
VII.	ALLOCATIONS OF NET PROFITS AND NET LOSS; CASH DISTRIBUTIONS		17
	7.1	General Allocations	17
	7.2	Other Allocations of Income and Credit Items	17
	7.3	Additional Allocations of Items of Expense and Loss	18
	7.4	Other Allocation Rules	20
	7.5	Distributions	21
VIII.	RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNERS		22
	8.1	Powers	22
	8.2	Duties	26
	8.3	Certain Limitations	27
IX.	CONVEYANCE OF INTERESTS IN THE PARTNERSHIP		29
	9.1	General Provisions	29
	9.2	Limited Partners	30
	9.3	Admission as Limited Partner	33
	9.4	[intentionally omitted]	33
	9.5	Purchase of Interests by the General Partners	33
	9.6	Death or Dissolution of a Class A Limited Partner or Other Holder or Spouse Thereof	34
	9.7	Voluntary Withdrawal by Limited Partner	36
	9.8	Non-Utility Status	37
X.	WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER; ELECTION OF A GENERAL PARTNER		39
	10.1	Resignation of, Withdrawal of, or Assignment by a General Partner	39
	10.2	Removal of a General Partner	39
	10.3	Notice of Removal	40
	10.4	Termination of a General Partner	40
	10.5	Liability of General Partner after Termination	42
	10.6	Compensation of General Partner Upon Termination	42
	10.7	Election of Substitute General Partner	43
	10.8	Election of Additional General Partners	43
	10.9	[intentionally omitted]	43
	10.10	Change in Managing General Partners	43
XI.	DISSOLUTION AND WINDING-UP OF THE PARTNERSHIP		44
	11.1	Dissolution of the Partnership	44
	11.2	Election upon Dissolution	45
	11.3	Winding-Up of the Partnership	45
XII.	BOOKS OF ACCOUNT, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING AND TAX ELECTION		47
	12.1	Books of Account	47
	12.2	Fiscal Year	48
	12.3	Accounting and Reports	48
	12.4	Capital Accounts	49
	12.5	Banking and Investment Funds	52
	12.6	Tax Election	53
	12.7	Partnership Returns	53
	12.8	Tax Matters Partner	54
	12.9	Financial Statements and Reports	55
	12.10	Partnership Level Administrative and Judicial Proceedings	56
	12.11	Partnership Information Meetings and Reports	57
XIII.	POWER OF ATTORNEY		58
	13.1	Power of Attorney	58
	13.2	Duration of Power	60
XIV.	LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS		61
	14.1	Exoneration	61
	14.2	Indemnification	62
	14.3	Liability	63
XV.	MISCELLANEOUS		63
	15.1	Notices	63
	15.2	Captions	64
	15.3	Severability	64
	15.4	Amendments	64
	15.5	Meetings and Means of Voting	65
	15.6	Right to Rely Upon the Authority of the General Partners	65
	15.7	Litigation	66
	15.8	Governing Law	66
	15.9	Waiver of Action for Partition	67
	15.10	Counterparts	67
	15.11	Parties in Interest	67
	15.12	Integrated Agreement	67
	15.13	Right to Rely Upon Authority of Person Signing Agreement	68
	15.14	Rights of Non-Recourse Creditors	69
	15.15	Number and Gender	69
	15.16	Partner Representations	69
	15.17	Competition: Independent Activities	70
Exhibits:
A.	Capital Contribution, Percentage Interests and Number of Units Owned		68

FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., V a California limited partnership
PARTIES:	LUZ ENGINEERING CORPORATION, a California corporation, as a Corporate General Partner, Patrick Francois, an individual, as an Individual General Partner, Arnold Goldman, an individual, as an Individual General Partner, Jane Margolis, an individual, as the Original Limited Partner, the Class B Partners listed on Exhibit A and all other persons and entities who hereafter may be admitted to the Partner ship as general or limited partners.
AGREEMENT:
ARTICLE I. DEFINITIONS 1.0 For all purposes of this Agreement, unless the context otherwise requires or the term is otherwise defined herein, capitalized terms are used herein with the meanings given in Schedule X to the Project Participation Agreement. 1.1 " Act " means the California Revised Limited Partnership Act, California Corporations Code, Chapter 3. 1.2 " Agreement " means this Agreement of Limited Partnership, as amended from time to time. 1.3 " Capital Account " shall have the meaning set forth in Paragraph 12.4 hereof. 1.4 " Capital Contribution " means, with respect to any Partner, a contribution by such Partner to the capital of the Partnership. 1.5 " Class A Unit " means a Unit entitling the owner thereof to a 0.00126923% share (computed as set forth in Paragraph 1.14) (0.99% for all Class A Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, as amended from time to time, as well as a .126923% share (99% for all Class A Units) of any solar energy tax credit that the Partnership may be entitled to pursuant to the laws of the State of California, and obligating the owner thereof to make a Capital Contribution of $25,000. 1.6 " Class B Unit " means a Unit entitling the owner thereof to a 0.04003676% share (computed as set forth in Paragraph 1.14) (98.01% for all Class B Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, as amended from time to time. Class B Units are not entitled to any share of any solar energy tax credit to which the Partnership may be entitled under the laws of California. Each Class B Unit obligates the owner thereof to make a Capital Contribution of $25,000. 1.7 " Closing Date " means the date on which each Limited Partner (other than the Original Limited Partner) will deliver its Initial Capital Contribution. 1.8 " Code " means the Internal Revenue Code of 1986, as amended from time to time. 1.9 " Corporate General Partner " means Luz Engineering Corporation ("LEC"), and any other corporation admitted as a general partner of the Partnership in place of or in addition to such corporation. 1.10 " General Partners " means Luz Engineering Corporation, Patrick Francois, Arnold Goldman, and all successors or additional general partners of the Partnership approved pursuant to this Agreement. A "General Partner" shall mean any of the General Partners. 1.11 " Holders of Interests " means those persons or entities which from time to time are shown on the books and records of the Partnership as being owners' of Interests, or a fraction thereof, whether or not such persons or entities have been admitted to the Partnership as Limited Partners. 1.12 " Individual General Partner " means Patrick Francois, Arnold Goldman and any other individual admitted as a general partner of the Partnership in place of or in addition to Patrick Francois or Arnold Goldman. 1.13 " Initial Capital Contribution " means with respect to each Partner the original amount of cash contributed to the capital of the Partnership which amount shall be no less than $25,000 per Unit for a Class A Unit and no less than $14,502 per Unit for a Class B Unit. 1.13a " Institutional Lender " means The Prudential Insurance Company of America, a New Jersey mutual insurance company. 1.14 " Interest " or " Partnership Interest " means a percentage interest in the profits and losses of the Partnership. The percentage interest attributable to each Class A Unit is 0.00126923% (computed as follows: 1/780 x .99%), representing in the aggregate a 0.99% Interest. The percentage interest attributable to each Class B Unit is 0.04003676% (computed as follows: 1/2448 x 98.01%), representing in the aggregate a 98.01% Interest. The aggregate Interest of the General Partners is one percent. The aggregate Interest of the General Partners shall be allocated among the General Partners on the basis of the percentage obtained by dividing the capital contributed by each General Partner by the capital contributed by all General Partners, except that in all events the Individual General Partners shall have a Partnership Interest of one-half of one percent (divided equally between them). The Interest of a Limited Partner stated as a percentage of all Interests held by Limited Partners is the percentage obtained by adding the percentage interest in profits attributable to each Unit owned by such Partner (both Class A Units and/or Class B Units) and dividing said number by 99. The Interest of a Limited Partner stated as a percentage of all Interests held by Partners shall be the percentage obtained by adding the percentage interest attributable to each Unit owned by such Limited Partner (both Class A Units and Class B Units) together. 1.15 " Limited Partners " means the persons or entities admitted to the Partnership at any time and from time to time as Limited Partners and who have not withdrawn from the Partnership. A General Partner may also be admitted as a Limited Partner. 1.16 " Majority of the Limited Partners " means, at the time of any vote by the Limited Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate Units representing more than fifty percent (50%) of the Interest held by the Limited Partners. 1.17 " Managing General Partner " means the General Partner so designated pursuant to Paragraph 6.2, or any successor selected pursuant to Paragraph 10.10. 1.18 " Net Profits " and " Net Loss " means the Partnership's taxable income or loss for a taxable year, determined in accordance with section 703(a) of the Code, as amended from time to time (for this purpose, all items of income, gain, loss or deduction required to be separately stated pursuant to section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
	(i) Any income of the Partnership which is exempt from federal income tax shall be added to such taxable income or loss; (ii) Any expenditures of the Partnership described in section 705(a)(2)(B) of the Code, as amended from time to time, or treated as section 705(a)(2)(B) expenditures, pursuant to section 1.704-l(b)(2)(iv)(i) of the Treasury Regulations, shall be subtracted from such taxable income or loss; (iii) Notwithstanding any other provision of this Paragraph 1.18, the computation of Net Profits and Net Loss shall give proper effect to Paragraphs 7.2 and 7.3 hereof.
1.18a " 1954 Code " means the Code as amended and in effect immediately before the enactment of the amendments thereto pursuant to the Tax Reform Act of 1986. 1.19 " Non-Interest Bearing Notes " means the non-interest bearing notes to be given the Partnership in the principal amount of $10,498 per Class B Unit, payable in installments (per Unit) of $3,758, $2,655 and $4,085 on the last business day of October, November and December 1987, representing a portion of a limited Partner's Capital Contribution which the General Partner may require to be secured by a letter of credit or other security acceptable to the General Partner. 1.20 " Nonrecourse Notes " means those certain nonrecourse notes in the aggregate original principal amount of $43,000,000, secured by the Plant and certain of the Partnership's other assets, to be executed by the Partnership in favor of the Institutional Lender or any note(s) which may be issued in replacement thereof, which notes shall be secured by the Indenture. 1.21 " Operative Documents " shall be defined as defined in Schedule X to the Project participation Agreement. 1.22 " Offering " means the sale of Units in the Partnership at the Closing Date. 1.23 " Original Limited Partner " means Jane Margolis, an individual. 1.24 " Partners " means collectively the General Partners and all Limited Partners, and reference to a Partner shall be to any one of the Partners. 1.25 " Partnership " means the limited partnership created pursuant to this Agreement and the Act. 1.26 " Plant " or " Project " or " Facility " shall be defined as defined in Schedule X to the Project Participation Agreement. 1.27 " Project Participation Agreement " means that certain Project Participation Agreement dated as of September, 1987 by and among the Partnership, LEC, the Institutional Lender and the initial Class B Partners relative to the purchase by the Class B Partners of their interest in the Partnership and the issuance of the Partnership Note to the Institutional Lender or its assignee(s). 1.28 " Subsequent Contribution " means the contributions that are to be made to the Partnership by the Class B Limited Partners represented by the Non-Interest Bearing Notes. 1.29 " Two-Thirds of the Limited Partners " means, at the time of any vote by the Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate a number of Units representing sixty-six and two thirds percent (66-2/3%) of the Interests held by the Limited Partners. 1.30 " Unit " means an ownership interest in the-Partnership, which is owned by a Limited Partner. Each Unit represents a commitment to make a Capital Contribution of $25,000. There are two kinds of Units, namely Class A Units and Class B Units. There are 780 Class A Units and 2,448 Class B Units. ARTICLE II. ORGANIZATION 2.1 Formation The parties by the execution of this Agreement and the filing of the Certificate of Limited Partnership as provided in Paragraph 2.2 do hereby form a limited partnership under and pursuant to the Act. 2.2 Certificate of Limited Partnership The General Partners shall execute, acknowledge and file with the California Secretary of State the Certificate of Limited Partnership as required by the Act. An amendment to the Certificate of Limited Partnership may be signed, personally or by an attorney-in-fact, by: (a) Any General Partner and the new General Partner if the amendment is caused by the admission of a new General Partner; (b) Any General Partner if a General Partner withdraws or ceases to be a General Partner and the Partnership's business is continued; or (c) Any General Partner under any other circumstances unless otherwise provided by the Act. 2.3 Name The name of the Partnership shall be Luz Solar Partners Ltd, V, a California limited partnership, and the business of the Partnership shall be conducted under that name. 2.4 Use of Name of Limited Partners The General Partners shall not make use of the name of any Limited Partner who is not also a general partner in the conduct of the business of the Partnership. The General Partners shall not, except as may be required by law, disclose the name of any Limited Partner without the previous written consent of such Limited Partner, which consent may be withheld in its discretion. 2.5 Term The Partnership will continue until December 31, 2030, unless sooner terminated as provided herein. ARTICLE III. PRINCIPAL EXECUTIVE OFFICE 3.1 The principal executive office of the Partnership shall be located at 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024, or at any other place within the State of California which the General Partners may designate at any time and from time to time after first giving at least 30 days prior notice to all Limited Partners. The General Partners may establish the principal place or other places of business of the Partnership within the state of California, when the General Partners deem it advantageous to the Partnership, without liability to any Partner. 3.2 The Agent for Service of Process on the Partnership is John Kendall, whose address is 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024. The General Partners shall cause to be filed an amendment to the Certificate of Limited Partnership reflecting any change of address of or replacement of the Agent for Service of Process within 30 days after its occurrence. ARTICLE IV. BUSINESS 4.1 Purpose of Partnership The Partnership has been formed under the laws of the State of California for the purpose of entering into a contract for the construction of the Plant, leasing real and personal property in connection therewith, and owning, financing and arranging for the operation and maintenance of the Plant, which will generate electricity for sale to public utility users in accordance with the Public Utility Regulatory Policies Act of 1978 ("PURPA"), as a "qualifying small power production facility" eligible for exemption from regulation under certain federal and state laws. 4.2 Activities The Partnership's activities shall be limited to those in furtherance of the purposes specified in Paragraph 4.1, including: (a) Entering into the agreements and transactions set forth in Paragraph 8.1 and similar agreements and transactions in substitution or replacement thereof; and (b) Performing all acts necessary to accomplish such purposes. ARTICLE V. ADMISSION OF PARTNERS AND CAPITAL CONTRIBUTIONS 5.1 Capital Contribution of Original Limited Partner The Original Limited Partner has made a contribution of One Hundred Dollars ($100) in cash to the capital of the Partnership. Such capital contribution will be returned to the Original Limited Partner following the admission to the Partnership of any additional Partner pursuant to Paragraph 5.3, at which time all Partners hereby consent to the Original Limited Partner's withdrawal of her capital contribution and hereby waive and release the Original Limited Partner from any liability and from any right, claim or action that they may have against said Limited Partner for such withdrawal. 5.2 Capital Contribution of General Partners The General Partners other than the Corporate General Partner have no fixed obligation to make capital contributions to the Partnership, but the General Partners collectively own a one percent Interest and are entitled to one percent of each item of income, gain, deduction, loss, distribution or credit (including any United States tax credit and the California solar energy credit). The Corporate General Partner shall have an obligation to make and shall be initially credited with Capital Contributions of $34,117 plus any amounts required to be contributed under Section 9.9 of the Project Participation Agreement. LEC further agrees that, it will restore to the Partnership any negative balance in its Capital Account upon the earlier of: (i) its withdrawal as a General Partner, or (ii) the liquidation of the Partnership. 5.3 Admission and Capital Contribution of Limited Partners The General Partners may accept subscriptions, pursuant to the terms of the Offering, for up to 780 Class A Units and up to 2448 Class B Units. Capital Contributions shall be made as specified in Paragraphs 1.5 and 1.6. The Non-Interest Bearing Notes of any Limited Partner shall become immediately due and payable if any payment required to be made thereunder by such Partner is not made when due. Such notes, subsequent to their respective maturity dates, may be assigned by the Partnership to Blount who may further assign such notes to either LEC or Luz Israel in satisfaction of its obligations to them as subcontractors under the EPC Contract and in partial payment of amounts due under the EPC Contract if, but only if, the maker of any such note is in default in payment thereunder at the time of assignment. The Capital Contribution of each Limited Partner shall be set forth in Exhibit A to this Agreement. The Interest of a Limited Partner in the Partnership shall be the percentage determined in accordance with Paragraph 1.14 of this Agreement. 5.4 Interest Capital Contributions to the Partnership do not accrue interest. 5.5 Limited Liability Except as provided in Sections 15652 and 15666 of the Act, no Limited Partner who is not also a General Partner shall be bound by, or liable for, the debts, expenses, liabilities, contracts or any other obligations of the Partnership. Limited Partners shall not be required or obligated to lend any funds to the Partnership or o make further Capital Contributions of any kind whatsoever beyond those described in this Article V. 5.6 Role of Limited Partner No Limited Partner shall take part in the conduct or control of the business of the Partnership or have any right or authority to act for or bind the Partnership in any manner whatsoever. No vote or consent given by any Limited Partner shall ever be construed to make a Limited Partner liable as a General partner or to cause the Limited Partners to have any liability beyond that set forth in Paragraph 5.5. No Limited Partner or any Affiliate shall make any loan to the Partnership. 5.7 Withdrawal of Capital Contributions Except as provided in Paragraph 9.7, no Limited Partner (other than the Original Limited Partner) shall have the right to withdraw or reduce its contribution to the capital of the Partnership, unless (i) all other Partners consent, (ii) all liabilities of the Partnership (except liabilities to the General Partner and to Limited Partners on account of the Capital Contributions) have been paid or there remains property of the Partnership sufficient to pay such liabilities, (iii) this Agreement is amended as to set forth the withdrawal or reduction; and (iv) such distribution does not result in an Indenture Event of Default. Limited Partners shall not have the right to demand or receive property other than cash in return for their contribution, and no Limited Partner shall have priority over any other Limited Partner, either as to the return of contributed capital or as to any profits, losses or distributions, except as set forth in Para graph 5.1. 5.8 Indemnification of Limited Partners The Partnership shall, solely from its assets and without recourse to any General Partner, indemnify, defend and hold harmless the Limited Partners from any loss (other than their Capital Contributions), liability, damage or expense imposed on them related to the ownership of Partnership property or conduct of the Partnership's business other than (i) the repayment of the Interest of a Limited Partner in any distribution whose return is required pursuant to Sections 15652 and 15666 of the Act; and (ii) taxes imposed on or measured by the net income of such Limited Partners. ARTICLE VI. EXPENSES AND COMPENSATION OF THE GENERAL PARTNERS 6.1 General Expenses The General Partners may charge the Partnership and be reimbursed by it for any and all reasonable, ordinary and necessary out-of-pocket expenses actually incurred by them in connection with the performance of the responsibilities of the General Partners to the Partnership and the operation of the Partnership's business but excluding indirect costs and overhead expenses. 6.2 Compensation LEC shall be the Managing General Partner until it ceases to be a General Partner or a new Managing General Partner is selected pursuant to Paragraph 10.10. The Managing General Partner shall not be reimbursed for the cost of any administrative and management services to the Partnership, but Partnership accounting duties may be delegated to a nationally recognized accounting firm and the fees and expenses of such accountants will be borne by the Partnership. The administrative duties and management of the Partnership may be delegated to any competent entity whether or not it is a Partner, but not to a Limited Partner. 6.3 Loans If the General Partners loan money to the Partnership they shall be paid interest on such loans at the prime rate plus one percent (1%) quoted from time to time by the First Interstate Bank of California, or any successor, but never in excess of the maximum rate permitted by law. ARTICLE VII. ALLOCATIONS OF NET PROFITS AND NET LOSS; CASH DISTRIBUTIONS 7.1 General Allocations (a) Except as otherwise provided in Paragraphs 7.2 and 7.3, Net Profits and Net Loss shall be allocated among all Partners, pro rata in accordance with their respective Partnership Interests throughout the year. (b) Profits and Losses shall be determined and specific items of income, gain, loss or credit shall in all events be allocated in the manner necessary to assure compliance with Treasury Regulations Section 1.704-1(b) or any successor provision. 7.2 Other Allocations of Income and Credit Items (a) All items of California solar energy tax credit shall be allocated 3/4 of 1% to LEC, 1/8 of 1% to Patrick Francois, 1/8 of 1% to Arnold Goldman and 99% to the owners of Class A Units. The portion allocated to the owners of Class A Units shall be divided pro rata in accordance with the number of such Units owned by each on the date the property giving rise to such credit was placed in service. (b) To the extent the Partnership has interest income with respect to any borrowing from the Partnership by any Partner, whether stated or pursuant to Section 483 or 1271 through 1288 of the Code, such interest income shall be allocated to the Partner to whom such borrowing relates, and such interest shall not constitute a Capital Contribution. (c) All items of federal investment and energy tax credit shall be allocated among all Partners in accordance with their Interests as of the date the property giving rise to the credit is placed in service. (d) In the event the adjusted tax basis of any property that has been placed in service by the Partnership is increased pursuant to Section 48(q) of the Code, such increase shall be allocated among the Partners in the same proportions as the investment tax credit that is recaptured with respect to such property is shared among the Partners. 7.3 Additional Allocations of Items of Expense and Loss (a) Federal income tax deductions for depreciation allowed under Section 168 of the Code (or the 1954 Code, as appropriate) ("depreciation deductions") shall be allocated among the Partners in accordance with their Interests from and after the date that the property giving rise to such deductions is placed in service, unless regulations are promulgated by the Internal Revenue Service that require that depreciation deductions be applied ratably throughout the taxable year, in which case such deductions shall be specially allocated entirely to new or transferee Partners as of the date of their admission until the cumulative allocations to all Partners equal those that would have been made had such regulations not been promulgated, if permitted under Section 704(b) of the Code and the Treasury Regulations promulgated pursuant thereto. (b) Any reduction in the adjusted tax basis of Partnership property pursuant to Section 48(q) of the Code shall be allocated among the Partners pro rata in accordance with their Interests in the same proportion as the basis of the Property is allocated under Treasury Regulations Section 1.46-3(f)(2)(i). 7.4 Other Allocation Rules (a) Net Profit and Net Loss shall be computed according to the accrual method of accounting for federal income tax purposes and otherwise in accordance with generally accepted accounting principles applied in a consistent manner. (b) The Partnership shall use the interim closing of the books method of accounting upon the admission of a new or transferee Partner or the termination of a Partner's Interest. (c) Except as otherwise provided in this Agreement, whenever a proportionate part of the Partnership Net Profit or Net Loss is credited or charged to a Partner's capital account, every item of income, gain, loss or deduction entering into the computation of such Net Profit and Net Loss shall be considered credited or charged, as the case may be, and every item of credit or tax preference applicable to the period during which such profit or loss was realized shall be allocated but not credited or charged, to such account in the same proportion. 7.5 Distributions (a) The Partnership may, subject to the provisions of Section 5.19 of the Participation Agreement, from time to time, in the sole discretion of the General Partners, distribute cash disbursed to it under the Disbursement Agreement or received as Excluded Payments to the Partners in proportion to their Partnership Interests. (b) Distributions of Partnership assets in respect of Interests shall be made only to the Persons who, according to the books and records of the Partnership, are the record Holders of Interests on the date determined by the General Partners as of which Holders of Interests are entitled to any distribution. The General Partners and the Partnership shall bear no liability for making distributions in accordance with the provisions of the preceding sentence. (c) All amounts withheld pursuant to the Code, as amended from time to time, or any provision of the laws of any taxing jurisdiction with respect to any payment or distribution to the Partnership or to the Partners shall be treated as amounts distributed to the respective Partners on whose account the withholding was imposed for all purposes under this Agreement. ARTICLE VIII. RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNERS 8.1 Powers Subject to the provisions of Paragraphs 8.2 and 8.3 hereof, the management and control of the Partnership and its business and affairs shall rest exclusively with the Managing General Partner, who shall have all the rights and powers which may be possessed by a General Partner pursuant to the Act and such rights and powers as are otherwise conferred by law or are necessary, advisable or convenient to the discharge of its duties under this Agreement and to the management of the business affairs of the Partnership in furtherance of the purposes of the Partnership as set forth in Paragraph 4.1. In the event of any disagreement among the General Partners, the decision of the Managing General Partner shall prevail. Without limiting the generality of the foregoing, the Managing General Partner shall have the rights and powers to do those things set forth below (which subject to Article VI may be exercised at the cost and expense of the Partnership) but only to the extent in the furtherance of the purposes of the Partnership as set forth in Paragraph 4.1: (a) Expend the capital and income of the Partnership in furtherance of the Partnership's business to optimize the economic yield to the Partners. (b) Perform all acts necessary to commence and operate the Partnership's business and in connection therewith to hold, manage, operate, exploit, acquire, and sell assets acquired in connection therewith, to enter into contracts for services, and contracts, as, when, if and under such terms and conditions as the General Partners, in their sole discretion, shall deem advisable. (c) Execute and deliver any deed, bill of sale, mortgage, license, or sublicense, contract for sale, agreement for deed, or other document conveying the interest of the Partnership in any of its assets, or any part thereof, whether held in its name or otherwise. No other signature shall be required. In this regard, the Managing General Partner is expressly authorized to enter into and perform on the Partner ship's behalf the Operative Documents to which the Partnership is a party, including the Project Participation Agreement, the Nonrecourse Notes, the Indenture, the Security Documents, the Project Management Agreement, the EPC Contract, the Ground Lease and any and all documents or agreements related thereto or contemplated thereby. (d) Cause or allow the legal title to, or any legal or equitable interest in, the assets of the Partnership to be kept in the Partnership's name. (e) Borrow or raise monies on behalf of the Partnership in the Partnership name in an amount in the aggregate outstanding at any one time not to exceed $1,000,000 and in connection therewith and from time to time draw, make, accept, endorse, execute and issue promissory notes, drafts, mortgages, and other negotiable or non-negotiable instruments and evidence of indebtedness, and secure the payment thereof and of the interest thereon by mortgage or pledge, conveyance or assignment in trust, of the whole or any part of the assets of the Partnership, including contract rights; provided, however, that a creditor who makes a nonrecourse loan to the Partnership must not have or acquire, at any time as a result of making that loan, any direct or indirect interest in the profit, capital, or property of the Partnership other than as a creditor whose recourse is limited to the specified security, provided further that the $1,000,000 limit set forth above shall not apply to loans secured by or related to any loan made to the Partnership by the General Partner to enable the Partnership to comply with the express provisions of any Operative Document, and that this Paragraph shall not apply to the Nonrecourse Notes or to any other indebtedness that is to be discharged on or before the Closing Date. (f) Engage, retain, or employ, on behalf of the Partnership, such persons, firms or corporations, including the Project Manager under the Project Management Agreement and the Operator under the Operation and Maintenance Agreement, as the General Partners, in their sole discretion, shall deem advisable for the operation and management of the business of the Partnership (including accountants and lawyers) on commercially reasonable terms. (g) Possess, exercise or refrain from exercising all other rights and powers of a General Partner under the Act. (h) Expend the funds of the Partnership for the payment of premiums on insurance policies of any kind, nature, and description, but excluding any insurance protecting the General Partners from liabilities or claims relating to the breach of their fiduciary duties to the Partners or negligence. (i) Enter into contracts, joint ventures, or other transactions on behalf of the Partnership with Limited Partners, subject to the limitations contained in the Act with respect to the preservation of limited liability of such Limited Partners. (j) Admit persons as Limited Partners of the Partnership upon their contribution of the amount specified in Article V or their compliance with the provisions of Article IX. 8.2 Duties The General Partners shall manage and control the Partnership's business and affairs and carry out the business of the Partnership according to their best efforts. The General Partners shall devote such time to the business of the Partnership as the General Partners, in their sole discretion, determine to be necessary and appropriate; provided, however, that: (a) the Managing General Partner will take, or cause to be taken, all steps necessary to operate the Plant in such a manner that the Partnership will have fully available to it the Investment Tax Credit, the Energy Tax Credit Equipment ACRS Deductions and Improvements ACRS Deductions and all other tax benefits available under the Code, from time to time, and corresponding California income tax benefits, with no recapture of any regular investment tax credit or energy investment tax credit; (b) the General Partners will keep accurate records of the revenues and expenses of the Partnership and will submit reports and other documents required by Article XII to the Partners within the time periods allowed therein; (c) the Managing General Partner will locate and hire, either on behalf of the Partnership or directly on its own behalf or through subcontractors to the Partnership, all personnel to operate the Plant and all administrative and supervisory personnel for the Plant. (d) the General Partners shall distribute, subject to any limitations contained in any Operative Document, to the Partners at least quarterly all Partnership cash in excess of its needs for debt service, operating and maintenance expenses and a reasonable reserve for emergencies. (e) upon failure of the prompt payment by Luz Israel of all amounts due as set forth in a Warranty Certificate, the General Partners shall cause a vote of the Limited Partners, within 30 days of delivery of such Warranty Certificate, with respect to any action to be taken by the Partnership with respect to a draw under the Warranty Letter of Credit. 8.3 Certain Limitations (a) The General Partners shall not do any of the following without the consent of Two-Thirds of the Limited Partners:
	(i) Any act in contravention of this Agreement; (ii) Confess a judgment against the Partnership; (iii) After the Closing Date, admit a person or entity as a General Partner or Limited Partner, except as provided in Article IX or X; (iv) Possess Partnership property or sell, transfer, assign, pledge or subject to mortgage or security interest any Partnership property for other than a Partnership purpose set forth in Paragraph 4.1; (v) Sell, exchange, lease, mortgage, pledge, or otherwise transfer all or a substantial part of the assets of the Partnership except as permitted by Paragraph 8.1(e) or as may be required to secure the Nonrecourse Notes as contemplated by the Security Documents, the Indenture and the Project Participation Agreement; (vi) Suffer indebtedness by the Partnership other than in the ordinary course of its business and as specifically permitted by Paragraph 8.1(e); (vii) Make or permit any substantial modification to the EPC Contract; (viii) Take or authorize any of the following actions, each of which involves an actual or potential conflict of interest with the Partnership: (A) any termination, cancellation, waiver, amendment or modification in any significant respect of any Operative Document or any contract entered into pursuant to (B) below, (B) entering into any contract in which Luz International Limited or any of its Affiliates or any officers, directors of any thereof is a party or has a material interest; or (C) take any action which pursuant to the terms of Section 4.3 of the Project Management Agreement requires the approval of the Partnership; or (ix) Unless sixty (60) days prior notice shall have been given to each Limited Partner, enter into any contract (other than those in effect as of the Closing Date) requiring the expenditure of more than one million dollars annually (except where such expenditure is required to avert an emergency or to meet other extraordinary circumstances where such prior notice is impracticable); or (x) Make an optional prepayment of Nonrecourse Notes.
(b) The General Partners shall not do any of the following without the consent of a Majority of the Limited Partners:
	(i) Cause the Disbursement Trustee to make a draw under the Warranty Letter of Credit; or (ii) Take any other action pursuant to Section 17 of the Performance Warranty.
ARTICLE IX. CONVEYANCE OF INTERESTS IN THE PARTNERSHIP 9.1 General Provisions Limited Partners may not sell, transfer, assign or subject to a security interest all or any part of their Interests in the Partnership and no Person shall become an assignee or be admitted to the Partnership as a substitute or additional Partner except as permitted in this Article IX, and any act in contravention of this Article IX shall be null and void ab initio. In no event may any Partner transfer less than whole Units. 9.2 Limited Partners Limited Partners may not sell, transfer, assign, or subject t-o a security interest any or all of the Interests owned by them, except with the consent of the Managing General Partner (which will not be unreasonably withheld) and provided, that; (a) Such sale, transfer or assignment, when aggregated with any prior sales, transfer or assignments of Partnership interests, does not result in a sale or exchange within a 12-month period of 50 percent or more of the total interests in the Partnership's capital and profits within the meaning, and for purposes of, Section 708(b) of the Code; (b) Such Limited Partner and the respective purchaser, transferee, or assignee each executes, acknowledges, and delivers to the General Partners such instruments of transfer and assignment with respect to such transactions as are satisfactory in form and substance to the Managing General Partner; (c) Such Limited Partner furnishes either an opinion of counsel, or other acceptable evidence, satisfactory in form and substance to the Managing General Partner, to the effect that: (i) the sale, transfer, or assignment will not dissolve the Partnership or otherwise impair the ability of the Partnership to be treated as a partnership under the federal income tax laws; (ii) such sale, transfer, or assignment will not violate any applicable Federal or state securities law; (iii) such sale, transfer, or assignment will not cause the Partnership to lose its exemption from certain Federal and state public utility laws provided by the Public Utility Regulatory Policies Act of 1978; and (iv) such sale, transfer or assignment will not cause adverse federal income tax consequences (including without limitation investment tax credit recapture) to the Partnership or any Partner; (d) The Partnership is paid a reasonable transfer fee which is sufficient to pay actual and reasonable costs and expenses of the Partnership in connection with such transactions; (e) The purchaser, transferee, or assignee represents in writing that the Interests are for such person's own account for long term investment and not with a view toward resale, fractionalization, division, or distribution thereof in a manner that would violate Federal or state securities laws or require registration thereunder; provided , however , that the Managing General Partner shall give such consent with respect to any transferee of a Class B Limited Partner that has transferred its Interests in accordance with the provisions of Paragraph 9.8 hereof. (f) Such purchaser, transferee, assignee, or holder of such security interest (or any person who acquires such Interests upon foreclosure of such security interest) shall not become a Limited Partner unless the Managing General Partner consents in writing to such person becoming a Limited Partner, which consent may be given or withheld in the sole discretion of the General Partners; provided, however, that the Managing General Partner shall give such consent with respect to any transferee of a Class B Limited Partner that has transferred its Interests in accordance with the provisions of Paragraph 9.8 hereof. Any such purchaser, transferee, assignee, or holder of such security interest (or any person who acquires such Interests upon foreclosure of such security interest) who is not admitted as a Limited Partner shall be entitled, to the extent assigned, only to the profits, losses and distributions to which the assigning Limited Partner would have been entitled and shall not be entitled to any of the rights as Limited Partner, including, without limitation, any right to: (a) vote on any Partnership matter, (b) require any information or accounting from the Partnership, (c) inspect the Partnership's books and records, or (d) make or approve any Partnership decision or otherwise participate in the management of the Partnership. The assigning Limited Partner shall remain a Limited Partner until such time, if any, that the Managing General Partner consents to the assignee becoming a Limited Partner and the provisions of Paragraph 9.3 are otherwise complied with. 9.3 Admission as Limited Partner If the Managing General Partner consents to the admission as a Limited Partner of a purchaser, transferee or assignee permitted by Paragraph 9.2, and such purchaser, transferee of assignee (a) elects to become a Limited Partner by delivering a written notice of such election to the Managing General Partner, (b) executes and acknowledges such other instruments as the Managing General Partner may deem necessary, required, or advisable to effect the admission of such person as a Limited Partner, including without limitation the written acceptance and adoption by such person of the provisions of this Agreement, and (c) pays a reasonable transfer fee to the Partnership which is sufficient to cover all actual and reasonable expenses in connection with the admission of such person as a Limited Partner, then, all steps shall be taken which, in the opinion of the Managing General Partner, are reasonably necessary to admit such person under the Act as a Limited Partner, and such person shall thereupon become a Limited Partner. 9.4 [intentionally omitted] 9.5 Purchase of Interests by the General Partners Except with the consent of Two-Thirds of the Limited Partners, no General Partner shall be permitted to purchase any portion of the Partnership Interests of any Limited Partner. 9.6 Death or Dissolution of a Class A Limited Partner or Other Holder or Spouse Thereof Upon the death or dissolution of a Class A Limited Partner or other Holder of Class A Units, such Limited Partner's estate, devisee, heirs and/or transferees shall succeed to such Limited Partner's Interests and shall be bound by the terms and provisions of this Agreement. However, in the event that any Unit of the deceased or dissolved Class A Limited Partner or spouse thereof or other Holder of Class A Units does not pass to a single trust or passes to more than one heir, devisee or transferee, or, upon termination of any such trust, is distributed to more than one beneficiary, then, in that event, all such heirs, devisees, transferees and/or beneficiaries ("Distributees") shall, within ninety (90) days after distribution by the estate of the deceased Limited Partner or other Holder of Interests or by the representative of the Limited Partner so dissolved, execute and deliver to the General Partners a written instrument (including a power of attorney) appointing one person, firm or corporation as and to be the agent ("Agent") of and for the Distributees. The Agent shall be responsible for collecting, receiving and making all payments and contributions required hereunder, shall vote all Units of the Distributees, and shall perform all other obligations of such Distributees performable by reason of or arising from their Units, and any and all payments and/or disbursements due the Distributees for or arising from their Units shall be deemed to have been validly made to such Distributees by paying the same to the Agent. In the event that the Distributees for any reason fail to designate an Agent in writing in the manner and within the time prescribed above and continue to fail to cure such default after ten (10) days written notice from the General Partners to correct the same, the General Partners shall have the right, at their election, to withhold all sums that are payable with respect to the Units of the Distributees until such time as the Partnership is dissolved or such default is cured. So long as such default exists with respect to any Distributee, their Units may not be voted. Whenever Units may not be voted on a transaction by reason of the previous sentence, the Units deemed issued and outstanding and owned by the Limited Partners shall be reduced by the number of the Units which may not be voted. Upon the death of the spouse of a Class A Limited Partner or other Holder of Class A Units having a community property interest in any Units, the foregoing provisions of this Paragraph 9.6 shall apply to all of the deceased spouse's community property interest in the surviving spouse's Units in the Partnership which does not pass to the surviving spouse by will or through operation of law, and such provisions shall be applied to such Units as though the Limited Partner or Holder of Class A Units had owned such Units and had died on the date of such Class A Limited Partner's spouse's death leaving such Units to the actual recipients thereof. 9.7 Voluntary Withdrawal by Limited Partner If at any time during the term of the Partnership, a Limited Partner or any Affiliate of a Limited Partner, by reason of its interest in the Partnership or any transaction contemplated by this Agreement or the Project Participation Agreement shall be deemed by any governmental authority having jurisdiction to be an "electric utility", a "public utility", a "public utility holding company" or a similar entity subject to regulation under the Federal Power Act, the Public Utility Holding Company Act of 1935, as amended, the California Public Utility Law or any other Federal, state or local law or regulation, then, upon demand made by such Limited Partner to the Managing General Partner, the Partnership shall forthwith purchase and such Limited Partner shall forthwith sell to the Partnership, all right, title and interest in the limited partnership interest of such Limited Partner in the Partner ship for a price equal to the present value of all future distributions to such Limited Partner of income and capital, as determined by a firm of independent accountants based on the following assumptions:
	(i) a discount rate of 11 percent per annum; (ii) the sale of all of the assets of the Partnership at the termination of the Partnership.
The purchase price as so calculated shall bear interest from the date of sale at the rate of 11 per cent per annum compounded annually and shall be deferred by such Limited Partner and paid by the Partnership, at the times it is otherwise permitted to distribute to Partners, in installments equal to the amount of income and capital that the Partnership would have distributed to such Limited Partner had it not sold its limited partnership interest in the Partnership, including any amounts that would have been distributed to such Limited Partner upon the liquidation of the Partnership. Any amount remaining upon the liquidation of the Partnership and payment of such income and capital to such Limited Partners shall be extinguished. 9.8 Non-Utility Status . If at any time after the closing described in Section 2.2 of the Project Participation Agreement (the "Closing") and during the term of the Partner ship (a) any Class B Limited Partner shall for any reason be deemed to be an "electric utility" or an "electric utility holding company" as such terms are used in the Public Utility Regulatory Policies Act of 1978 and the Regulations thereunder (18 CFR Part 292), or a similar entity (including without limitation a "public utility" as such term is defined in the Federal Power Act, or a "holding company," a "subsidiary company," an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company" as such terms are defined in the Public Utility Holding Company Act of 1935) subject to regulation under the Federal Power Act, the Public Utility Holding Company Act of 1935, as amended, the California Public Utility Law or any other comparable Federal, state or local law or regulation (any such event, a "Deemed Utility Status"), and (b) such Class B Limited Partner shall acquire, directly or indirectly, additional Interests in the Partnership and/or such Class B Limited Partner shall have first acquired such Deemed Utility Status' after the Closing, such Class B Limited Partner shall immediately (i) give notice thereof to the Man aging General Partner and each other Class B Limited Partner, and (ii) cause all Interests in the Partnership owned by such Class B Limited Partner to be transferred in accordance with the terms of Paragraph 9.2 hereof, whether at their fair market value or otherwise, to a transferee that (A) does not have Deemed Utility Status and would not acquire Deemed Utility Status as a result of such transfer, and (B) agrees to comply with the provisions of Paragraph 9.3 hereof; provided, however, that no such Class B Limited Partner shall be required to cause the transfer of such Interests, or to cause the transfer of a greater percentage of Interests than would enable delivery of the opinion described immediately hereafter, if such Class B Limited Partner shall have provided an opinion of counsel, satisfactory to the Managing General Partner and each other Class B Limited Partner and addressed to the Partnership and to each of them, to the effect that such additional Interests or such Deemed Utility Status (1) will not cause the General Partners or any other Class B Limited Partner or the Partnership to have Deemed Utility Status, and/or (2) will not cause the status of the Facility as a "qualifying small power production facility" under the public Utility Regulatory Policies Act of 1978 and the Regulations thereunder to be adversely affected. ARTICLE X. WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER; ELECTION OF A GENERAL PARTNER 10.1 Resignation of, Withdrawal of, or Assignment by a General Partner The General Partners shall not have the right to withdraw their interests in or resign from the Partnership. The General Partners may not sell, transfer, assign, or subject to a security interest all or any part of their Interests to any person, or admit any person as substitute General Partners. However any General Partner may substitute any other person or entity as a substitute General Partner provided, that such substitution is consented to in writing by all other General Partners and approved by the vote or written consent of Two-Thirds of the Limited Partners. 10.2 Removal of a General Partner A General Partner shall be removed as a General Partner of the Partnership effective as of the date specified in Paragraph 10.3 upon the vote or written consent of a Majority of the Limited Partners to remove such General Partner, if such General Partner is in default pursuant to the terms of this Agreement, and has not cured such default within thirty (30) days after written notice thereof from the Partners, or without cause, upon the vote or written consent of a Majority of the Limited Partners who are not Affiliates of any General Partner to remove; provided, however, such removal shall not eliminate any then existing obligations of the Partnership to such General Partner or the General Partner to the Limited Partners. 10.3 Notice of Removal Written notice of the removal of a General Partner shall be given by the Partners voting to remove such General Partner pursuant to Paragraph 10.2 hereof, to such General Partner and to all other Partners. Such notice shall set forth the day upon which the removal is to become effective, which date shall not be less than thirty (30) days after such notice is given to the last party required to be notified. 10.4 Termination of a General Partner A General Partner shall cease to be a General Partner of the Partnership upon the happening of any of the following events: (a) The General Partner is removed as a General Partner as provided in Paragraph 10.2. (b) An -order for relief against the General Partner is entered under Chapter 7 of the federal bankruptcy law, or the General Partner: (i) makes a general assignment for the benefit of creditors, (ii) files a voluntary petition under the federal bankruptcy law, (iii) files a petition or answer seeking for that General Partner any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law, or regulation, (iv) files an answer or other pleading admitting or failing to contest material allegations of a petition filed against that General Partner in any proceeding of this nature or (v) seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of the General Partner or of all or any substantial part of that General Partner's properties. (c) Sixty (60) days after the commencement of any proceeding against the General Partner seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or within sixty (60) days after the appointment without that General Partner's consent or acquiescence of a trustee, receiver, or liquidator of the General Partner or all or any substantial part of that General Partner's properties, the appointment is not vacated or stayed, or within 60 days after the expiration of any such stay, the appointment is not vacated. (d) In the case of an Individual General Partner, either of the following: (i) the death of that Individual General Partner, or (ii) the entering by a court of competent jurisdiction of an order adjudicating that Individual General Partner incompetent to manage his or her person or estate. (e) In the case of a Corporate General Partner, the filing of a certificate of dissolution, or its equivalent, for the Corporate General Partner. (f) Any other event specified in the Act. 10.5 Liability of General Partner after Termination Upon a General Partner's ceasing to be a General Partner in accordance with the provisions of the Agreement, all future liability of the applicable General Partner as a General Partner shall cease as provided in the Act and the Partnership shall promptly take all steps reasonably necessary under the Act to cause such cessation of liability. The remaining General Partners shall amend the Certificate of Limited Partnership to reflect that the former General Partner is no longer a General Partner of the Partnership. 10.6 Compensation of General Partner Upon Termination Upon a General Partner ceasing to be a General Partner in accordance with the provisions of this Agreement, such General Partner's Interest in the Partnership shall be converted from a general partnership Interest to a limited partnership Interest and such person shall be forthwith admitted as a Special Limited partner of the Partnership with the same interest in profits and losses as it had as a General Partner but with no right to vote on any matter. 10.7 Election of Substitute General Partner Upon the last General Partner ceasing to be a General Partner in accordance with the Agreement or within thirty (30) days thereafter, if, pursuant to Paragraph 11.2 of the Agreement, the Limited Partners elect to continue the business of the Partnership, substitute General Partners may be elected by the unanimous vote or written consent of the Limited Partners. 10.8 Election of Additional General Partners Unless the last General Partner shall have ceased to be a General Partner in accordance with this Agreement, upon the vote or written consent of at least a Majority of the Limited Partners, any person or entity may be elected a General Partner. Upon such election, said additional General Partner shall have all the rights, powers and duties of a General Partner under this Agreement. 10.9 [intentionally omitted] 10.10 Change in Managing General Partners. A Majority of the Limited Partners may by vote or written consent, with or without cause, change the Managing General Partner and designate any other General Partner (who consents to serve) as the Managing General Partner. Any such change shall be effective immediately upon notice of such vote or consent being delivered to the removed Managing General Partner. ARTICLE XI. DISSOLUTION AND WINDING-UP OF THE PARTNERSHIP 11.1 Dissolution of the Partnership The Partnership shall be dissolved upon the first of any of the following events to occur: (a) The last General Partner ceases to be a General Partner in accordance with the provisions of this Agreement unless the Partners agree in writing to continue the business of the Partnership as provided in Paragraph 11.2 and to admit one or more General Partners as provided in Paragraph 10.7. A General Partner ceasing to be a General Partner shall not dissolve the Partnership if there is a remaining General Partner or a substitute General Partner who elects to continue the business of the Partnership. Such General Partner is hereby authorized to continue the business of the Partnership. (b) The vote or written consent to dissolve by all General Partners and Two Thirds of the Limited Partners. (c) The expiration of the term of the Partnership. (d) The sale, transfer or other irrevocable disposition of all or substantially all of the property of the Partnership. (e) Otherwise by operation of law. 11.2 Election upon Dissolution Upon a dissolution of the Partnership pursuant to Paragraph 11.l (a), any one or more of the Limited Partners shall, promptly after such dissolution, give notification thereof to the other Limited Partners and shall call for a vote of the Limited Partners to continue the business of the Partnership or to wind-up the Partnership pursuant to Paragraph 11.3 of this Agreement. The former General Partner shall be deemed to have elected and hereby agrees to continue the business or the Partnership, and if all Limited Partners elect affirmatively to continue the business of the Partner-ship a substitute General Partner shall be elected pursuant to Paragraph 10.7 of this Agreement and all of the Limited Partners shall execute a unanimous written consent or other written agreement to evidence their election to continue the business of the Partnership. 11.3 Winding-Up of the Partnership\ Upon the election of the Partners to wind-up the Partnership, or the failure of the Limited Partners to elect to continue the business of the Partnership and to evidence such election in writing or to elect a substitute General Partner pursuant to Paragraph 11.2, or upon a dissolution of the Partnership pursuant to Paragraph 11.l(b), 11.l(c), 11.l(d), or 11.l(e), the General Partners (or if there is not a General Partner, a substituted General Partner or liquidator elected by a Majority of the Limited Partners) shall take full account of the Partnership's assets and liabilities and the assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, after the allocations prescribed in Paragraph 7.2 have been made for the year of dissolution, shall be applied and distributed in the following order of priority: (a) To the payment of the debts and liabilities of the Partnership and the expenses of liquidation in the following order: (i) those owing to creditors other than Partners, and (ii) those owing to Partners. (b) To the setting up of any reserves which the General Partner or liquidator may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership (provided that if and when such contingencies shall cease to exist, any remaining assets in such reserves shall be distributed as provided herein). (c) To partners and former partners in satisfaction of liabilities for distributions under sections 15661, 15664 and 15665 of the act. (d) To Partners in accordance with their respective positive capital account balances, and former Partners to the extent of amounts due pursuant to Paragraph 9.7 of the Agreement. (e) To Partners in accordance with their respective Interests. ARTICLE XII. BOOKS OF ACCOUNT, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING AND TAX ELECTION 12.1 Books of Account The Managing General Partner shall keep, or cause to be kept, adequate books and records, setting forth a true and accurate account of all business transactions arising out of or in connection with the conduct of the Partnership's business, at the Partnership's principal executive office. The Limited Partners and their designated representatives shall be permitted to inspect and copy all books and records during normal business hours. Without limiting the generality of the foregoing provisions, the Partnership shall keep at its principal office all of the following: (a) A current list and the full name and last known business or residence address of each Partner set forth in alphabetical order together with the contribution and the share and profits and loss of each Partner. (b) A copy of the Certificate of Limited Partnership and all Certificates of Amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed. (c) Copies of the Partnership's Federal, state, and local income tax or information returns and reports, if any, of the six most recent taxable years and all relevant records for as long as necessary to satisfy applicable law. (d) Copies of the original partnership agreement and all amendments thereto. (e) Financial statements of the Partnership for the six most recent fiscal years. (f) The Partnership's books and records for at least the current and past three fiscal years. Upon the request of a Limited Partner, the General Partners shall promptly deliver to the Limited Partner, at the expense of the Partnership, a copy of the information required to be maintained by clauses (a), (b), or (d) immediately above. 12.2 Fiscal Year The fiscal year of the Partnership shall be the calendar year. 12.3 Accounting and Reports As soon as reasonably practicable after the end of each fiscal year, but not later than seventy five (75) days after such end, each Partner shall be furnished with a copy of the balance sheet of the Partnership as of the last day of such fiscal year, an income statement for such fiscal year, and a statement showing the amounts allocated to or allocated against such Partner's Capital Account pursuant to the Agreement during or in respect of the year, and all items of income, gain, deduction, credit, or loss allocated for purposes of the Code as amended from time to time, and any applicable state or local income tax laws pursuant to the Agreement. Such balance sheet and statement of income shall be prepared on the accrual method of accounting. The Managing General Partner shall notify each Limited Partner, promptly upon obtaining knowledge thereof, of any default under the Operative Documents which, in its judgment, is likely to have a material adverse effect on the Project. 12.4 Capital Accounts (a) A capital account shall be maintained for each Partner in accordance with Treasury Regulations Section 1.704-1(b), or any successor provision as follows: (i) each Partner's Capital Account shall be credited with the amount of any Capital Contribution made by the Partner, (ii) each Partner's Capital Account shall be credited with the fair market value of any property contributed by the Partner to the Partnership (net of liabilities secured by such contributed property that the partnership is considered to assume or take subject to under Section 752 of the Code, as amended from time to time), (iii) each Partner's Capital Account shall be credited with allocations to the Partner of Net Profits; (iv) each Partner's Capital Account shall be debited with the amount of cash distributed to the Partner; (v) each Partner's Capital Account shall be debited with the fair market value of any property distributed to the Partner by the Partnership (net of liabilities secured by such property that such Partner is considered to assume or take subject to under Sectirn'752 of the Code, as amended from time to time); and (vi) each Partner's Capital Account shall be debited with allocations to the Partner of Net Loss. (b) Upon a distribution in kind of Partnership property, the capital account of each Partner will be debited or credited under Article VII with such Partner's allocable share of the gain or loss which would have been recognized by the Partnership had the property been sold for an amount equal to its fair market value immediately prior to such distribution. (c) In the event any Interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the capital account of the transferor to the extent it relates to the transferred Interest. (d) The Capital Account of each Partner shall be reduced by an amount equal to the percentage of the "energy percentage" and the "regular percentage" of any United States federal investment tax credit in respect of the Project allocated to such Partner (or any predecessor in interest) by which the Partnership is required to reduce its basis in the property eligible for depreciation for federal income tax purposes on account of such credits. (e) The Capital Account of each Limited Partner, to the extent attributable to Class A Units held by such Partner, and of each General Partner, shall be reduced by 67.225 percent of any California solar energy tax credit in respect of the Project allocated to such Partner (or its predecessor in interest) except that if the amount of the reduction pursuant to subparagraph (d) shall be based on a percentage of United States federal investment tax credit that is greater than 50 percent for the "energy percentage" of the United States federal investment tax credit, the amount of the reduction hereunder shall be an amount equal to such percentage of the California solar energy tax credit as may be deemed necessary to ensure that the aggregate Capital Accounts of the Holders of Class A Units will equal one percent (1%) of the aggregate Capital Accounts of the holders of Class B Units (disregarding any portion of such Capital Accounts referable to the ownership of Class A Units) after the adjustment required by clause (d) above and disregarding any other item of income, gain, loss or deduction that may have been credited to the Capital Account of any Partner. (f) The Capital Account of each Partner shall be increased by an amount equal to any increase in the tax basis of the Project attributable to a recapture of any United States federal investment tax credit in the same proportion as such investment tax credit recapture is allocated to such Partner. 12.5 Banking and Investment Funds All funds of the Partnership shall be deposited with the Disbursement Trustee in accordance with the terms of the Disbursement Agreement, or shall be deposited in a separate bank account or accounts in a bank having a net worth and capital surplus in excess of $500,000,000 or invested in U.S. government obligations having maturities of no more than one year, or certificates of deposit rated A-1 or P-l by a national rating agency. 12.6 Tax Election Upon the transfer of a Class B Unit in the Partnership or distribution of the Partnership's assets to a Class B Limited Partner, the Tax Matters Partner may cause the Partnership to elect pursuant to Section 754 of the Code, to adjust the basis of the Partnership's property as allowed by Section 734(b) and Section 743(b) thereof, upon the consent of Two-Thirds of the Limited Partners. 12.7 Partnership Returns The General Partners shall, for each fiscal year required, file with the U. S. Internal Revenue Service on behalf of the Partnership, a U. S. Partnership Information Return within the time prescribed by law (including extensions) for such filing. The General Partners shall also file on behalf of the Partnership such state, local, or foreign income tax returns as may be required by applicable law. Within 60 days after the end of each fiscal year of-the Partnership, the General Partners shall send to each of the Partners such information as is necessary to complete federal, state and local income tax or information returns, including Schedules K-1 (or their equivalent successor tax reports) and copies of the Partnership's Federal, state and local income tax or information returns for the year. 12.8 Tax Matters Partner The Managing General Partner is hereby designated as the "Tax Matters Partner" of the Partnership as said term is defined in Section 6231(a)(7) of the Code and any comparable provision of State or local law and in such capacity and pursuant to applicable law, agrees as follows: (i) to timely file all necessary federal, state and local partnership returns for the Partnership and to furnish the Limited Partners with schedules consistent with the treatment of all items on those returns; (ii) to keep the Limited Partners fully and timely informed of all administrative and judicial proceedings for the adjustment of Partnership items (as defined in Section 6231(a)(3) of the Code and any comparable provision of state or local law) at the Partnership level and shall, without limitation, forward to each Limited Partner any .agent's reports and notices of conferences and all other correspondence pertaining to the progress of any audit being conducted by any federal, state or local taxing authority; (iii) to notify all Limited Partners of any intention to file any petition for a redetermination of Partnership items within 5 business days from the date of receipt of the statutory notice of deficiency; and (iv) not to extend the statute of limitations for assessment of tax deficiencies against any Partner with respect to adjustments to the Partnership's federal, state or local tax returns without the consent of a Majority of the Limited Partners. Any Partner who enters into a settlement agreement with any taxing authority with respect to any Partnership items shall notify the Tax Matters Partners of the agreement and its terms within 60 days from its date, and the Tax Matters Partner shall notify the other Partners of the settlement within 30 days of receipt of notification by the Partner entering into the settlement. In addition to the foregoing, actions by the Tax Matters Partner shall be subject to the restriction that the Tax Matters Partner, on its own or at the request of a Limited Partner, may file a request for administrative adjustment on behalf of the Partnership unless (after due and timely notice in writing and opportunity to object) a Majority in. Interests of Limited Partners having an interest in the outcome (as defined in Section 6226(d) of the Code) instruct the Tax Matters Partner not to file such a request. 12.9 Financial Statements and Reports The General Partners shall deliver audited financial statements to the Partners annually accompanied by a report of independent accountants of recognized national standing. Such statements shall include an income statement, balance sheet and statement of changes in financial condition. Such annual report shall discuss the activities of the Partnership for the year and provide a General Partner's discussion of the results of operations and other operating and financial data for the year. Such statements and report shall be delivered no later than ninety (90) days after the end of each calendar year. In addition, similar unaudited quarterly statements and quarterly reports shall be prepared and delivered within forty-five days after the end of each calendar quarter. 12.10 Partnership Level Administrative and Judicial Proceedings (a) In the event of any Partnership level proceeding instituted by the Internal Revenue Service pursuant to Sections 6221 through 6233 of the Code, or any comparable provision of state or local law if any Participant has a material interest in the outcome, the Tax Matters Partner shall upon written request of Two-Thirds of the Limited Partners relinquish control of the nature and content of all action and defense to be taken by the Partnership in response to such proceeding to the Participants (as defined in the Tax Indemnity Agreement), pursuant in the case of federal income taxes to and in accordance with Section 9 of the Tax Indemnity Agreement. The Tax Matters Partner hereby further agrees on written request of Two-Thirds of the Limited Partners to relinquish all control of the nature and content of all proceedings pursuant to Sections 6221 through 6233 of the Code or any comparable provision of state or local law if any Participant has a material interest in the outcome, instituted by or on behalf of the Partnership, including the decision to institute such proceedings, whether administrative or judicial, and whether in response to a previous proceeding against the Partnership or otherwise, to such Participants; or (b) Upon the election of Two-Thirds of the Limited Partners, such Person as shall be designated by such Partners shall be admitted to the Partnership as a General Partner and shall upon admission to the Partnership be substituted as the Tax Matters Partner of the Partnership. Such substitute Tax Matters Partner shall not be bound by the provisions of paragraph (a) above. 12.11 Partnership Information Meetings and Reports. (a) Until the later of (i) December 31, 1989 or (ii) such time as the Plant has met 95% of its annual projected output; the Managing General Partner shall once each calendar quarter, with the first such meeting to be held during the first calendar quarter of 1988, call a meeting of the Limited Partners to discuss and report on Plant operations. Thereafter the Managing General Partners shall call such a meeting at least once each calendar year. (b) So long as the Managing General Partner is obligated to call a quarterly meeting pursuant to Paragraph 12.11 (a) it shall, on a monthly basis, commencing with the month of January 1988, send a report to each holder of a Class B Unit setting forth the amount of electricity produced for said month. Such monthly reports shall be delivered no more than thirty days after the end of the previous month. At such time as quarterly meetings are no longer required, such information shall be delivered on an annual basis and shall be sent no later than forty-five (45) days after the end of the calendar year. (c) At least sixty (60) days prior to the beginning of each Partnership fiscal year commencing after 1987, the Managing General Partner shall send each Limited Partner the proposed budget for the Partnership's next fiscal year, which budget shall, among other things, describe the amount and type of insurance coverage provided for therein and the cost thereof. ARTICLE XIII. POWER OF ATTORNEY 13.1 Power of Attorney Each Partner holding Interests at the time of admission to the Partnership which includes less than 40 Class B Units hereby makes, constitutes, and appoints each of the General Partners, acting alone, and any successor or additional General Partners, with full power of substitution and resubstitution, their true and lawful attorney for them in their name, place and stead and for their use and benefit, to sign, execute, certify, acknowledge, swear to, file and record this Agreement, and to sign, execute, certify, acknowledge, file and record all instruments amending this Agreement, as now or hereafter amended, that may be appropriate and such agreements or other instruments or documents (i) to reflect the exercise by the General Partners of any of the powers granted to them under the Agreement; (ii) to reflect any amendments made to the Agreement by the Partners pursuant to the Agreement; (iii) to reflect the admission to the Partnership of any General Partner, Limited Partner, substituted Limited Partner or General Partner, or the withdrawal of any Partner in the manner prescribed in the Agreement; and (iv) which may be required of the Partnership or of the Partners by the laws of the State of California, or any other jurisdiction. Each such Partner authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary or advisable in connection with any of the foregoing, hereby giving such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in and about the foregoing as fully as such Partner might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact shall lawfully do or cause to be done by virtue thereof. 13.2 Duration of Power The power of attorney granted pursuant to Paragraph 13.1 of this Agreement: (a) Is a special power of attorney coupled with an interest and is irrevocable, and shall survive the death, dissolution, incompetency, bankruptcy or legal incapacity of the applicable Limited Partner; (b) May be exercised by the attorney-in-fact by listing all of the Partners who have granted a power of attorney pursuant to Paragraph 13.1 and who are executing any agreement, certificate, instrument or document with the single signature of such attorney-in-fact acting as attorney-in-fact for all Partners; and (c) Shall survive the delivery of an assignment by a Partner of any or all interests in the Partnership, except that where the purchaser, transferee, or assignee thereof has the right to be, or with the consent of the General Partners is admitted as, a Limited Partner, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling each such attorney-in-fact to execute, acknowledge, swear to, and file any such agreement, certificate, instrument, or document necessary to effect such substitution. Any assignee or successor of a Partner who has granted a power of attorney under Paragraph 13.1 does hereby make, constitute, and appoint the General Partners, and any successor or additional General Partners, his attorney-in-fact in the same manner and force and for the same purposes, as the assignor or person succeeded. ARTICLE XIV. LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS 14.1 Exoneration Except in case of: (i) bad faith; or (ii) willful misconduct; or (iii) in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances; the doing of any act or the failure to do any act by the General Partners in their capacities as such, the effect of which may cause or result in loss or damage to the Partnership, if done pursuant to the advice of legal counsel employed by the General Partners on behalf of the Partnership, or if done in good faith to promote the best interests of the Partnership, shall not subject the General Partners to any liability to the Partners or the Partnership. The foregoing shall not affect or diminish any rights that the Partnership may have against a General Partner by reason of contracts entered into with such General Partner for the performance of services as contemplated in Paragraph 8.1. The General Partners shall diligently enforce the provisions of all such contracts on behalf of the Partnership. 14.2 Indemnification The Partnership shall defend, indemnify and hold harmless the General Partners including all officers, directors, employees, or agents of the General Partners and each Partnership, employee or agent against all claims, actions, demands, losses, liabilities, costs, expenses (including all attorneys' fees), damages and threat of loss as a result of any claim or legal proceeding relating to the performance or non-performance of any act concerning the activities of the Partnership (other than acts and omissions arising from or in connection with any contract with the Partnership pursuant to which such General Partner acts as agent for the owners of the Plant or performs management, operation, maintenance or other services at the Plant and other than any loss, claim or damage arising out of or based upon any violation of any state or federal securities law, or any rule or regulation promulgated thereunder); provided, however, the person or party against whom a claim is made or legal proceeding is directed must not have been culpable of gross negligence, bad faith or willful misconduct, or, in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances. The Partnership shall advance any and all reasonable expenses incurred by a General Partner, agent or employee as described above in defending any proceeding prior to the final disposition of such proceeding; provided, however, that any such General Partner, agent or employee, prior to receiving any advancement hereunder shall execute and deliver to the Partnership an undertaking to repay any and all amounts advanced unless it shall be determined ultimately that such person is entitled to be indemnified as authorized above. 14.3 Liability Notwithstanding anything in this Agreement to the contrary, except for liability described in Paragraph. 14.2, the General Partners shall not be personally liable for the return of the Capital Contribution of any Partner, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets. Nothing herein shall affect any liability of any General Partner under any Operative Document other than this Agreement. ARTICLE XV. MISCELLANEOUS 15.1 Notices Except as required by Paragraph 15.5, any notice, payment, demand, offer or communication required or permitted to be given by any provision of the Agreement shall be sufficient if delivered in accordance with the Notice Provisions attached as Schedule X-1 to the Project Participation Agreement. 15.2 Captions Paragraph and other captions contained in the Agreement are for reference purposes only and do not interpret, define or limit the scope, extent or intent of this Agreement, or any provision hereof. 15.3 Severability Every provision of this Agreement is severable. If any term or provision hereof is held to be illegal or invalid for any reason by any duly constituted court, agency, or tribunal, such illegality or invalidity shall not affect the validity of the remainder of the Agreement. 15.4 Amendments Amendments to this Agreement may be proposed by the General Partners or by the Limited Partners having an aggregate Interest of ten percent (10%) or more, and the General Partners shall transmit to the Limited Partners a verbatim statement of any proposed amendment and may include with any such submission their recommendations as to the proposed amendment. The General Partners shall seek the written vote of the Limited Partners on the proposed amendment or shall call a meeting of the Limited Partners to vote thereon. A proposed amendment shall be adopted and become effective as an amendment hereto if it receives the affirmative vote of Two-Thirds of the Limited Partners. 15.5 Meetings and Means of Voting A meeting of the Partners for any matters on which the Limited Partners may vote may be called by any of the General Partners or by Limited Partners holding more than 10% of the Interests held by all Limited Partners. Whenever the Partners are required or permitted to take any action at a meeting, a written notice of the meeting shall be given not less than 10, nor more than 60, days before the date of the meeting to each Partner entitled to vote at the meeting. The notice shall state the place, date, and hour of the meeting and the general nature of the business to be transacted, and no other business may be transacted. Meetings of Partners may be held at any place within or without the State of California as may be specified in the notice of Meeting. If no place is stated in such notice, the meeting shall be held at the principal executive office of the Partnership. Notice of the meeting shall be given, and voting at the meeting shall be conducted, as provided in Section 15637 of the Act or any successor provision thereto. 15.6 Right to Rely Upon the Authority of the General Partners No person dealing with the General Partners shall be required to determine the General Partners' authority to make any commitment or undertaking on behalf of the Partnership, nor to determine any fact or circumstance bearing upon the existence of their authority. In addition, no purchaser of any asset owned by the Partnership shall be required to determine the sole and exclusive authority of the General Partners to sign and deliver on behalf of the partnership any such instrument of transfer, or to ensure the proper application or distribution of revenues or proceeds paid or credited in connection therewith, unless such purchasers shall have received written notice from the Partnership affecting the same. 15.7 Litigation The General Partners shall prosecute and defend such actions at law or in equity as may be necessary to enforce or protect the interests of the Partnership. The Partnership and the General Partners shall respond to any final decree, judgment, or decision of a court of competent jurisdiction in the matter. The Partnership shall satisfy any such judgment, decree, or decision first out of any insurance proceeds available therefore, and then out of the capital and assets of the Partnership. 15.8 Governing Law The local, internal laws of California shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of The parties, except as to the partnership interests of any FSLIC-insured, federal associations that may become Limited Partners under this Agreement as to which applicable federal law and regulations shall be controlling to the extent that such federal law and regulations conflict with the local, internal laws of California. 15.9 Waiver of Action for Partition Each of the parties hereto irrevocably waives, during the term of this Partnership and during the period of its liquidation following any dissolution, any right that such party might have to maintain any action for partition with respect to any of the assets of the Partnership. 15.10 Counterparts This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had executed the same counterpart. All counterparts shall be construed together and shall constitute one agreement. 15.11 Parties in Interest Each and every covenant, term, provision and agreement herein contained shall be binding upon and inure to the benefit of the permitted successors and assigns of the respective parties hereto. 15.12 Integrated Agreement This Agreement supersedes all prior agreements, understandings, restrictions, representations or warranties among the General Partners and the Limited Partners with respect to the subject matter hereof. 15.13 Right to Rely Upon Authority of Person Signing Agreement In the event that a Limited Partner is a trust (with or without disclosed beneficiaries), partnership, limited partnership, joint venture, corporation, or any entity other than a natural person, the Partnership and the General Partners shall (i) not be required to determine the authority of the person signing the Agreement or any amendment thereto to make any commitment or undertaking on behalf of such entity, nor to determine any fact or circumstance bearing upon the existence of his authority; (ii) not be required to see to the application or distribution of revenues or proceeds paid or credited to the person signing the Agreement or any amendment hereto on behalf of such entity; (iii) be entitled to rely upon the authority of the person signing this Agreement or any amendment hereto with respect to the voting of the Interest of such entity and with respect to the giving of consent on behalf of such entity in connection with any matter for which consent is permissible or required hereunder; and (iv) be entitled to rely upon the authority of any general partner, joint venturer, co-trustee, successor trustee, or president, vice president, or other officer (as the case may be) of any such entity the same as though such person were the person originally executing this Agreement or any amendment hereto on behalf of such entity. 15.14 Rights of Non-Recourse Creditors No non-recourse creditor of the Partnership shall have or acquire, at any time as a result of making any loan or advance, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor limited to the particular asset which is the subject of recourse. 15.15 Number and Gender Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders and the word "person" shall include corporation, firm, partnership or other form off association. 15.16 Partner Representations Each Partner represents and warrants to the Partnership and to each of the other Partners as follows: (a) He is of full age and has full capacity to contract, and if acting in a representative capacity, is duly authorized to execute this Agreement; (b) He is subscribing for Units for his own account as beneficial owner, for investment purposes only, and not with a view to their subdivision or distribution in a manner that would violate Federal or state securities laws or require registration thereunder, provided that the disposition of his assets shall at all times be within his control. 15.17 Competition: Independent Activities The General Partners and their respective affiliates, and the Limited Partners and their respective affiliates, may individually or otherwise presently own or hereafter acquire interests in enterprises that compete with the Partnership or may themselves manufacture, design, sell or service products that compete with the Partnership, without having or incurring any obligation to offer any interest in such activities to the Partnership. Nothing contained in this Agreement shall prohibit such competition or give the Partnership or any Partner any interest in the revenues, capital, or profits of such enterprises or activities or give the Partnership any right whatsoever to participate therein or share, in any manner, in the income therefrom. IN WITNESS WHEREOF, this Amended and Restated Agreement of Limited Partnership has been executed as of this 25 ^th day of September, 1987.

	CORPORATE GENERAL PARTNER Luz Engineering Corporation By: /s/ JOHN A. KENDALL John A. Kendall Its: Senior Vice President
	INDIVIDUAL GENERAL PARTNER /s/ P. FRANCOIS Patrick Francois /s/ ARNOLD GOLDMAN Arnold Goldman *By: /s/ JOHN A. KENDALL John A. Kendall, His Attorney-in-fact
c/o Luz Engineering Corporation 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024	WITHDRAWING ORIGINAL LIMITED PARTNER /s/ JANE MARGOLIS Jane Margolis
	By Luz Engineering Corporation their Attorney-in-fact By: /s/ P. FRANCOIS Patrick Francois President
PARTNERSHIP AGREEMENT
IWG Co. 3 206 East Second Street Davenport, Iowa 52801	By: /s/ Title: Vice President
PARTNERSHIP AGREEMENT
Oregon Natural Gas Development Corporation 220 N. W. Second Avenue Portland, Oregon 97209	By: /s/ C.J. Rue Title: Secretary
PARTNERSHIP AGREEMENT
Public Service Resources Corporation c/o Public Services Electric & Gas Co. 80 Park Plaza Newark, NJ 07101	By: /s/ EILEEN A. MORAN Title: Vice President
PARTNERSHIP AGREEMENT
Potomac Capital Investment Corporation 1901 Pennsylvania Avenue, N.W. Washington, D.C. 20006	By: /s/ DAVID R. OLIVER, JR. Title: Vice President
PARTNERSHIP AGREEMENT
Federal National Mortgage Association 3900 Wisconsin Avenue N.W. Washington, D.C. 20016	By: /s/ Title: Senior Vice President and Controller
PARTNERSHIP AGREEMENT
E'town Corporation 600 South Avenue Westfield, NJ 07090	By: /s/ Title: Treasurer
PARTNERSHIP AGREEMENT
CPN Leasco 2121 N. California Blvd. Suite 400 Walnut Creek, CA 94596	By: /s/ A. L. McDANIEL A. L. McDaniel President CPN Leasco
PARTNERSHIP AGREEMENT
CD SEGS V, Inc. 250 West Pratt Street 23rd Floor Baltimore, Maryland 21201-2423 Attention: Secretary	By: /s/ D. S. PERRY Title: Assistant Secretary Assistant Treasurer
PARTNERSHIP AGREEMENT
Atari "US" Corp. 1196 Borregas Avenue Sunnyvale, CA 94086	By: /s/ Title: CFO

EXHIBIT A CAPITAL CONTRIBUTIONS, PERCENTAGE INTEREST, NUMBER OF UNITS OWNED AND NAMES OF LIMITED PARTNERS OF LUZ SOLAR PARTNERS LTD. V, A CALIFORNIA LIMITED PARTNERSHIP
	No. of Units
Name	Class A	Class B	Capital Contribution	Percentage Interest
PS Group, Inc.	120		$ 3,000	0.15230769%
Central Bank	30		750	0.03807692%
Crowley SEGS V	20		500	0.02538462%
John Winthrop & Marilyn Winthrop	10		250	0.01269231%
Columbia Savings & Loan Assoc.	320		8,000	0.40615385%
Matson Navigation Company, Inc.	200		5,000	0.25384615%
Herb Albert	20		500	0.02538462%
Jerome Moss	20		500	0.02538462%
CD SEGS V, Inc.		104	2,600	4.16382353%
CPN Leasco		240	6,000	9.60882353%
IWG Co. 3		200	5,000	8.00735294%
Oregon Natural Gas Development Corp.		120	3,000	4.80441176%
Potomac Capital Investment Corporation		480	12,000	19.21764706%
Public Services Resources Corporation		200	5,000	8.00735294%
E'town Corporation		80	2,000	3.20294118%
Atari "US" Corp.	40	40	2,000	1.65223982%
Federal National Mortgage Association		984	24,600	39.39617646%
	780	2,448	$80,700	99.00000000%

SEGS V FIRST AMENDMENT TO FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
INSTRUCTIONS:	Limited Partners Who Wish To Approve The Proposal Should Sign The Attached Amendment On Page Three Under "Limited Partners" And Return The Executed Document To James F. Verhey Or Andrew Shaddock Of Luz Development And Finance.

SEGS V
FIRST AMENDMENT TO FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP This FIRST AMENDMENT TO FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this "Amendment") is made and entered into as of the____ day of _____, 1988 among Luz Engineering Corporation, a California corporation, Patrick Francois, Arnold Goldman (collectively, the "General Partners") and the limited partners listed on Exhibit A hereto (the "Limited Partners). PREMISES A The General Partners and the Limited Partners (together with certain other limited partners not parties hereto) have formed Luz Solar Partners Ltd., V, a California limited partnership ("LSP V") pursuant to that certain First Amended and Restated Agreement of Limited Partnership of Luz Solar Partners Ltd., V, a California limited partnership, dated as of September 2S, 1937 (the "Agreement"). B. The Limited Partners own units of limited partnership interest in LSP V accounting in the aggregate for more than two-thirds of the interests of the limited partners in the profits and losses of LSP V. C. The General Partners and the Limited Partners desire to amend the Agreement as set forth herein. NOW THEREFORE, the parties agree as follows: 1. Amendment . Pursuant to Section 15.4 of the Agreement and Section 15637(h)of the California Revised 'Limited Partnership Act, the General Partners and the Limited Partners hereby consent and agree to the amendment of subsection 8.3(a)(viii) of the Agreement by the addition of the following proviso at the end of such subsection:
	"; provided, however, that the General Partners are hereby permitted to enter into, execute, or consent to, as the case may be, an amendment to the Ground Lease, as amended, an amendment to the Common Facilities Co-Tenancy Agreement, as amended, among Luz Solar Partner Ltd., III, Luz Solar Partners Ltd., IV. Luz Solar Partners Ltd., V ('LSP V'), Luz Solar Partners Ltd., VI ('LSP VI') and Luz Solar Partners Ltd., VII ('LSP VII'), a Subdivision Map related thereto,. and such other documents as such General Partners shall deem necessary, all in such form as the General Partners may deem advisable in order to (a) permit the LSP VI and LSP VII partnerships to have principal use of up to 20 acres of the Common Area immediately south of the LSP V evaporation pond otherwise governed by the Common Facilities Co-Tenancy Agreement and (b) to remove a strip of land approximately 67 feet wide by 6,000 feet long along the boundary of Parcels 7 and 8 (as identified on the proposed Subdivision Map) from the Common Area under the Ground Lease and add it to such Parcels 7 and 8 for the benefit of LSP VI and LSP VII."
2. Other provisions Unaffected . Except as specifically amended hereby, the Agreement shall remain in full force and effect as originally constituted. 3. Counterparts . This Amendment may be executed in one or more counterparts which, taken together, shall constitute one instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
GENERAL PARTNERS:		LUZ ENGINEERING CORPORATION By _________________________ Its ________________________ _____________________________ Patrick Francois _____________________________ Arnold Goldman
LIMITED PARTNERS		Potomac Capital Investment Corporation By /s/ DAVID R. OLIVER, JR. Its Executive Vice President
		Public Service Resources Corporation By /s/ EILEEN A. MORAN Its Vice President
		Oregon Natural Gas Development Corporation By /s/ C. J. RUE Its Secretary
		CD Solar Power 1, Inc. Constellation Development, Inc. By /s/ BRUCE M. AMBLER Its President
		CPN LEASCO By /s/ Its
		Atari ("U.S.") Corp. By /s/ Its Treasurer
Atari ("U.S.") Corp.'s execution of this agreement is contingent upon the execution by all other Limited Partners.
		Federal National Mortgage Association By: /s/ JAMES T. PARKER Its Vice President for Financial Standards and Corporate Taxes
		E'Town Corporation By /s/ Its Secretary and Treasurer
		IWG CO. 3 By /s/ Its Vice President

AGREEMENT OF LIMITED

PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., VI,

A CALIFORNIA LIMITED PARTNERSHIP

TABLE OF CONTENTS

			Page
I.	DEFINITIONS		1
II.	ORGANIZATON		10
	2.1	Formation	10
	2.2	Certificate of Limited Partnership	10
	2.3	Name	11
	2.4	Use of Name of Limited Partners	11
	2.5	Term	11
III.	PRINCIPAL EXECUTIVE OFFICE		11
IV.	BUSINESS		12
	4.1	Purpose of Partnership	12
	4.2	Activities	13
V.	ADMISSION OF PARTNERS AND CAPITAL CONTRIBUTIONS		13
	5.1	Capital Contribution of Original Limited Partner	13
	5.2	Capital Contribution of General Partners	14
	5.3	Admission and Capital Contribution of Limited Partners	14
	5.4	Interest	16
	5.5	Limited Liability	16
	5.6	Role of Limited Partner	16
	5.7	Withdrawal of Capital Contributions	17
	5.8	Indemnification of Limited Partners	17
	5.9	Option to Redeem	18
VI.	EXPENSES AND COMPENSATION OF THE GENERAL PARTNERS		19
	6.1	General Expenses	19
	6.2	Compensation	20
	6.3	Loans	20
VII.	ALLOCATIONS OF NET PROFITS AND NET LOSS; CASH DISTRIBUTIONS		21
	7.1	General Allocations	21
	7.2	Other Allocations of Income and Credit Items	21
	7.3	Additional Allocations of Items of Expense and Loss	22
	7.4	Other Allocation Rules	23
	7.5	Distributions	24
VIII.	RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNERS		25
	8.1	Powers	25
	8.2	Duties	29
	8.3	Certain Limitations	31
	8.4	Actions with Respect To Warranty Letter Of Credit, And Cermet Letter Credit	33
IX.	CONVEYANCE OF INTERESTS IN THE PARTNERSHIP		35
	9.1	General Provisions	35
	9.2	Limited Partners	35
	9.3	Admission as Limited Partner	38
	9.4	Purchase of Interests by the General Partners	39
	9.5	Death or Dissolution of a Class A Limited Partner or Other Holder or Spouse Thereof	39
	9.6	Voluntary Withdrawal by Limited Partner	41
	9.7	Non-Utility Status	43
X.	WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER; ELECTION OF A GENERAL PARTNER		45
	10.1	Resignation of, Withdrawal of, or Assignment by a General Partner	45
	10.2	Removal of a General Partner	45
	10.3	Notice of Removal	46
	10.4	Termination of a General Partner	46
	10.5	Liability of General Partner after Termination	48
	10.6	Compensation of General Partner upon Termination	48
	10.7	Election of Substitute General Partner	49
	10.8	Election of Additional General Partners	49
	10.9	[intentionally omitted]	49
	10.10	Change in Managing General Partner	49
XI.	DISSOLUTION AND WINDING-UP OF THE PARTNERSHIP		50
	11.1	Dissolution of the Partnership	50
	11.2	Election upon Dissolution	51
	11.3	Winding-Up of the Partnership	51
XII.	BOOKS OF ACCOUNT, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING AND TAX ELECTION		53
	12.1	Books of Account	53
	12.2	Fiscal Year	54
	12.3	Accounting and Reports	54
	12.4	Capital Accounts	55
	12.5	Banking and Investment Funds	58
	12.6	Tax Election	58
	12.7	Partnership Returns	58
	12.8	Tax Matters Partner	59
	12.9	Financial Statements and Reports	61
	12.10	Partnership Level Administrative and Judicial Proceedings	61
	12.11	Partnership Information Meetings and Reports	63
XIII.	POWER OF ATTORNEY		64
	13.1	Power of Attorney	64
	13.2	Duration of Power	65
XIV.	LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS		66
	14.1	Exoneration	66
	14.2	Indemnification	67
	14.3	Liability	68
XV.	MISCELLANEOUS		69
	15.1	Notices	69
	15.2	Captions	69
	15.3	Severability	69
	15.4	Amendments	70
	15.5	Meetings and Means of Voting	70
	15.6	Right to Rely upon the Authority of the General Partners	71
	15.7	Litigation	71
	15.8	Governing Law	72
	15.9	Waiver of Action for Partition	72
	15.10	Counterparts	73
	15.11	Parties in Interest	73
	15.12	Integrated Agreement	73
	15.13	Right to Rely upon Authority of Person Signing Agreement	73
	15.14	Rights of Non-Recourse Creditors	74
	15.15	Number and Gender	74
	15.16	Partner Representations	75
	15.17	Competition: Independent Activities	75
Exhibits:
A.	Capital Contribution, Percentage Interests and Number of Units Owned		79

FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., VI a California limited partnership
PARTIES:		LUZ PARTNERSHIP MANAGEMENT, INC., a California corporation, as a Corporate General Partner, Patrick Francois, an individual, as an Individual General Partner, Arnold Goldman, an individual, as an Individual General Partner, Luz Development & Finance Corporation, a California corporation, as the Original Limited Partner, Luz Engineering Corporation, a California corporation ("LEC") as the Withdrawing General Partner, the Class A Partners and the Class B Partners listed on Exhibit A and all other persons and entities who hereafter may be admitted to the Partnership as general or limited partners.
AGREEMENT:
ARTICLE I. DEFINITIONS
1.1 For all purposes of this Agreement, unless the context otherwise requires or the term is otherwise defined herein, capitalized terms are used herein with the meanings given in Schedule Y to the Project Participation Agreement.
1.2 " Act " means the California Revised Limited Partnership Act, California Corporations Code, Chapter 3.
1.3 " Agreement " means this Agreement of Limited Partnership, as amended from time to time.
1.4 " Capital Account " shall have the meaning set forth in Paragraph 12.4 hereof.
1.5 " Capital Contribution " means, with respect to any Partner, a contribution by such Partner to the capital of the Partnership.
1.6 " Class A Unit " means a Unit entitling the owner thereof to a 0.0036397% share (computed as set forth in Paragraph 1.19) (0.99% for all Class A Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, as amended from time to time, as well as a 0.36397059 share (99% for all Class A Units) of any solar energy tax credit that the Partnership may be entitled to pursuant to the laws of the State of California and obligating the owner thereof to make a Capital Contribution of $25,000.
1.7 " Class B Unit " means a Unit entitling the owner thereof to a 0.04418846% share (computed as set forth in Paragraph 1.19) (98.01% for all Class B Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, as amended from time to time. Class B Units are not entitled to any share of any solar energy tax credit to which the. Partnership may be entitled under the laws of California. Each Class B Unit obligates the owner thereof to make a Capital Contribution of $25,000.
1.8 " Closing Date " means the date on which each Limited Partner (other than the Original Limited Partner) will deliver its Initial Capital Contribution.
1.9 " Code " means the Internal Revenue Code of 1986, as amended from time to time.
1.10 " Corporate General Partner " means Luz Partnership Management, Inc. ("LPM"), and any other corporation admitted as a general partner of the Partnership in place of or in addition to such corporation.
1.11 " Early Contribution " means any Initial Capital Contribution by a Limited Partner which has the effect of reducing the principal amount of the Non Interest-Bearing Note such Limited Partner would otherwise have delivered to the Partnership.
1.12 " Equipment Lease " means that certain lease of equipment between the Partnership, as lessor, and LEC, as lessee, which may be executed after the Closing date.
1.13 " Excess Interest " means interest earned on any Early Contribution from the date of such contribution to the earlier of the day before the date the Plant is placed in service or October 28, 1988. In determining the interest income of the Partnership during this period, the Early Contribution shall be deemed to be the last funds expended by the Partner ship.
1.14 " Floating Rate Notes " means the nonrecourse notes in an aggregate principal amount of not to exceed $50 million, secured by the Plant and certain of the Partnership's other assets, executed by the Partnership in favor of the Prudential Interfunding Corp., a Delaware corporation, as further described in Section 2.01(b) of the Indenture, which notes shall be secured by the Non-Interest Bearing Notes and the Security Documents.
1.15 " General Partners " means LPM, Patrick Francois, Arnold Goldman, and all successors or additional general partners of the Partnership approved pursuant to this Agreement. A "General Partner" shall mean any of the General Partners.
1.16 " Holders of Interests " means those persons or entities which from time to time are shown on the books and records of the Partnership as being owners of Interests, or a fraction thereof, whether or not such persons or entities have been admitted to the Partnership as Limited Partners.
1.17 " Individual General Partner " means Patrick Francois, Arnold Goldman and any other individual admitted as a general partner of the Partnership in place of or in addition to Patrick Francois or Arnold Goldman.
1.18 " Initial Capital Contribution " means with respect to each Partner the original amount of cash contributed to the capital of the Partnership which amount together with the principal amount of any Non-Interest Bearing Note delivered by such Partner shall be no less than $25,000 per Unit for a Class A Unit and no less than $25,000 per Unit for a Class B Unit.
1.19 " Institutional Lender "" means collectively The Prudential Insurance Company of America, a New Jersey mutual insurance company, The CIT Group/Equipment Financing, Inc., a New York corporation, Principal Mutual Life Insurance Company, an Iowa mutual insurance company, Confederation Life Insurance Company, a Canadian mutual insurance company, and The Canada Life Assurance Company, a Canadian mutual insurance company and their respective successors and assigns.
1.20 " Interest " or " Partnership Interest " means a percentage interest in the profits and losses of the Partnership. The percentage interest attributable to each Class A Unit is 0.0036397% (computed as follows: 1/272 x .99%), representing in the aggregate a 0.99% Interest. The percentage interest attributable to each Class B Unit is 0.04418846% (computed as follows: 1/2218 x 98.01%), representing in the aggregate a 98.01% Interest. The aggregate Interest of the General Partners is one percent. The aggregate Interest of the General Partners shall be allocated among the General Partners on the basis of. the percentage obtained by dividing the capital contributed by each General Partner by the capital contributed by all General Partners, except that in all events the Individual General Partners shall have a Partnership Interest of one-half of one percent (divided equally between them). The Interest of a Limited Partner stated as a percentage of all Interests held by Limited Partners is the percentage obtained by adding the percentage interest in profits attributable to each Unit owned by such Partner (both Class A Units and/or Class B Units) and dividing said number by 99. The Interest of a Limited Partner stated as a percentage of all Interests held by Partners shall be the percentage obtained by adding the percentage interest attributable to each Unit owned by such Limited Partner (both Class A Units and Class B Units) together.
1.21 " Limited Partners " means the persons or entities admitted to the Partnership at any time and from time to time as Limited Partners and who have not withdrawn from the Partnership. A General Partner may also be admitted as a Limited Partner.
1.22 " Majority of the Limited Partners " means, at the time of any vote by the Limited Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate Units representing more than fifty percent (50%) of the Interest held by the Limited Partners.
1.23 " Managing General Partner " means the General Partner so designated pursuant to Paragraph 6.2, or any successor selected pursuant to Paragraph 10.10.
1.24 " Net Profits " and " Net Loss " means the Partnership's taxable income or loss for a taxable year, determined in accordance with section 703(a) of the Code, as amended from time to time (for this purpose, all items of income, gain, loss or deduction required to be separately stated pursuant to section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
	(i) Any income of the Partnership which is exempt from federal income tax shall be added to such taxable income or loss;
	(ii) Any expenditures of the Partnership described in section 705(a)(2)(B) of the Code, as amended from time to time, or treated as section 705(a)(2)(B) expenditures, pursuant to section 1.704-l(b)(2)(iv(i) of the Treasury Regulations, shall be subtracted from such taxable income or loss;
	(iii) Notwithstanding any other provision of this Paragraph 1.23, the computation of Net Profits and Net Loss shall give proper effect to Paragraphs 7.2 and 7.3 hereof.
1.25 " 1954 Code " means the Code as amended and in effect immediately before the enactment of the amendments thereto pursuant to the Tax Reform Act of 1986.
1.26 " Non-Interest Bearing Notes " means the non interest bearing notes to be given the Partnership in the principal amount of $25,000 per Unit, payable in one installment (per Unit) of $25,000, on the 28th day of October, 1988, representing a portion of a Limited Partner's Capital Contribution which the General Partner may require to be secured by a letter of credit or other security acceptable to the General Partner. Any Partner desiring to pay cash instead of issuing such a note may do so.
1.27 " Nonrecourse Notes " means those certain nonrecourse notes in the aggregate original principal amount of $53,000,000, secured by the Plant and certain of the Partnership's other assets, to be executed by the Partnership in favor of the Institutional Lender or any note(s) which may be issued in replacement thereof, which notes shall be secured by the Security Documents.
1.28 " Operative Documents " shall be defined as defined in Schedule Y to the Project Participation Agreement.
1.29 " Offering " means the sale of Units in the Partnership at the Closing Date.
1.30 " Original Limited Partner " means Luz Development & Finance Corporation, a California corporation.
1.31 " Partners " means collectively the General Partners and all Limited Partners, and reference to a Partner shall be to any one of the Partners.
1.32 " Partnership " means the limited partnership created pursuant to this Agreement and the Act.
1.33 " Plant " or " Project " or " Facility " shall be defined as defined in Schedule Y to the Project Participation Agreement.
1.34 " Project Participation Agreement " means that certain Project Participation Agreement dated as of February 29, 1988 by and among the Partnership, LPM, 'the Institutional Lender, LEC, Manufacturers Hanover Trust Company of California, as Indenture Trustee, Disbursement Trustee and Escrow Holder, the Prudential Insurance Company of America, as agent, Prudential Inter funding Corp. and the initial Class B Partners relative to the purchase by the Class B Partners of their interest in the Partnership and the issuance of the Nonrecourse Notes to the Institutional Lender or its assignee(s) and the issuance of the Floating Rate Notes to Prudential Interfunding Corp.
1.35 " Sixty Percent of the Limited Partners " means, at the time of any vote by the Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate a number of Units representing sixty percent (60%) of the Interests held by the Limited Partners.
1.36 " Subsequent Contribution " means the contributions that are to be made to the Partnership by the Limited Partners represented by the Non-Interest Bearing Notes.
1.37 " Unit " means an ownership interest in the Partnership, which is owned by a Limited Partner. Each Unit represents a commitment to make a Capital Contribution of $25,000. There are two kinds of Units, namely Class A Units and Class B Units. There are 272 Class A Units and 2218 Class B Units.
1.38 " Withdrawing General Partner " means Luz Engineering Corporation, a California corporation ("LEC").
ARTICLE II. ORGANIZATION
2.1 Formation
The parties by the execution of this Agreement and the filing of the Certificate of Limited Partnership as provided in Paragraph 2.2 do hereby form a limited partnership under and pursuant to the Act.
2.2 Certificate of Limited Partnership
The General Partners shall execute, acknowledge and file with the California Secretary of State the Certificate of Limited Partnership as required by the Act. An amendment to the Certificate of Limited Partnership may be signed, personally or by an attorney-in-fact, by:
(a) Any General Partner and the new General Partner if the amendment is caused by the admission of a new General Partner;
(b) Any General Partner if a General Partner withdraws or ceases to be a General Partner and the Partnership's business is continued; or
(c) Any General Partner under any other circumstances unless otherwise provided by the Act.
2.3 Name
The name of the Partnership shall be Luz Solar Partners Ltd., VI, a California limited partnership, and the business of the Partnership shall be conducted under that name.
2.4 Use of Name of Limited Partners
The General Partners shall not make use of the name of any Limited Partner who is not also a general partner in the conduct of the business of the Partnership. The General Partners shall not, except as may be required by law, disclose the name of any Limited Partner without the previous written consent of such Limited Partner, which consent may be withheld in its discretion.
2.5 Term
The Partnership will continue until December 31, 2030, unless sooner terminated as provided herein.
ARTICLE III. PRINCIPAL EXECUTIVE OFFICE
3.1 The principal executive office of the Partnership shall be located at 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024, or at any other place within the State of California which the General Partners may designate at any time and from time to time after first giving at least 30 days prior notice to all Limited Partners. The General Partners may establish the principal place or other places of business of the Partnership within the state of California, when the General Partners deem it advantageous to the Partnership, without liability to any Partner.
3.2 The Agent for Service of Process on the Partner ship is John Kendall, whose address is 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024. The General Partners shall cause to be filed an amendment to the Certificate of Limited Partnership reflecting any change of address of or replacement of the Agent for Service of' Process within 30 days after its occurrence.
ARTICLE IV. BUSINESS
4.1 Purpose of Partnership
The Partnership has been formed under the laws of the State of California for the purpose of entering into a contract for the construction of the Plant, leasing real and personal property in connection therewith, and owning, financing and arranging for the operation and maintenance of the Plant, which will generate electricity for sale to public utility users in accordance with the Public Utility Regulatory Policies Act of 1978 ("PURPA"), as a "qualifying small power production facility" eligible for exemption from regulation under certain federal and state laws, as well as for the purpose of purchasing the equipment which may be covered by the Equipment Lease and leasing such equipment pursuant to the Equipment Lease (and disposing of such equipment upon the expiration of the term of the Equipment Lease), after the terms of the Equipment Lease are consented to by Sixty Percent of the Limited Partners.
4.2 Activities
The Partnership's activities shall be limited to those in furtherance of the purposes specified in Paragraph 4.1, including:
(a) Entering into the agreements and transactions set forth in Paragraph 8.1 and similar agreements and transactions in substitution or replacement thereof; and
(b) Performing all acts necessary to accomplish such Purposes.
ARTICLE V ADMISSION OF PARTNERS AND CAPITAL CONTRIBUTIONS
5.1 Capital Contribution of Original Limited Partner
The Original Limited Partner has made a contribution of One Hundred Dollars ($100) in cash to the capital of the Partnership. Such capital contribution will be returned to the Original Limited Partner following the admission to the Partnership of any additional Partner pursuant to Paragraph 5.3, at which time all Partners hereby consent to the Original Limited Partner's withdrawal of its capital contribution and hereby waive and release the Original Limited Partner from any liability and from any right, claim or action that they may have against said Limited Partner for such withdrawal.
5.2 Capital Contribution of General Partners
The General Partners other than the Corporate General Partner have no fixed obligation to make capital contributions to the Partnership, but the General Partners collectively own a one percent Interest and are entitled to one percent of each item of income, gain, deduction, loss, distribution or credit (including any United States tax credit and the California solar energy credit). The Corporate General Partner shall have an obligation to make and shall be initially credited with Capital Contributions of $628,725 inclusive of any amounts required to be contributed under Section 9.9 of the Project Participation Agreement and any amounts previously contributed by LEC. The Corporate General Partner further agrees that, it will restore to the Partnership any negative balance in its Capital Account upon the earlier-of: (i) its withdrawal as a General Partner, or (ii) the liquidation of the Partnership.
5.3 Admission and Capital Contribution of Limited Partners
The General Partners may accept subscriptions, pursuant to the terms of the Offering, for up to 272 Class A Units and up to 2218 Class B Units. Capital Contributions shall be made as specified in Paragraphs 1.5 and 1.6. The Non-Interest Bearing Notes of any Limited Partner shall become immediately due and payable if any payment required to be made thereunder by such Partner is not made when due. Such notes, subsequent to their respective maturity dates, may be assigned as permitted by the Escrow and Security Agreement if, but only if, the maker of any such note is in default in payment thereunder at the time of assignment.
The Capital Contribution of each Limited Partner shall be set forth in Exhibit A to this Agreement. The Interest of a Limited Partner in the Partnership shall be the percentage determined in accordance with Paragraph 1.19 of this Agreement.
In lieu of executing and delivering a Non Interest Bearing Note, a Limited Partner may make an additional Initial Capital Contribution of $25,000 per Unit.
Any Units which the Partnership may acquire pursuant to Paragraph 5.9 may be reissued by it to existing Partners or to third parties that the Managing General Partner may admit as Limited Partners provided that: (A) such persons(i) make the same representations and warranties as were made by the purchasers of the Class B Units in the Project Participation Agreement and (ii) make a cash Capital Contribution of $25,000 per Unit; and (B) the Managing General Partner receives an opinion of counsel (which may be obtained at the expense of the Partnership) or other satisfactory evidence that the admission of such person as a Limited Partner will not (i) cause the Partnership to lose its exemption from certain federal and state public utility laws provided by PURPA; (ii) dissolve the Partnership or otherwise impair the ability of the Partnership to be treated as a Partnership under the federal income tax laws; or (iii) violate the Securities Act of 1933, as amended or any applicable state securities law.
5.4 Interest
Capital Contributions to the Partnership do not accrue interest.
5.5 Limited Liability
Except as provided in Sections 15652 and 15666 of the Act, no Limited Partner who is not also a General Partner shall be bound by, or liable for, the debts, expenses, liabilities, contracts or any other obligations of the Partnership. Limited Partners shall not be required or obligated to lend any funds to the Partnership or to make further Capital Contributions of any kind whatsoever beyond those described in this Article V.
5.6 Role of Limited Partner
No Limited Partner shall take part in the conduct or control of the business of the Partnership or have any right or authority to act for or bind the Partnership in any manner whatsoever. No vote or consent given by any Limited Partner shall ever be construed to make a Limited Partner liable as a General Partner or to cause the Limited Partners to have any liability beyond that set forth in Paragraph 5.5. No Limited Partner or any Affiliate shall make any loan to the Partnership.
5.7 Withdrawal of Capital Contributions
Except as provided in Paragraphs 5.9 and 9.6, no Limited Partner (other than the Original Limited Partner) shall have the right to withdraw or reduce its contribution to the capital of the Partnership, unless (i) all other Partners consent, (ii) all liabilities of the Partnership (except liabilities to the General Partner and to Limited Partners on account of the Capital Contributions) have been paid or there remains property of the Partnership sufficient to pay such liabilities, (iii) this Agreement is amended as to set forth the withdrawal or reduction; and (iv) such distribution does not result in an Indenture Event of Default. Limited Partners shall not have the right to demand or receive property other than cash in return for their contribution, and no Limited Partner shall have priority over any other Limited Partner, either as to the return of contributed capital or as to any profits, losses or distributions, except as set forth in Paragraph 5.1.
5.8 Indemnification of Limited Partners
The Partnership shall, solely from its assets and without recourse to any General Partner, indemnify, defend and hold harmless the Limited Partners from any loss (other than their Capital Contributions), liability, damage or expense imposed on them related to the ownership of Partnership property or conduct of the Partnership's business other than (i) the repayment of the Interest of a Limited Partner in any distribution whose return is required pursuant to Sections 15652 and 15666 of the Act; and (ii) taxes imposed on or measured by the net income of such Limited Partners.
5.9 Option to Redeem .
In the event that a Limited Partner(s) fails to make a Subsequent Contribution, such Limited Partner(s) ("Defaulting Limited Partner(s)") hereby grants the Partnership the option (the "Option") on the terms and conditions set below and further subject to Paragraphs 5.3 and 8.1(k), to redeem all or any part of its Units and to cancel all of its rights hereunder at any time after October 28, 1988, and prior to February 1, 1989. The Option is subject to the following terms and conditions:
(a) the Option does not exist unless and until the Defaulting Limited Partner has been sent written notice of its failure to pay its Non-Interest Bearing Note when due and full payment has not been made within five (5) business days of the sending of such notice;
(b) subject to the rights, if any, of Prudential Interfunding Corp., or its assignees, the Option shall be exercised by the Partnership delivering written notice of exercise to the Defaulting Limited Partner together with the return to such person of its Non-Interest Bearing Note (the "Defaulted Note") (or, if only a portion of the Units owned by such Defaulting Limited Partner is redeemed, with a further notice specifying that the principal amount of the Defaulted Note has been reduced by the product of $25,000 multiplied by the number of Units with respect to which the Option is being exercised);
(c) the Option may be exercised in one or more installments;
(d) each Limited Partner hereby appoints the General Partner its true and lawful attorney in fact to execute any documents required to be executed on its behalf to transfer all or part of its Units to the Partnership;
(e) the Partnership is under no obligation to exercise the Option, and it and/or any of its creditors who may acquire a security interest in, or ownership of the Non-Interest Bearing Notes, remains free to pursue any other legal or equitable remedies available to them prior to exercise of the Option.
ARTICLE VI. EXPENSES AND COMPENSATION OF THE GENERALL PARTNERS
6.1 General Expenses
The General Partners may charge the Partnership and be reimbursed by it for any and all reasonable, ordinary and necessary out-of-pocket expenses actually incurred by them in connection with the performance of the responsibilities of the General Partners to the Partnership and the operation of the Partnership's business but excluding indirect costs and overhead expenses.
6.2 Compensation
LPM shall be the Managing General Partner until it ceases to be a General Partner or a-new Managing General Partner is selected pursuant to Paragraph 10.10. The Managing General Partner shall not be reimbursed for the cost of any administrative and management services to the Partnership, but Partnership accounting duties may be delegated to a nationally recognized accounting firm and the fees and expenses of such accountants will be borne by the Partnership. The administrative duties and management of the Partnership may be delegated to any competent entity whether or not it is a Partner, but not to a Limited Partner.
6.3 Loans
If the General Partners loan money to the Partnership they shall be paid interest on such loans at the prime rate plus one percent (1%) quoted from time to time by the First Interstate Bank of California, or any successor, but never in excess of the maximum rate permitted by law.
ARTICLE VII. ALLOCATIONS OF NET PROFITS AND NET LOSS; CASH DISTRIBUTIONS
7.1 General Allocations
(a) Except as otherwise provided in Paragraphs 7.2 and 7.3, Net Profits and Net Loss shall be allocated among all Partners, pro rata in accordance with their respective Partnership Interests throughout the year.
(b) Profits and Losses shall be determined and specific items of income, gain, loss or credit shall in all events be allocated in the manner necessary to assure compliance with Treasury Regulations Section 1.704-1(b) or any successor provision.
7.2 Other Allocations of Income and Credit Items
(a) All items of California solar energy tax credit shall be allocated 3/4 of 1% to LPM, 1/8 of 1% to Patrick Francois, 1/8 of 1% to Arnold Goldman and 99% to the owners of Class A Units. The portion allocated to the owners of Class A Unit shall be divided pro rata in accordance with the number of such Units owned by each on the date the property giving rise to such credit was placed in service.
(b) To the extent the Partnership has interest income with respect to any borrowing from the Partnership by any Partner, whether stated or pursuant to Section 483 or 1271 through 1288 of the Code, such interest income shall be allocated to the Partner to whom such borrowing relates, and such interest shall not constitute a Capital Contribution.
(c) All items of federal investment and energy tax credit shall be allocated among all Partners in accordance with their Interests as of the date the property giving rise to the credit is placed in service.
(d) If the adjusted tax basis of any property that has been placed in service by the Partnership is increased pursuant to Section 48(q) of the Code, such increase shall be allocated among the Partners in the same proportions as the investment tax credit that is recaptured with respect to such property is shared among the Partners.
(e) Excess Interest shall be allocated among those Partners who made Early Contributions in proportion to their contributions. Early Contributions shall be treated as if they were loans by the Partners in question to the Partnership that are forgiven on October 28 1988 in fulfillment of their obligation to make a total capital contribution of $25,000 per Unit.
7.3 Additional Allocations of Items of Expense and Loss
(a) Federal income tax deductions for depreciation allowed under Section 168 of the Code (or the 1954 Code, as appropriate) ("depreciation deductions") shall be allocated among the Partners in accordance with their Interests from and after the date that the property giving rise to such deductions is placed in service, unless regulations are promulgated by the Internal Revenue Service that require that depreciation deductions be applied ratably throughout the taxable year, in which case such deductions shall be specially allocated entirely to new or transferee Partners as of the date of their admission until the cumulative allocations to all Partners equal those that would have been made had such regulations not been promulgated, if permitted under Section 704(b) of the Code and the Treasury Regulations promulgated pursuant thereto.
(b) Any reduction in the adjusted tax basis of Partnership property pursuant to Section 48(q) of the Code shall be allocated among the Partners pro rata in accordance with their Interests in the same proportion as the basis of the Property is allocated under Treasury Regulations Section 1.46-3(f)(2)(i).
7.4 Other Allocation Rules
(a) Net Profit and Net Loss shall be computed according to the accrual method of accounting for federal income tax purposes and otherwise in accordance with generally accepted accounting principles applied in a consistent manner.
(b) The Partnership shall use the interim closing of the books method of accounting upon the admission of a new or transferee Partner or the increase, decrease or termination of a Partner's Interest.
(c) Except as otherwise provided in this Agreement, whenever a proportionate part of the Partnership Net Profit or Net Loss is credited or charged to a Partner's capital account, every item of income, gain, loss or deduction entering into the computation of such Net Profit and Net Loss shall be considered credited or charged, as the case may be, and every item of credit or tax preference applicable to the period during which such profit or loss was realized shall be allocated but not credited or charged, to such account in the same proportion.
7.5 Distributions
(a) The Partnership may, subject to the provisions of Section 5.19 of the Participation Agreement, from time to time, in the sole discretion of the General Partners, distribute cash disbursed to it under the Disbursement Agreement or received as Excluded Payments to the Partners in proportion to their Partnership Interests. In addition, no later than February 15, 1989, the General Partners shall distribute the Excess Interest to those Partners entitled thereto due to their making an Early Contribution.
(b) Distributions of Partnership assets in respect of Interests shall be made only to the Persons who, according to the books and records of the Partnership, are the record Holders of Interests on the date determined by the General Partners as of which Holders of Interests are entitled to any distribution. The General Partners and the Partnership shall bear no liability for making distributions in'accordance with the provisions of the preceding sentence.
(c) All amounts withheld pursuant to the code, as amended from time to time, or any provision of the laws of any taxing jurisdiction with respect to any payment or distribution to the Partnership or to the Partners shall be treated as amounts distributed to the respective Partners on whose account the withholding was imposed for all purposes under this Agreement.
ARTICLE VIII. RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNERS
8.1 Powers
Subject to the provisions of Paragraphs 8.2 and 8.3 hereof, the management and control of the Partnership and its business and affairs shall rest exclusively with the Managing General Partner, who shall have all the rights and powers which may be possessed by a General Partner pursuant to the Act and such rights and powers as are otherwise conferred by law or are necessary, advisable or convenient to the discharge of its duties under this Agreement and to the management of the business affairs of the Partnership in furtherance of the purposes of the Partnership as set forth in Paragraph 4.1. In the event of any disagreement among the General Partners, the decision of the Managing General Partner shall prevail. Without limiting the generality of the foregoing, the Managing General Partner shall have the rights and powers to do those things set forth below (which subject to Article VI may be exercised at the cost and expense of the Partnership) but only to the extent in the furtherance of the purposes of the Partnership as set forth in Paragraph 4.1:
(a) Expend the capital and income of the Partnership in furtherance of the Partnership's business to optimize the economic yield to the Partners.
(b) Perform all acts necessary to commence and operate the Partnership's business and in connection therewith to hold, manage, operate, exploit, acquire, and sell assets acquired in connection therewith, to enter into contracts for services, and contracts, as, when, if and under such terms and conditions as the General Partners, in their sole discretion, shall deem advisable.
(c) Execute and deliver any deed, bill of sale, mortgage, license, or sublicense, contract for sale, agreement for deed, or other document conveying the interest of the Partnership in any of its assets, or any part thereof, whether held in its name or otherwise. No other signature shall be required. In this regard, the Managing General Partner is expressly authorized to enter into and perform on the Partnership's behalf: the Operative Documents to which the Partnership is a party, including the Project Participation Agreement, the Nonrecourse Notes, the Floating Rate Notes, the Indenture, the Security Documents, the Technical Services Agreement, the O&M Agreement, the Construction Management Agreement, the Project Management Agreement, the EPC Contract, the Ground Lease and any and all documents or agreements related thereto or contemplated thereby.
(d) Cause or allow the legal title to, or any legal or equitable interest in, the assets of the Partnership to be kept in the Partnership's name.
(e) Borrow or raise monies on behalf of the Partnership in the Partnership name in an amount in the aggregate outstanding at any one time not to exceed $1,000,000 and in connection therewith and from time to time draw, make, accept, endorse, execute and issue promissory notes, drafts, mortgages, and other negotiable or non-negotiable instruments and evidence of indebtedness, and secure the payment thereof and of the interest thereon by mortgage or pledge, conveyance or assignment in trust, of the whole or any part of the assets of the Partnership, including contract rights; provided, however, that a creditor who makes a nonrecourse loan to the Partnership must not have or acquire, at any time as a result of making that loan, any direct or indirect interest in the profit, capital, or property of the Partnership other than as a creditor whose recourse is limited to the specified security, provided further that the $1,000,000 limit set forth above shall not apply to loans secured by or related to any loan made to the Partnership by the General Partner to enable the Partnership to comply with the express provisions of any Operative Document or any loan made to the Partnership by LEC pursuant to Section 5.6 of the O&M Agreement, and that this Paragraph shall not apply to either the Nonrecourse Notes or the Floating Rate Notes or to any other indebtedness that is to be discharged on or before the Closing Date.
(f) Engage, retain, or employ, on behalf of the Partnership, such persons, firms or corporations, including the Project Manager under the Project Management Agreement and the Operator under the Operation and Maintenance Agreement, as the General Partners, in their sole discretion, shall deem advisable for the operation and management of the business of the Partnership (including accountants and lawyers) on commercially reasonable terms.
(g) Possess, exercise or refrain from exercising all other rights and powers of a General Partner under the Act.
(h) Expend the funds of the Partnership for the payment of premiums on insurance policies of any kind, nature, and description, but excluding any insurance protecting the General Partners from liabilities or claims relating to the breach of their fiduciary duties to the Partners or negligence.
(i) Enter into contracts, joint ventures, or other transactions on behalf of the Partnership with Limited Partners, subject to the limitations contained in the Act with respect to the preservation of limited liability of such Limited Partners.
(j) Admit persons as Limited Partners of the Partnership upon their contribution of the amount specified in Article V or their compliance with the provisions of Article IX.
(k) Redeem the Units of any Defaulting Limited Partner provided that a like number of Units is contemporaneously issued pursuant to Paragraph 5.3.
(1) Inasmuch as the Partnership will, until certain requirements of the California Sub-Division Map Act are complied with, be leasing real property in addition to that necessary for the Plant, the General Partners may, upon satisfaction of such Subdivision Map Act requirements, amend its leases and sub-leases of real property so as to dispose of such unnecessary real estate (as is contemplated by such leases and sub-leases) provided that it retains or acquires such easements as may be necessary for access to or placement of water lines, natural gas pipelines, other utility connections and access to and from the Plant.
8.2 Duties
The General Partners shall manage and control the Partnership's business and affairs and carry out the business of the Partnership according to their best efforts. The General Partners shall devote such time to the business of the Partnership as the General Partners, in their sole discretion, determine to be necessary and appropriate; provided, however, that:
(a) the Managing General Partner will take, or cause to be taken, all steps necessary to operate the Plant in such a manner that the Partnership will have fully available to it the Investment Tax Credit, the Energy Tax Credit, Equipment ACRS Deductions and Improvements ACRS Deductions and all other tax benefits available under the Code, from time to time, and corresponding California income tax benefits, including, but not limited to the California Solar Energy Tax Credit, with no recapture of any regular investment tax credit or energy investment tax credit;
(b) the General Partners will keep accurate records of the revenues and expenses of the Partnership and will submit reports and other documents required by Article XII to the Partners within the time periods allowed therein;
(c) the Managing General Partner will locate and hire, either on behalf of the Partnership or directly on its own behalf or through subcontractors to the Partnership, all personnel to operate the Plant and all administrative and supervisory personnel for the Plant;
(d) the General Partners shall distribute, subject to any limitations contained in any Operative Document, to the Partners at least quarterly all Partnership cash in excess of its needs for debt service, operating and maintenance expenses and a reasonable reserve for emergencies.
(e) upon failure of the prompt payment by Luz Israel of all amounts due as set forth in a Warranty Certificate, the General Partners shall cause a vote of the Limited Partners, within 30 days of delivery of such Warranty Certificate, with respect to any action to be taken by the Partnership with respect to a draw under the Warranty Letter of Credit or Cermet Letter of Credit.
8.3 Certain Limitations
(a) Except as otherwise provided in Paragraph 8.4, the General Partners shall not do any of the following without the consent of Sixty Percent of the Limited Partners:
	(i) Any act in contravention of this Agreement;
	(ii) Confess a judgment against the Partnership;
	(iii) After the Closing Date, admit a person or entity as a General Partner or Limited Partner, except as provided in Article IX or X;
	(iv) Possess Partnership property or sell, transfer, assign, pledge or subject to mortgage or security interest any Partnership property for other than a Partnership purpose set forth in Paragraph 4.1;
	(v) Sell, exchange, lease, mortgage, pledge, or otherwise transfer all or a substantial part of the assets of the Partnership except as permitted by Paragraph 8.1(e) or as may be required to secure the Nonrecourse Notes or the Floating Rate Notes as contemplated by the Security Documents, the Indenture and the Project Participation Agreement;
	(vi) Suffer indebtedness by the Partnership other than in the ordinary course of its business and as specifically permitted by Paragraph 8.1(e);
	(vii) Make or permit any substantial modification to the EPC Contract;
	(viii) Take or authorize any of the following actions, each of which involves an actual or potential conflict of interest with the Partnership: (A) any termination, cancellation, waiver, amendment or modification in any significant respect of any Operative Document or any contract entered into pursuant to (B) below,(B) entering into any contract in which Luz International Limited or any of its Affiliates or any officers, directors of any thereof is a party or has a material interest; or (C) take any action which pursuant to the terms of Section 4.3 of the Project Management Agreement requires the approval of the Partnership; or
	(ix) Unless sixty (60) days prior notice shall have been given to each Limited Partner, enter into any contract (other than those in effect as of the Closing Date or otherwise expressly authorized by this Agreement) requiring the expenditure of more than one million dollars annually (except where such expenditure is required to avert an emergency or to meet other extraordinary circumstances where such prior notice is impracticable); or
	(x) Make an optional prepayment of any Nonrecourse Notes.
(b) The General Partners shall not do any of the following without the consent of a Majority of the Limited Partners and shall do the following upon the direction of a Majority of the Limited Partners:
	(i) Cause the Disbursement Trustee to make a draw under the Warranty Letter of Credit or the Cermet Letter of Credit; or
	(ii) Take any other action pursuant to Section 17 of the Performance Warranty.
8.4 Actions with Respect to Warranty Letter of Credit, and Cermet Letter of Credit .
(a) In the event that the Institutional Lender, as permitted by the Disbursement Agreement, desires to approve a Substitute Warranty Letter of Credit Bank or Substitute Cermet Letter of Credit Bank that does not meet the standard set forth in Section 4.04(b) of the Disbursement Agreement (a "Change"), then the General Partners shall not consent to any such Change on behalf of the Partnership unless:
	(1) Each Limited Partner has been mailed notice of such proposed change and Limited Partners owning Interests of more than five percent (5%) have not delivered written notice of their objection to the Change within 30 days of the mailing or other delivery of such notice; or
	(2) Whether or not the notice of such an objection is received, the Change has been approved by the vote or written consent of Sixty Percent of the Limited Partners.
(b) In the event that Luz International or any of its Affiliates requests a change in the Warranty Letter of Credit Bank, or the Cermet Letter of Credit Bank, no such change in such issuers shall take place and the General Partners shall not consent to any such change on behalf of the Partnership unless each Limited Partner has been mailed or otherwise delivered notice of such change and it has been approved by the vote or written consent of Sixty Percent of the Limited Partners.
ARTICLE IX. CONVEYANCE OF INTERESTS IN THE PARTNERSHIP
9.1 General Provisions
Limited Partners may not sell, transfer, assign or subject to a security interest all or any part of their Interests in the Partnership and no Person shall become an assignee or be admitted to the Partnership as a substitute or additional Partner except as permitted in this Article IX, and any act in contravention of this Article IX shall be null and void ab initio. In no event may any Partner transfer less than whole Units unless such fractional unit: (i) represents part of the transfer of all of its Units; or (ii) is created by reason of divorce or death (whether by reason of the termination of a trust, or the provisions of a will or the laws of intestate succession).
9.2 Limited Partners
Limited Partners may not sell, transfer, assign, or subject to a security interest any or all of the Interests owned by them, except with the consent of the Managing General Partner (which will not be unreasonably withheld) and provided, that;
(a) Such sale, transfer or assignment, when aggregated with any prior sales, transfer or assignments of Partnership interests, does not result in a sale or exchange within a 12-month period of 50 percent or more of the total interests in the Partnership's capital and profits within the meaning, and for purposes of, Section 708(b) of the Code (or any comparable provision of applicable state law);
(b) Such Limited Partner and the respective purchaser, transferee, or assignee each executes, acknowledges, and delivers to the General Partners such instruments of transfer and assignment with respect to such transactions as are satisfactory in form and substance to the Managing General Partner;
(c) Such Limited Partner furnishes either an opinion of counsel, or other acceptable evidence, satisfactory in form and substance to the Managing General Partner, to the effect that: (i) the sale, transfer, or assignment will not dissolve the Partnership or otherwise impair the ability of the Partnership to be treated as a partnership under applicable income tax laws; (ii) such sale, transfer, or assignment will not violate any applicable Federal or state securities law; (iii) such sale, transfer, or assignment will not cause the Partnership to lose its exemption from certain Federal and state public utility laws provided by the Public Utility Regulatory Policies Act of 1978; and (iv) such sale, transfer or assignment will not cause adverse tax consequences (including without limitation investment tax credit recapture) to the Partnership or any Partner;
(d) The Partnership is paid a reasonable transfer fee which is sufficient to pay actual and reasonable costs and expenses of the Partnership in connection with such transactions;
(e) The purchaser, transferee, or assignee represents in writing that the Interests are for such person's own account for long term investment and not with a view toward resale, fractionalization, division, or distribution thereof in a manner that would violate Federal or state securities laws or require registration thereunder; provided , however , that the Managing General Partner shall give such consent with respect to any transferee of a Class B Limited Partner that has transferred its Interests in accordance with the provisions of Paragraph 9.7 hereof.
(f) Such purchaser, transferee, assignee, or holder of, such security interest (or any person who acquires such Interests upon foreclosure of such security interest) shall not become a Limited Partner unless the Managing General Partner consents in writing to such person becoming a Limited Partner, which consent may be given or withheld in the sole discretion of the General Partners; provided, however, that the Managing General Partner shall give such consent with respect to any transferee of a Class B Limited Partner that has transferred its Interests in accordance with the provisions of Paragraph 9.8 hereof. Any such purchaser, transferee, assignee, or holder of such security interest (or any person who acquires such Interests upon foreclosure of such security interest) who is not admitted as a Limited Partner shall be entitled, to the extent assigned, only to the profits, losses and distributions to which the assigning Limited Partner would have been entitled and shall not be entitled to any of the rights as Limited Partner, including, without limitation, any right to: (i) vote on any Partnership matter, (ii) require any information or accounting from the Partnership, (iii) inspect the Partnership's books and records, or (iv) make or approve any Partnership decision or otherwise participate in the management of the Partnership. The assigning Limited Partner shall remain a Limited Partner until such time, if any, that the Managing General Partner consents to the assignee becoming a Limited Partner and the provisions of Paragraph 9.3 are otherwise complied with.
9.3 Admission as Limited Partner
If the Managing General Partner consents to the admission as a Limited Partner of a purchaser, transferee or assignee permitted by Paragraph 9.2, and such purchaser, transferee or assignee (a) elects to become a Limited Partner by delivering a written notice of such election to the Managing General Partner, (b) executes and acknowledges such other instruments as the Managing General Partner may deem necessary, required, or advisable to effect the admission of such person as a Limited Partner, including without limitation the written acceptance and adoption by such person of the provisions of this Agreement, and (c) pays a reasonable transfer fee to the Partnership which is sufficient to cover alt actual and reasonable expenses in connection with the admission of such person as a Limited Partner, then, all steps .shall be taken which, in the opinion of the Managing General Partner, are reasonably necessary to admit such person under the Act as a Limited Partner, and such person shall thereupon become a Limited Partner.
9.4 Purchase of Interests by the General Partners
Except with the consent of Sixty Percent of the Limited Partners, no General Partner shall be permitted to purchase any portion of the Partnership Interests of any Limited Partner.
9.5 Death or Dissolution of a Class A Limited Partner or Other Holder or Spouse Thereof
Upon the death or dissolution of a Class A Limited Partner or other Holder of Class A Units, such Limited Partner's estate, devisee, heirs and/or transferees shall succeed to such Limited Partner's Interests and shall be bound by the terms and provisions of this Agreement. However, in the event that any Unit of the deceased or dissolved Class A Limited Partner or spouse thereof or other Holder of Class A Units does not pass to a single trust or passes to more than one heir, devisee or transferee, or, upon termination of any such trust, is distributed to more than one beneficiary, then, in that event, all such heirs, devisees, transferees and/or beneficiaries ("Distributees") shall, within ninety (90) days after distribution by the estate of the deceased Limited Partner or other Holder of Interests or,by the representative of the Limited Partner so dissolved, execute and deliver to the General Partners a written instrument (including a power of attorney) appointing one person, firm or corporation as and to be the agent ("Agent") of and for the Distributees. The Agent shall be responsible for collecting, receiving and making all payments and contributions required hereunder, shall vote all Units of the Distributees, and shall perform all other obligations of such Distributees performable by reason of or arising from their Units, and any and all payments and/or disbursements due the Distributees for or arising from their Units shall be deemed to have been validly made to such Distributees by paying the same to the Agent. In the event that the Distributees for any reason fail to designate an Agent in writing in the manner and within the time prescribed above and continue to fail to cure such default after ten (10) days written notice from the General Partners to correct the same, the General Partners shall have the right, at their election, to withhold all sums that are payable with respect to the Units of the Distributees until such time as the Partnership is dissolved or such default is cured. So long as-such default exists with respect to any Distributee, their Units may not be voted. Whenever Units may not be voted on a transaction by reason of the previous sentence, the Units-deemed issued and outstanding and owned by the Limited Partners shall be reduced by the number of the Units which may not be voted. Upon the death of the spouse of a Class A Limited Partner or other Holder of Class A Units having a community property interest in any Units, the foregoing provisions of this Paragraph 9.6 shall apply to all of the deceased spouse's community property interest in the surviving spouse's Units in the Partnership which does not pass to the surviving spouse by will or through operation of law, and such provisions shall be applied to such Units as though the Limited Partner or Holder of Class A Units had owned such Units and had died on the date of such Class A Limited Partner's spouse's death leaving such Units to the actual recipients thereof.
9.6 Voluntary Withdrawal by Limited Partner
If at any time during the term of the Partnership, a Limited Partner or any Affiliate of a Limited Partner, by reason of its interest in the Partnership or any transaction contemplated by this Agreement or the Project Participation Agreement shall be deemed by any governmental authority having jurisdiction to be an "electric utility", a "public utility", a "public Utility holding company" or a similar entity subject to regulation under the Federal Power Act, the Public Utility Holding Company Act of 1935, as amended, the California Public Utility Law or any other Federal, state or local law or regulation, then, upon demand made by such Limited Partner to the Managing General Partner, the Partnership shall forthwith purchase and such Limited Partner shall forthwith sell to the Partnership, all right, title and interest in the limited partnership interest of such Limited Partner in the Partnership for a price equal to the present value of all future distributions to such Limited Partner of income and capital, as determined by a firm of independent accountants based on the following assumptions:
	(i) a discount rate of 11 percent per annum;
	(ii) the sale of all of the assets of the Partnership at the termination of the Partnership.
The purchase price as so calculated shall bear interest from the date of sale at the rate of 11 percent per annum compounded annually and shall be deferred by such Limited Partner and paid by the Partnership, at the times it is otherwise permitted to distribute to Partners, in installments equal to the amount of income and capital that the Partnership would have distributed to such Limited partner had it not sold its limited partnership interest in the Partnership, including any amounts that would have been distributed to such Limited Partner upon the liquidation of the Partnership. Any amount remaining upon the liquidation of the Partnership and payment of such income and capital to such Limited Partners shall be extinguished.
9.7 Non-Utility Status . If at any time after the closing described in Section 2.2 of the Project Participation Agreement (the "Closing") and during the term of the Partnership (a) any Class B Limited Partner shall for any reason be deemed to be an "electric utility" or an "electric utility holding company" as such terms are used in the Public Utility Regulatory Policies Act of 1978 and the Regulations thereunder (18 CFR Part 292), or a similar entity (including without limitation a "public utility" as such term is defined in the Federal Power Act, or a "holding company," a "subsidiary company," an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company" as such terms are defined in the Public Utility Holding Company Act of 1935) subject to regulation under the Federal Power Act, the Public Utility Holding Company Act of 1935, as amended, the California Public Utility Law or any other comparable Federal, state or local law or regulation (any such event, a "Deemed Utility Status"), and (b) such Class B Limited Partner shall acquire, directly or indirectly, additional Interests in the Partnership and/or such Class B Limited Partner shall have first acquired such Deemed Utility Status after the Closing, such Class B Limited Partner shall immediately (i) give notice thereof to the Managing General Partner and each other Class B Limited Partner, and (ii) cause all Interests in the Partnership owned by such Class B Limited Partner to be transferred in accordance with the terms of Paragraph 9.2 hereof, whether at their fair market value or otherwise, to a transferee that (A) does not have Deemed Utility Status and would not acquire Deemed Utility Status as a result of such transfer, and (B) agrees to comply with the provisions of Paragraph 9.3 hereof; provided , however , that no such Class B Limited Partner shall be required to cause the transfer of such Interests, or to cause the transfer of a greater percentage of Interests than would enable delivery of the opinion described immediately hereafter, if such Class B Limited Partner shall have provided an opinion of counsel, satisfactory to the Managing General Partner and each other Class B Limited Partner and addressed to the Partnership and to each of them, to the effect that such additional Interests or such Deemed Utility Status (1) will not cause the General Partners or any other Class B Limited Partner or the Partnership to have Deemed Utility Status, and/or (2) will not cause the status of the Facility as a "qualifying small power production facility" under the Public Utility Regulatory Policies Act of 1978 and the Regulations thereunder to be adversely affected.
ARTICLE X. WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER; ELECTION OF A GENERAL PARTNER
10.1 Resignation of, Withdrawal of, or Assignment by a General Partner
The General Partners shall not have the right to withdraw their interests in or resign from the Partnership. The General Partners may not sell, transfer, assign, or subject to a security interest all or any part of their Interests to any person, or admit any person as substitute General Partners. However any General Partner may substitute any other person or entity as a substitute General Partner provided that such substitution is consented to in writing by all other General Partners and approved by the vote or written consent of Sixty Percent of the Limited Partners.
10.2 Removal of a General Partner
A General Partner shall be removed as a General Partner of the Partnership effective as of the date specified in Paragraph 10.3 upon the vote or written consent of a Majority of the Limited Partners to remove such General Partner, if such General Partner is in default pursuant to the terms of this Agreement, and has not cured such default within thirty (30) days after written notice thereof from the Partners, or without cause, upon the vote or written consent of a Majority of the Limited Partners who are not Affiliates of any General Partner to remove; provided, however, such removal shall not eliminate any then existing obligations of the Partnership to such General Partner or the General Partner to the Limited Partners.
10.3 Notice of Removal
Written notice of the removal of a General Partner shall be given by the Partners voting to remove such General Partner pursuant to Paragraph 10.2 hereof, to such General Partner and to all other Partners. Such notice shall set forth the day upon which the removal is to become effective, which date shall not be less than thirty (30) days after such notice is given to the last party required to be notified.
10.4 Termination of a General Partner
A General Partner shall cease to be a General Partner of the Partnership upon the happening of any of the following events:
(a) The General Partner is removed as a General Partner as provided in Paragraph 10.2.
(b) An order for relief against the General Partner is entered under Chapter 7 of the federal bankruptcy law, or the General Partner: (i) makes a general assignment for the benefit of creditors, (ii) files a voluntary petition under the federal bankruptcy law, (iii) files a petition or answer seeking for that General Partner any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute law, or regulation, (iv) files an answer or other pleading admitting or failing to contest material allegations of a petition filed against that General Partner in any proceeding of this nature or (v) seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of the General Partner or of all or any substantial part of that General Partner's properties.
(c) Sixty (60) days after the commencement of any proceeding against the General Partner seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or within sixty (60) days after the appointment without that General Partner's consent or acquiescence of a trustee, receiver, or liquidator of the General Partner or all or any substantial part of that General Partner's properties, the appointment is not vacated or stayed, or within 60 days after the expiration of any such stay, the appointment is not vacated.
(d) In the case of an Individual General Partner, either of the following: (i) the death of that Individual General Partner, or (ii) the entering by a court of competent jurisdiction of an order adjudicating that Individual General Partner incompetent to manage his or her person or estate.
(e) In the case of a Corporate General Partner, the filing of a certificate of dissolution, or its equivalent, for the Corporate General Partner.
(f) Any other event specified in the Act.
10.5 Liability of General Partner after Termination
Upon a General Partner's ceasing to be a General Partner in accordance with the provisions of the Agreement, all future liability of the applicable General Partner as a General Partner shall cease as provided in the Act and the Partnership shall promptly take all steps reasonably necessary under the Act to cause such cessation of liability. The remaining General Partners shall amend the Certificate of Limited Partnership to reflect that the former General Partner is no longer a General Partner of the Partnership.
10.6 Compensation of General Partner Upon Termination
Upon a General Partner ceasing to be a General Partner in accordance with the provisions of this Agreement, such General Partner's Interest in the Partnership shall be converted from a general partnership Interest to a limited partnership Interest and such person shall be forthwith admitted as a Special Limited Partner of the Partnership with the same interest in profits and losses as it had as a General Partner but with no right to vote on any matter.
10.7 Election of Substitute General Partner
Upon the last General Partner ceasing to be a General Partner in accordance with the Agreement or within thirty (30) days thereafter, if, pursuant to Paragraph 11.2 of the Agreement, the Limited Partners elect to continue the business of the Partnership, substitute General Partners may be elected by the unanimous vote or written consent of the Limited Partners.
10.8 Election of Additional General Partners
Unless the last General Partner shall have ceased to be a General Partner in accordance with this Agreement, upon the vote or written consent of at least a Majority of the Limited Partners, any person or entity may be elected a General Partner. Upon such election, said additional General Partner shall have all the rights, powers and duties of a General Partner under this Agreement.
10.9 [intentionally omitted]
10.10 Change in Managing General Partner
A Majority of the Limited Partners may by vote or written consent, with or without cause, change the Managing General Partner and designate any other General Partner (who consents to serve) as the Managing General Partner. Any such change shall be effective immediately upon notice of such vote or consent being delivered to the removed Managing General Partner.
ARTICLE XI. DISSOLUTION AND WINDING-UP OF THE PARTNERSHIP
11.1 Dissolution of the Partnership
The Partnership shall be dissolved upon the first of any of the following events to occur:
(a) The last General Partner ceases to be a General Partner in accordance with the provisions of this Agreement unless the Partners agree in writing to continue the business of the Partnership as provided in Paragraph 11.2 and to admit one or more General Partners as provided in Paragraph 10.7. A General Partner ceasing to be a General Partner shall not dissolve the Partnership if there is a remaining General Partner or a substitute General Partner who elects to continue the business of the Partnership. Such General Partner is hereby authorized to continue the business of the Partnership.
(b) The vote or written consent to dissolve by all General Partners and Sixty Percent of the Limited Partners.
(c) The expiration of the term of the Partnership.
(d) The sale, transfer or other irrevocable disposition of all or substantially all of the property of the Partnership.
(e) Otherwise by operation of law.
11.2 Election upon Dissolution
Upon a dissolution of the Partnership pursuant to Paragraph 11.l (a), any one or more of the Limited Partners shall, promptly after such dissolution, give notification thereof to the other Limited Partners and shall call for a vote of the Limited Partners to continue the business of the Partnership or to wind-up the Partnership pursuant to Paragraph 11.3 of this Agreement. The former General Partner shall be deemed to have elected and hereby agrees to continue the business or the Partnership, and if all Limited Partners elect affirmatively to continue the business of the Partnership a substitute General Partner shall be elected pursuant to Paragraph 10.7 of this Agreement and all of the Limited Partners shall execute a unanimous written consent or other written agreement to evidence their election to continue the business of the Partnership.
11.3 Winding-Up of the Partnership
Upon the election of the Partners to wind-up the Partnership, or the failure of the Limited Partners to elect to continue the business of the Partnership and to evidence such election in writing or to elect a substitute General Partner pursuant to Paragraph 11.2, or upon a dissolution of the Partnership pursuant to Paragraph 11.l (b), 11.1(c), 11.l (d), or 11.l (e), the General Partners (or if there is not a General Partner, a substituted General Partner or liquidator elected by a Majority of the Limited Partners) shall take full account of the Partnership's assets and liabilities and the assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, after the allocations prescribed in Paragraph 7.2 have been made for the year of dissolution, shall be applied and distributed in the following order of priority:
(a) To the payment of the debts and liabilities of the Partnership and the expenses of liquidation in the following order: (i) those owing to creditors other than Partners, and (ii) those owing to Partners.
(b) To the setting up of any reserves which the General Partner or liquidator may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership (provided that if and when such contingencies shall cease to exist, any remaining assets in such reserves shall be distributed as provided herein).
(c) To Partners and former Partners in satisfaction of liabilities for distributions under Sections 15661, 15664 and 15665 of the Act.
(d) To Partners in accordance with their respective positive capital account balances, and former Partners to the extent of amounts due pursuant to Paragraph 9.6 of the Agreement.
(e) To Partners in accordance with their respective Interests.
ARTICLE XII. BOOKS OF ACCOUNT, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING AND TAX ELECTION
12.1 Books of Account
The Managing General Partner shall keep, or cause to be kept, adequate books and records, setting forth a true and accurate account of all business transactions arising out of or in connection with the conduct of the Partnership's business, at the Partnership's principal executive office. The Limited Partners and their designated representatives shall be permitted to inspect and copy all books and records during normal business hours. Without limiting the generality of the foregoing provisions, the Partnership shall keep at its principal office all of the following:
(a) A current list and the full name and last known business or residence address of each Partner set forth in alphabetical order together with the contribution and the share and profits and loss of each Partner.
(b) A copy of the Certificate of Limited Partnership and all Certificates of Amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed.
(c) Copies of the Partnership's Federal, state, and local income tax or information returns and reports, if any, of the six most recent taxable years and all relevant records for as long as necessary to satisfy applicable law.
(d) Copies of the original partnership' agreement and all amendments thereto.
(e) Financial statements of the Partnership for the six most recent fiscal years.
(f) The Partnership's books and records for at least the current and past three fiscal years.
Upon the request of a Limited Partner, the General Partners shall promptly deliver to the Limited Partner, at the expense of the Partnership, a copy of the information required to be maintained by clauses (a), (b), or (d) immediately above.
12.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
12.3 Accounting and Reports
As soon as reasonably practicable after the end of each fiscal year, but not later than seventy-five (75) days after such end, each Partner shall be furnished with a copy of the balance sheet of the Partnership as of the last day of such fiscal year, an income statement for such fiscal year, and a statement showing the amounts allocated to or allocated against such Partner's Capital Account pursuant to the Agreement during or in respect of the year, and all items of income, gain, deduction, credit, or loss allocated for purposes of the Code as amended from time to time, and any applicable state or local income tax laws pursuant to the Agreement. Such balance sheet and statement of income shall be prepared on the accrual method of accounting. The Managing General Partner shall notify each Limited Partner, promptly upon obtaining knowledge thereof, of any default under the Operative Documents which, in its judgment, is likely to have a material adverse effect on the Project.
12.4 Capital Accounts
(a) A capital account shall be maintained for each Partner in accordance with Treasury Regulations Section 1.704-l (b), or any successor provision as follows: (i) each Partner's Capital Account shall be credited with the amount of any Capital Contribution made by the Partner, (ii) each Partner's Capital Account shall be credited with the fair market value of any property contributed by the Partner to the Partnership (net of liabilities secured by such contributed property that the partnership is considered to assume or take subject to under Section 752 of the Code, as amended from time to time), (iii) each Partner's Capital Account shall be credited with allocations to the Partner of Net Profits; (iv) each Partner's Capital Account shall be debited with the amount of cash distributed to the Partner; (v) each Partner's Capital Account shall be debited with the fair market value of any property distributed to the Partner by the Partnership (net of liabilities secured by such property that such Partner is considered to assume or take subject to under Section 752 of the Code, as amended from time to time); and (vi) each Partner's Capital Account shall be debited with allocations to the Partner of Net Loss.
(b) Upon a distribution in kind of Partnership property, the capital account of each Partner will be debited or credited under Article VII with such Partner's allocable share of the gain or loss which would have been recognized by the Partnership had the property been sold for an amount equal to its fair market value immediately prior to such distribution.
(c) If any Interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the capital account of the transferor to the extent it relates to the transferred Interest.
(d) The Capital Account of each Partner shall be reduced by an amount equal to the percentage of the "energy percentage" and the "regular percentage" of any United States federal investment tax credit in respect of the Project allocated to such Partner (or any predecessor in interest) by which the Partnership is required to reduce its basis in the property eligible for depreciation for federal income tax purposes on account of such credits.
(e) The Capital Account of each Limited Partner, to the extent attributable to Class A Units held by such Partner, and of each General Partner, shall be reduced by 65.79 percent of any California solar energy tax credit in respect of the Project allocated to such Partner (or its predecessor in interest) except that if the amount of the reduction pursuant to subparagraph (d) shall be based on a percentage of United States federal investment tax credit that is greater than 50 percent for the "energy percentage" of the United States federal investment tax credit, the amount of the reduction hereunder shall be an amount equal to such percentage of the California solar energy tax credit as may be deemed necessary to ensure that the aggregate Capital Accounts of he Holders of Class A Units will equal one percent (1%) of the aggregate Capital Accounts of the holders of both Class A Units and Class B Units (disregarding any portion of the Capital Accounts of the holders of Class B Units referable to the ownership of Class A Units) after the adjustment required by clause (d) above and disregarding any other item of income, gain, loss or deduction that may have been credited to the Capital Account of any Partner.
(f) The Capital Account of each Partner shall be increased by an amount equal to any increase in the tax basis of the Project attributable to a recapture of any United States federal investment tax credit in the same proportion as such investment tax credit recapture is allocated to such Partner.
12.5 Banking and Investment Funds
All funds of the Partnership shall be deposited with the Disbursement Trustee in accordance with the terms of the Disbursement Agreement, or shall be deposited in a separate bank account or accounts in a bank having a net worth and capital surplus in excess of $100,000,000 or invested in U.S. government obligations having maturities of no more than one year, or certificates of deposit rated A-1 or P-1 by a national rating agency.
12.6 Tax Election
Upon the transfer of a Class B Unit in the Partnership or distribution of the Partnership's assets to a Class B Limited Partner, the Tax Matters Partner may cause the Partnership to elect pursuant to Section 754 of the Code, to adjust the basis of the Partnership's property as allowed by Section 734(b) and Section 743(b) thereof upon the consent of Sixty Percent of the Limited Partners.
12.7 Partnership Returns
The General Partners shall, for each fiscal year required, file with the U. S. Internal Revenue Service on behalf of the Partnership, a U. S. Partnership Information Return within the time prescribed by law (including extensions) for such filing. The General Partners shall also file on behalf of the Partnership such state, local, or foreign income tax returns as may be required by applicable law. Within 60 days after the end of each fiscal year of the Partnership, the General Partners shall send to each of the Partners such information as is necessary to complete federal, state and local income tax or information returns, including Schedules K-l (or their equivalent successor tax reports) and copies of the Partnership's Federal, state and local income tax or information returns for the year.
12.8 Tax Matters Partner
The Managing General Partner is hereby designated as the "Tax Matters Partner" of the Partnership as said term is defined in Section 6231(a)(7) of the Code and any comparable provision of State or local law and in such capacity and pursuant to applicable law, agrees as follows:
(i) to timely file all necessary federal, state and local partnership returns for the Partnership and to furnish the Limited Partners with schedules consistent with the treatment of all items on those returns;
(ii) to keep the Limited Partners fully and timely informed of all administrative and judicial proceedings for the adjustment of Partnership items (as defined in Section 6231(a) (3) of the Code and any comparable provision of state or local law) at the Partnership level and shall, without limitation, forward to each Limited Partner any agent's reports and notices of conferences and all other correspondence pertaining to the progress of any audit being conducted by any federal, state or local taxing authority;
(iii) to notify all Limited Partners of any intention to file any petition for a redetermination of Partnership items within 5 business days from the date of receipt of the statutory notice of deficiency; and
(iv) not to extend the statute of limitations for assessment of tax deficiencies against any Partner with respect to adjustments to the Partnership's federal, state or local tax returns without the consent of a Majority of the Limited Partners.
Any Partner who enters into a settlement agreement with any taxing authority with respect to any Partnership items shall notify the Tax Matters Partners of the agreement and its terms within 60 days from its date, and the Tax Matters Partner shall notify the other Partners of the settlement within 30 days of receipt of notification by the Partner entering into the settlement.
In addition to the foregoing, actions by the Tax Matters Partner shall be subject to the restriction that the Tax Matters Partner, on its own or at the request of a Limited Partner, may file a request for administrative adjustment on behalf of the Partnership unless (after due and timely notice in writing and opportunity to object) a Majority in Interest of Limited Partners having an interest in the outcome (as defined in Section 6226(d) of the Code) instruct the Tax Matters Partner not to file such a request.
12.9 Financial Statements and Reports
The General Partners shall deliver audited financial statements to the Partners annually accompanied by a report of independent accountants of recognized national standing. Such statements shall include an income statement, balance sheet and statement of changes in financial condition. Such annual report shall discuss the activities of the Partnership for the year and provide a General Partner's discussion of the results of operations and other operating and financial data for the year. Such statements and report shall be delivered no later than ninety (90) days after the end of each calendar year. In addition, similar unaudited quarterly statements and quarterly reports shall be prepared and delivered within forty-five days after the end of each calendar quarter.
12.10 Partnership Level Administrative and Judicial Proceedings
(a) In the event of any Partnership level proceeding instituted by the Internal Revenue Service pursuant to Sections 6221 through 6233 of the Code, or any comparable provision of state or local law, the Tax Matters Partner shall upon written request of Sixty Percent of the Limited Partners relinquish control of the nature and content of all action and defense to be taken by the Partnership in response to such proceeding to the Participants (as defined in the Tax indemnity Agreement), pursuant, in the case of federal income taxes to and in accordance with Section 9 of the Tax Indemnity Agreement. The Tax Matters Partner hereby further agrees on written request of Sixty Percent of the Limited Partners to relinquish all control of the nature and content of all proceedings pursuant to Sections 6221 through 6233 of the Code or any comparable provision of state or local law instituted by or on behalf of the Partnership, including the decision to institute such proceedings, whether administrative or judicial, and whether in response to a previous proceeding against the Partnership or otherwise, to such Participants; or
(b) Upon the election of Sixty Percent of the Limited Partners, such Person as shall be designated by such Partners shall be admitted to the Partnership as a General Partner and shall upon admission to the Partnership be substituted as the Tax Matters Partner of the Partnership. Such substitute Tax Matters Partner shall not be bound by the provisions of paragraph (a) above.
12.11 Partnership Information Meetings and Reports
(a) Until the later of (i) December 31, 1990 or (ii) such time as the Plant has met 95% of its annual projected output, the Managing General Partner shall once each calendar quarter, with the first such meeting to be held during the first calendar quarter of 1989, call a meeting of the Limited Partners to discuss and report on Plant operations. Thereafter the Managing General Partners shall call such a meeting at least once each calendar year.
(b) So long as the Managing General Partner is obligated to call a quarterly meeting pursuant to Paragraph 12.11 (a) it shall, on a monthly basis, commencing with the month of January 1989, send a report to each holder of a Class B Unit setting forth the amount of electricity produced for said month. Such monthly reports shall be delivered no more than thirty days after the end of the previous month. At such time as quarterly meetings are no longer required, such information shall be delivered on an annual basis and shall be sent no later than forty-five (45) days after the end of the calendar year.
(c) At least sixty (60) days prior to the beginning of each Partnership fiscal year commencing after 1987, the Managing General Partner shall send each Limited Partner the proposed budget for the Partnership's next fiscal year, which budget shall, among other things, describe the amount and type of insurance coverage provided for therein and the cost thereof.
ARTICLE XIII. POWER OF ATTORNEY
13.1 Power of Attorney
Each Partner holding Interests at the time of admission to the Partnership which includes less than 40 Class B Units hereby makes, constitutes, and appoints each of the General Partners, acting alone, and any successor or additional General Partners, with full power of substitution and resubstitution, their true and lawful attorney for them in their name, place and stead and for their use and benefit, to sign, execute, certify, acknowledge, swear to, file and record this Agreement, and to sign, execute, certify, acknowledge, file and record all instruments amending this Agreement, as now or hereafter amended, that may be appropriate, and such agreements or other instruments or documents (i) to reflect the exercise by the General Partners of any of the powers granted to them under the Agreement; (ii) to reflect any amendments made to the Agreement by the Partners pursuant to the Agreement (iii) to reflect the admission to the Partnership of any General Partner, Limited Partner, substituted Limited Partner or General Partner, or the withdrawal of any Partner in the manner prescribed in the Agreement; and (iv) which may be required of the Partnership or of the Partners by the laws of the State of California, or any other jurisdiction. Each such Partner authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary or advisable in connection with any of the foregoing, hereby giving such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in and about the foregoing as fully as such Partner might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact shall lawfully do or cause to be done by virtue thereof.
13.2 Duration of Power
The power of attorney granted pursuant to Paragraph 13.1 of this Agreement:
(a) Is a special power of attorney coupled with an interest and is irrevocable, and shall survive the death, dissolution, incompetency, bankruptcy or legal incapacity of the applicable Limited Partner;
(b) May be exercised by the attorney-in-fact by listing all of the Partners who have granted a power of attorney pursuant to Paragraph 13.1 and who are executing any agreement, certificate, instrument or document with the single signature of such attorney-in-fact acting as attorney-in-fact for all Partners; and
(c) Shall survive the delivery of an assignment by a Partner of any or all interests in the Partnership, except that where the purchaser, transferee, or assignee thereof has the right to be, or with the consent of the General Partners is admitted as, a Limited Partner, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling each such attorney-in-fact to execute, acknowledge, swear to, and file any such agreement, certificate, instrument, or document necessary to effect such substitution. Any assignee or successor of a Partner who has granted a power of attorney under Paragraph 13.1 does hereby make, constitute, and appoint the General Partners, and any successor or additional General Partners, his attorney-in-fact in the same manner and force and for the same purposes, as the assignor or person succeeded.
ARTICLE XIV. LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS
14.1 Exoneration
Except in case of: (i) bad faith; or (ii) willful misconduct; or (iii) in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances; the doing of any act or the failure to do any act by the General Partners in their capacities as such, the effect of which may cause or result in loss or damage to the Partnership, if done pursuant to the advice of legal counsel employed by the General Partners on behalf of the Partnership, or if done in good faith to promote the best interests of the Partnership, shall not subject the General Partners to any liability to the Partners or the Partnership. The foregoing shall not affect or diminish any rights which the Partnership may have against a General Partner by reason of contracts entered into with such General Partner for the performance of services as contemplated in Paragraph 8.1. The General Partners shall diligently enforce the provisions of all such contracts on behalf of the Partnership.
above in defending any proceeding prior to the final disposition of such proceeding; provided, however, that any such General Partner, agent or employee, prior to receiving any advancement hereunder shall execute and deliver to the Partnership an undertaking to repay any and all amounts advanced unless it shall be determined ultimately that such person is entitled to be indemnified as authorized above.
14.3 Liability
Notwithstanding anything in this Agreement to the contrary, except for liability described in Paragraph 14.2, the General Partners shall not be personally liable for the return of the Capital Contribution of any Partner, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets. Nothing herein shall affect any liability of any General Partner under any Operative Document other than this Agreement.
ARTICLE XV. MISCELLANEOUS
15.1 Notices
Except as required by Paragraph 15.5, any notice, payment, demand, offer or communication required or permitted to be given by any provision of the Agreement shall be sufficient if delivered in accordance with the Notice Provisions attached as Schedule Y-1 to the Project Participation Agreement.
14.2 Indemnification
The Partnership shall defend, indemnify and hold harmless the General Partners including all officers, directors, employees, or agents of the General Partners and each Partnership, employee or agent against all claims, actions, demands, losses, liabilities, costs, expenses (including all attorneys' fees), damages and threat of loss as a result of any claim or legal proceeding relating to the performance or non-performance of any act concerning the activities of the Partnership (other than acts and omissions arising from or in connection with any contract with the Partnership pursuant to which such General Partner acts as agent for the owners of the Plant or performs management, operation, maintenance or other services at the Plant and other than any loss, claim or damage arising out of or based upon any violation of any state or federal securities law, or any rule. or regulation promulgated thereunder); provided, however, the person or party against whom a claim is made or legal proceeding is directed must not have been culpable of gross negligence, bad faith or willful misconduct, or, in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances. The Partnership shall advance any and all reasonable expenses incurred by a General Partner, agent or employee as described
15.2 Captions
Paragraph and other captions contained in the Agreement are for reference purposes only and do not interpret, define or limit the scope, extent or intent of this Agreement, or any provision hereof.
15.3 Severability
Every provision of this Agreement is severable. If any term or provision hereof is held to be illegal or invalid for any reason by any duly constituted court, agency, or tribunal, such illegality or invalidity shall not affect the validity of the remainder of the Agreement.
15.4 Amendments
Amendments to this Agreement may be proposed by the General Partners or by the Limited Partners having an aggregate Interest of ten percent (10%) or more, and the General Partners shall transmit to the Limited Partners a verbatim statement of any proposed amendment and may include with any such submission their recommendations as to the proposed amendment. The General Partners shall seek the written vote of the Limited Partners on the proposed amendment or shall call a meeting of the Limited Partners to vote thereon. A proposed amendment shall be adopted and become effective as an amendment hereto if it receives the affirmative vote of Sixty Percent of the Limited Partners.
15.5 Meetings and Means of Voting
A meeting of the Partners for any matters on which the Limited Partners may vote may be called by any of the General Partners or by Limited Partners holding more than 10% of the Interests held by all Limited Partners. Whenever the Partners are required or permitted to take any action at a meeting, a written notice of the meeting shall be given not less than 10, nor more than 60, days before the date of the meeting to each Partner entitled to vote at the meeting. The notice shall state the place, date, and hour of the meeting and the general nature of the business to be transacted, and no other business may be transacted. Meetings of Partners may be held at any place within or without the State of California as may be specified in the notice of Meeting. If no place is stated in such notice, the meeting shall be held at the principal executive office of the Partnership. Notice of the meeting shall be given, and voting at the meeting shall be conducted, as provided in Section 15637 of the Act or any successor provision thereto.
15.6 Right to Rely Upon the Authority of the General Partners
No person dealing with the General Partners shall be required to determine the General Partners' authority to make any commitment or undertaking on behalf of the Partnership, nor to determine any fact or circumstance bearing upon the existence of their authority. In addition, no purchaser of any asset owned by the Partnership shall be required to determine the sole and exclusive authority of the General Partners to sign and deliver on behalf of the partnership any such instrument of transfer, or to ensure the proper application or distribution of revenues or proceeds paid or credited in connection therewith, unless such purchasers shall have received written notice from the Partnership affecting the same.
15.7 Litigation
The General Partners shall prosecute and defend such actions at law or in equity as may be necessary to enforce or protect the interests of the Partnership. The Partnership and the General Partners shall respond to any final decree, judgment, or decision of a court of' competent jurisdiction in the matter. The Partnership shall satisfy any such judgment, decree, or decision first out of any insurance proceeds available therefor, and then out of the capital and assets of the Partnership.
15.8 Governing Law
The local, internal laws of California shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, except as to the partnership interests of any FSLIC insured, federal associations that may become Limited Partners under this Agreement as to which applicable federal law and regulations shall be controlling to the extent that such federal law and regulations conflict with the local, internal laws of California.
15.9 Waiver of Action for Partition
Each of the parties hereto irrevocably waives, during the term of this Partnership and during the period of its liquidation following any dissolution, any right that such party might have to maintain any action for partition with respect to any of the assets of the Partnership.
15.10 Counterparts
This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had executed the same counterpart. All counterparts shall be construed together and shall constitute one agreement.
15.11 Parties in Interest
Each and every covenant, term, provision and agreement herein contained shall be binding upon and inure to the benefit of the permitted successors and assigns of the respective parties hereto.
15.12 Integrated Agreement
This Agreement supersedes all prior agreements, understandings, restrictions, representations or warranties among the General Partners and the Limited Partners with respect to the subject matter hereof.
15.13 Right to Rely Upon Authority of Person Signing Agreement
In the event that a Limited Partner is a trust (with or without disclosed beneficiaries), partnership, limited partnership, joint venture, corporation, or any entity other than a natural person, the Partnership and the General Partners shall (i) not be required to determine the authority of the person signing the Agreement or any amendment thereto to make any commitment or undertaking on behalf of such entity, nor to determine any fact or circumstance bearing upon the existence of his authority; (ii) not be required to see to the application or distribution of revenues or proceeds paid or credited to the person signing the Agreement or any amendment hereto on behalf of such entity; (iii) be entitled to rely upon the authority of the person signing this Agreement or any amendment hereto with respect to the voting of the Interest of such entity and with respect to the giving of consent on behalf of such entity in connection with any matter for which consent is permissible or required hereunder; and (iv) be entitled to rely upon the authority of any general partner, joint venturer, co-trustee, successor trustee, or president, vice president, or other officer (as the case may be) of any such entity the same as though such person were the person originally executing this Agreement or any amendment hereto on behalf of such entity.
15.14 Rights of Non-Recourse Creditors
No non-recourse creditor of the Partnership shall have or acquire, at any time as a result of making any loan or advance, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor limited to the particular asset which is the subject of recourse.
15.15 Number and Gender
Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders and the word "person" shall include corporation, firm, partnership or other form of association.
15.16 Partner Representations
Each Partner represents and warrants to the Partnership and to each of the other Partners as follows:
(a) He is of full age and has full capacity to contract, and if acting in a representative capacity, is duly authorized to execute this Agreement;
(b) He is subscribing for Units for his own account as beneficial owner, for investment purposes only, and not with a view to their subdivision or distribution in a manner that would violate Federal or state securities laws or require registration thereunder, provided that the disposition of his assets shall at all times be within his control.
15.17 Competition: Independent Activities
The General Partners and their respective affiliates, and the Limited Partners and their respective affiliates, may individually or otherwise presently own or hereafter acquire interests in enterprises that compete with the Partnership or may themselves manufacture, design, sell or service products that compete with the Partnership, without having or incurring any obligation to offer any interest in such activities to the Partnership. Nothing contained in this Agreement shall prohibit such competition or give the Partnership or any Partner any interest in the revenues, capital, or profits of such enterprises or activities or give the Partnership any right whatsoever to participate therein or share, in any manner, in the income therefrom.
IN WITNESS WHEREOF, this Amended and Restated Agreement of Limited Partnership has been executed as of this 29 ^th day of January 1988.
c/o Luz Engineering Corporation 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024			CORPORATE GENERAL PARTNERS Luz Partnership Management, Inc. By: /s/ J. F. VERHEY President JAMES F VERHEY
c/o Luz Engineering Corporation 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024			INDIVIDUAL GENERAL PARTNER /s/ PATRICK FRANCOIS Patrick Francois /s/ ARNOLD GOLDMAN Arnold Goldman
			WITHDRAWING GENERAL PARTNER Luz Engineering Corporation By /s/ JOHN A. KENDALL JOHN A. KENDALL SENIOR VICE PRESIDENT
c/o Luz Engineering Corporation 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024			LIMITED PARTNERS: WITHDRAWING ORIGINAL LIMITED PARTNER LUZ DEVELOPMENT & FINANCE CORPORATION By: /s/ J. F. VERHEY James F.Verhey, President
			A & M RECORDS, INC. By Luz Partnership Management, Inc. their Attorney-in-Fact By: /s/ J. F. VERHEY James F.Verhey, President
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VI
POTOMAC CAPITAL INVESTMENT CORPORATION 1020 19th Street N.W. Suite 800 Washington, D.C. 20036			By /s/ DAVID R. OLIVER, JR. Name: David R. Oliver, Jr. Title: Executive Vice President
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VI
CD SEGS VI, INC. 250 West Pratt Street Baltimore, Maryland 21201-2423			By /s/ D. S. PERRY Name: Douglas S. Ferry Title: Assistant Secretary
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VI
FEDERAL NATIONAL MORTGAGE ASSOCIATION 3900 Wisconsin Avenue N.W. Washington, D.C. 20016			By /s/ R. J. MAHN Name: Robert J. Mahn Title: Senior Vice President and Controller
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VI
OREGON NATURAL GAS DEVELOPMENT CORPORATION 220 Northwest 2nd Avenue Portland, Oregon 97209			By /s/ CHARLES E. STINSON Name: Charles E. Stinson Title: Vice President
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VI
IWG CO. 3 206 East Second Street Davenport, Iowa 52801			By /s/ J. C. DECKER Name: John C. Decker Title: Vice President

EXHIBIT A CAPITAL CONTRIBUTIONS, PERCENTAGE INTEREST, NUMBER OF UNITS OWNED AND NAMES OF LIMITED PARTNERS OF LUZ SOLAR PARTNERS LTD. VI, A CALIFORNIA LIMITED PARTNERSHIP
	No. of Units
	Class A	Class B	Capital Contribution	Percentage Interes t
Potomac Capital Investment Corp.		709	$17,725,000	31.3296167'719%
CD Segs VI, Inc.		200	5,000,000	8.8376916141%
IWG Co. 3		200	5,000,000	8.8376916141%
Federal National Mortgage Association		989	24,725,000	43.7023850316%
Oregon Natural Gas Development Corporation		120	3,000,000	5.3026149684%
A & M Records	272		6,800,000	0.9900000000%
General Partners:
Luz Partnership Management Inc.				0.5000000000%
Arnold Goldman				0.2500000000%
Patrick Francois				0.2500000000%
	272	2,218	$62,250,000	100.0000000000%

State of California March Fong Eu Secretary of State
		Form LP-2
AMENDMENT TO CERTIFICATE OF LIMITED PARTNERSHIP IMPORTANT--Read instructions on back before completing this form This Certificate is presented for filing pursuant to Section 15622, California Corporations Code.
1. SECRETARY OF STATE FILE NO. (ORIGINAL CERTIFICATE - FORM LP-1) 8519700047	2. NAME- OF LIMITED PARTNERSHIP LUZ SOLAR PARTNERS LTD., VI, a California Limited Partnership
3. THE CERTIFICATE OF LIMITED PARTNERSHIP IS AMENDED AS FOLLOWS: (COMPLETE APPROPRIATE SUB-SECTION(S) CONTINUE ON SECOND PAGE, IF NECESSARY). A. THE LIMITED PARTNERSHIP NAME IS CHANGED TO:
B. PRINCIPAL EXECUTIVE OFFICE ADDRESS CHANGE: ADDRESS: 41100 Highway 395 CITY: Boron STATE: CA ZIP CODE 93516		E. GENERAL PARTNER NAME CHANGE: OLD NAME: NEW NAME:
C. CALIFORNIA OFFICE ADDRESS CHANGE: ADDRESS: CITY: STATE: CA ZIP CODE:		F. GENERAL PARTNER(S) WITHDRAWN: NAME: NAME:
D. GENERAL PARTNER ADDRESS CHANGE: NAME: KRAMER JUNCTION COMPANY ADDRESS: 41100 Highway 395 CITY: Boron STATE: CA ZIP CODE 93516		G. GENERAL PARTNER ADDED: NAME: ADDRESS: CITY: STATE: ZIP CODE:
H.INFORMATION CONCERNING THE AGENT FOR SERVICE OF PROCESS HAS BEEN CHANGEDTO NAME: ADDRESS: CITY: STATE: CA ZIP CODE:
1.THE NUMBER OF GENERAL PARTNERS REQUIRED TO ACKNOWLEDGE AND FILE CERTIFICATES OF AMENDMENT, DISSOLUTION CONTINUATION AND CANCELLATION IS CHANGED TO: (PLEASE INDICATE NUMBER ONLY		J. OTHER MATTERS TO BE INCLUDED IN THE CERTIFICATE OF LIMITED PARTNERSHIP ARE AMENDED AS INDICATED ON THE ATTACHED PAGES: NUMBER OF PAGES ATTACHED:
4. IT IS HEREBY DELCARED THAT I AM (WE ARE) THE PERSON(S) WHO, EXECUTED THIS AMENDMENT TO THE IDENTIFIED CERTIFICATE OF LIMITED PARTNERSHIP, WHICH EXECUTION IS MY (OUR) ACT AND DEED. (SEE INSTRUCTIONS) _________________________________ ____________________________________ SIGNATURE SIGNATURE _________________________________ ____________________________________ POSITION OR TITLE DATE POSITION OR TITLE DATE KRAMER JUNCTION COMPANY By: /s/ J. McCONOMY SIGNATURE SIGNATURE John McConomy, President 5/10/92 ____________________________________ POSITION OR TITLE DATE POSITION OR TITLE DATE			THIS SPACE FOR FILING OFFICER USE 8519700047 FILED in the office of the Secretary of State of the State of California JUN 3 1992 MARCH FONG EU SECRETARY OF STATE
5. RETURN ACKNOWLEDGEMENT TO: NAME Alan M. Albright, Esq. ADDRESS Dewey Ballantine CITY 333 South Hope Street, 30 ^th Floor STATE Los Angeles, CA 90071 ZIP CODE
SEC/STATE REV. 1/88 FORM LP-2-FILING FEE, $15 Approved by Secretary of State

FIRST AMENDED AND RESTATED

AGREEMENT OF LIMITED

PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., VII,

A CALIFORNIA LIMITED PARTNERSHIP

FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED
PARTNERSHIP OF LUZ SOLAR PARTNERS LTD., VII
a California limited partnership

PARTIES:

LUZ PARTNERSHIP MANAGEMENT, INC., a California corporation, as a Corporate General Partner, LPM VII, Inc., a California corporation, as a Corporate General Partner, Patrick Francois, an individual, as an Individual General Partner, Arnold Goldman, an individual, as an Individual General Partner, Luz Development and Finance Corporation, a California corporation, as the Original Limited Partner, Luz Engineering Corporation, a California corporation, as the Withdrawing General Partner, the Class A Limited Partners and the Class B Limited Partners listed on Exhibit A and all other persons and entities who hereafter may be admitted to the Partnership as general or limited partners.

AGREEMENT:

The parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 For all purposes of this Agreement, unless the context otherwise requires or the term is otherwise defined herein, capitalized terms are used herein with the meanings given in Schedule Y to the Project Participation Agreement.

1.2 " Act " means the California Revised Limited Partnership Act, California Corporations Code, Chapter 3.

1.3 " Affiliate " shall have the meaning given in Schedule Y to the Project Participation Agreement and, in any event, shall include in the case of any General Partner, (x) any corporation or other person or entity with Deemed Utility Status (as defined in Paragraph 9.7) that directly or indirectly holds, owns or controls five percent or more of any class of stock of, or other ownership interest or class thereof in, such General Partner including any securities convertible into, exchangeable for or exercisable to acquire five percent or more of any such class of stock or other ownership interest when aggregated with any of the same so held, owned or controlled (collectively, "Equity Interest"); (y) any corporation or other person or entity with Deemed Utility Status as to which an Equity Interest therein is directly or indirectly held, owned or controlled by such General Partner and (z) any corporation or other person or entity with Deemed Utility Status as to which an Equity Interest therein is directly or indirectly held, owned or controlled by any corporation or other person or entity described in clause (x).

1.4 " Agreement " means this First Amended and Restated Agreement of Limited Partnership, as amended from time to time; "Certificate of Limited Partnership" means the Original Certificate of Limited Partnership as amended from time to time; "Original Certificate of Limited Partnership" means the certificate of limited partnership referred to in Paragraph 2.1.

1.5 " Capital Account " shall have the meaning set forth in Paragraph 12.4.

1.6 " Capital Contribution " means, with respect to any Partner, a contribution by such Partner to the capital of the Partnership.

1.7 " Class A Unit " means a Unit (i) entitling the owner thereof to a 0.00369403% share (computed as set forth in Paragraph 1.22) (0.99% for all Class A Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the. Code, as well as a 0.369402985% share t99% for all Class A Units) of any solar energy tax credit that the Partnership may be entitled to pursuant to the laws of the State of California, and (ii) obligating the owner, thereof to make a Capital Contribution of $25,000 in the form and in the manner provided herein.

1.8 " Class B Unit " means a Unit (i) entitling the owner thereof to a 0.04487637% share (computed as set forth in Paragraph 1.22) (98.01% for all Class B Units) of all income, gain, profits, deductions, losses and distributions and of any United States federal tax credits to which the Partnership may be entitled under the Code, provided that Class B Units are not entitled to any share of any solar energy tax credit to which the Partnership may. be entitled under the laws of California, and (ii) obligating the owner thereof to make a Capital Contribution of $25,000 in the form and in the manner provided herein.

1.9 " Closing Date " means the date on which each Limited Partner (other than the Original Limited Partner) will deliver its Initial Capital Contribution.

1.10 " Code " means the Internal Revenue Code of 1986, as amended from time to time.

1.11 " Common Ownership Percentage " means, at any time, the sum of the Interests (expressed as a percentage) of all Partners that directly or indirectly own or whose Affiliates directly or indirectly own Other Facility Interests (as defined in Paragraph 9.8).

1.12 "Corporate General Partner" means Luz Partnership Management, Inc., a California corporation ("LPM"), LPM VII, Inc., a California corporation ("LPM VII"), and any other corporation admitted as a general partner of the Partnership in place of or in addition to any such corporation, in each case during such period as such entity is a general partner of the Partnership.

1.13 "Early Contribution" means with respect to each Limited Partner the payment in cash of all or a portion of such Limited Partner's Initial Contribution with respect to any Unit acquired which has the effect of reducing the principal amount of the Non-Interest Bearing Note such Limited Partner would otherwise have delivered to the Partnership in respect thereof.

1.14 INTENTIONALLY DELETED

1.15 " Excess Interest " means interest earned on any Early Contribution from the date of such contribution to the earlier of the day before the date the Plant is placed in service or December 15, 1988. In determining the interest income of the Partnership during this period, the Early Contribution shall be deemed to be the last funds expended by the Partnership.

1.16 " Floating Rate Notes " means the nonrecourse notes in a aggregate principal amount of not to exceed $50 million, secured by the Plant and certain of the Partnership's other assets, executed by the Partnership in favor of Prudential Interfunding Corp., a Delaware corporation, as further described in Section 2.01(b) of the Indenture.

1.17 " General Partners " means LPM, LPM VII, Patrick Francois, Arnold Goldman, and all successors or substitute or additional general partners of the Partnership approved pursuant to this Agreement, in each case during such period as such entity or person is a general partner of the Partnership. A "General Partner" shall mean any of the General Partners.

1.18 " Holders " with respect to Units or Interests means those persons or entities which from time to time are shown on the books and records of the Partnership as being owners of Units or Interests, as the case may be, or a fraction thereof, whether or not such persons or entities have been admitted to the Partnership as Limited Partners.

1.19 " Individual General Partner " means Patrick Francois, Arnold Goldman and any other individual admitted as a general partner of the Partnership in place of or in addition to Patrick Francois or Arnold Goldman, in each case during such period as such person is a general partner of the Partnership.

1.20 " Initial Capital Contribution " means with respect to each Limited Partner the amount of cash contributed by such Partner to the capital of the Partnership on the Closing Date together with the principal amount of any Non-Interest Bearing Noted delivered by such Partner to the Partnership on the Closing Date which amount of cash and principal amount shall aggregate $25,000 per Unit for any Class A Unit of such Partner and $25,000 per Unit for any Class B Unit of such Partner.

1.21 " Institutional Lender " means collectively The Prudential Insurance Company of America, a New Jersey mutual insurance company, The CIT Group/Equipment Financing, Inc., a New York corporation, Household Commercial of California, Inc., a California corporation, and Confederation Life Insurance Company, a Canadian mutual insurance company, and their respective successors and assigns.

1.22 " Interest " or " Partnership Interest " means a percentage in the profits and losses of the Partnership. The percentage interest attributable to each Class A Unit is 0.00369403% (computed as follows: 1/268 x .99%), representing in the aggregate a 0.99% Interest. The percentage interest attributable to each Class B Unit is 0.04487637% (computed as follows: 1/2184 x 98.01%), representing in the aggregate a 98.01% Interest. The aggregate Interest of the General Partners is one percent.

The aggregate Interest of the General Partners shall be allocated among the General Partners on the following basis: (i) LPM shall have an Interest of 0.499%; (ii) LPM VII shall have an Interest of 0.001%; (iii) Patrick Francois shall have an Interest of 0.250%; and (iv) Arnold Goldman shall have an Interest of 0.250%. The Interest of a Limited Partner stated as a percentage of all Interests held by Limited Partners shall be the percentage obtained by adding the percentage interest in profits attributable to each Unit owned by such Partner (both Class A Units and/or Class B Units) and dividing said number by 99. The Interest of a Limited Partner stated as a percentage of all Interests held by Partners shall be the percentage obtained by adding the percentage interest attributable to each Unit owned by such Limited Partner (both Class A Units and Class B Units) together.

1.23 " Limited Partners " means the persons or entities admitted to the Partnership at any time and from time to time as Limited Partners and who have not withdrawn from the Partnership. A General Partner may also be admitted as a Limited Partner.

1.24 " Majority of the Limited Partners " means, at the time of any vote, consent or approval by the Limited Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate Units representing more than fifty percent (50%) of the Interests held by the Limited Partners.

1.25 " Managing General Partner " means the General Partner so designated pursuant to Paragraph 6.2, or any successor selected pursuant to Paragraph 10.10.

1.26 " Net Profits " and " Net Loss " means the Partnership's taxable income or loss for a taxable year, determined in accordance with section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be separately stated pursuant to section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

(i) Any income of the Partnership which is exempt from federal income tax shall be added to such taxable income or loss;

(ii) Any expenditures of the Partnership described in section 705(a)(2)(B) of the Code, or treated as section 705(a)(2)(B) expenditures, pursuant to section 1.704-l(b)(2)(iv)(i) of the Treasury Regulations, shall be subtracted from such taxable income or loss; and

(iii) Notwithstanding any other provision of this Paragraph 1.26, the computation of Net Profits and Net Loss shall give proper effect to Paragraphs 7.2 and 7.3. 1.27 "1954 Code" means the Code as amended and in effect immediately before the enactment of the amendments thereto pursuant to the Tax Reform Act of 1986.

1.28 " Ninety-Five Percent of the Limited Partners " means, at the time of any vote, consent or approval by the Limited Partners under the terms of this Agreement, any number of Limited Partners who own in the aggregate a number of Units representing at least ninety-five percent (95%) of the Interests held by the Limited Partners.

1.29 " Non-Interest Bearing Note " means with respect to any Limited Partner the non-interest bearing note of such Limited Partner to be delivered to the Partnership in the principal amount of $25,000 per Unit (less, in any case, the amount of the related Early Contribution, if any), payable in one installment (per Unit) of $25,000 (less, in any case, the amount of the related Early Contribution, if any), on the 15th day of December, 1988, representing a Limited Partner's Capital Contribution which the Managing General Partner may require, on or prior to the Closing Date, to be secured by a letter of credit or other security acceptable to the Managing General Partner. Any Partner desiring to pay cash instead of issuing such a note may do so.

1.30 "Nonrecourse Notes" means those certain nonrecourse notes in the aggregate original principal amount of $55,000,000, secured by the Plant and certain of the Partnership's other assets, to be executed by the Partnership under the Indenture in favor of the Institutional Lender or any note(s) which may be issued in replacement thereof pursuant to the Indenture.

1.31 " Operative Documents " shall be defined as defined in Schedule Y to the Project Participation Agreement.

1.32 " Offering " means the sale of Units in the Partnership at the Closing Date.

1.33 " Opinion of Counsel " means, whenever referred to herein as an Opinion of Counsel acceptable to the Managing General Partner or Limited Partners owning Units representing a specified percentage of Interests, an opinion of LeBoeuf, Lamb, Leiby & MacRae (unless such counsel shall be disapproved by the Managing General Partner or such Limited Partners) or other counsel reasonably acceptable to the General Partner or such Limited Partners, as the case may be, as to matters involving exemptions from certain Federal and state public utility laws provided by the Public Utility Regulatory Policies Act of 1978 ("PURPA") and, with respect to other matters, any counsel reasonably acceptable to the Managing General Partner or such Limited Partners, as the case may be, which opinion in any case shall be in forms, and substance reasonably acceptable to the Managing General Partner or such Limited Partners, as the case may be.

1.34 " Original Limited Partner " means Luz Development and Finance Corporation, a California corporation, the successor to Jane Margolis as Original Limited Partner.

1.35 " Partners " means collectively the General Partners and all Limited Partners, and reference to a Partner shall be to any one of the Partners.

1.36 " Partnership " means the limited partnership created pursuant to the Original Agreement and the Act and continued pursuant to this Agreement and the Act.

1.37 " Permitted Investments " shall mean any or all of the following:

(i) United States Government obligations, including Cash Management Bills, Treasury Bills, Treasury Notes, and Treasury Bonds;

(ii) Indirect obligations of the United States or direct obligations of any instrumentality thereof or of any of the following agencies of the United States Government:

(a) Federal Financing Bank;

(b) Farm Credit System:

(x) Banks for Cooperatives,

(y) Federal Land Banks, and

(z) Federal Intermediate Credit Banks;

(d) Government National Mortgage Association;

(e) Federal Home Loan Banks; and

(f) Student Loan Marketing Association;

(iii) Commercial paper issued by industrial and finance companies (excluding letter of credit commercial paper and bank holding company paper) that bear a "Prime" CP rating (rating of P1) of Moody's Investors Service or a "Prime" CP rating (rating of Al+ or Al) of Standard & Poors; provided that the Partnership will not invest in the commercial paper of any issuer in any amount greater than the lesser of (x) $5,000,000 and (y) an amount equal to 1.5% of such issuer's net worth (as determined under generally accepted accounting principles) if either (i) the long-term debt rating of such issuer is at or below "Aa" of Moody's Investor Service's long-term debt rating (or its, Standard & Poors equivalent) or (ii) such issuer does not have a long-term debt rating by Moody's Investor Service or Standard & Poors; and provided further that no investment may be made in the commercial paper of any finance company in an amount greater than the lesser of (xx ) $1,000,000 and (yy) an amount equal to 5% of the outstanding commercial paper of such finance company; and

(iv) Deposit and money market accounts with national or state chartered banks insured by the Federal Deposit Insurance Corporation and having a Keefe, Bruyette & Woods system rating of "B" or better.

1.38 " Plant " or "Project" or "Facility" shall mean as defined in Schedule Y to the Project Participation Agreement.

1.39 " Project Participation Agreement " means that certain Project Participation Agreement dated as of even date herewith by and among the Partnership, LPM, the Institutional Lenders, LEC, Manufacturers Hanover Trust Company of California, as Indenture Trustee, Disbursement Trustee, Escrow Agent and Escrow Holder, The Prudential Insurance Company of America, as agent, Prudential Interfunding Corp., the initial Class B Limited Partners and certain other parties relative to the purchase by the Class B Limited Partners of their interest in the Partnership and the issuance of the Nonrecourse Notes to the Institutional Lender or its assignee(s) and the issuance of the Floating Rate Notes to Prudential Interfunding Corp.

1.40 " Sixty Percent of the Limited Partners " means, at the time of- any vote, consent or approval by the Limited Partners under the terms of this Agreement, any number of Limited Partners who own in aggregate a number of Units representing at least sixty percent (60%) of the Interests held by the Limited Partners.

1.41 " Subsequent Contribution " means with respect to each Limited Partner the payment in cash of the amount due by such Limited Partner under the Non-Interest Bearing Note issued by such Limited Partner as all or a portion of such Limited Partner's Initial Contribution with respect to any Unit required.

1.42 " Unit " means an ownership interest in the Partnership, which is owned by a Limited Partner. There are two kinds of Units, namely Class A Units and Class B Units. There, are 268 Class A Units and 2184 Class B Units.

1.43 " Utility Ratio " means, at any time, the ratio (expressed as a percentage) of Interests owned by Partners with Deemed Utility Status to Interests owned by all Partners.

1.44 " Withdrawing General Partner " means Luz Engineering Corporation, a California corporation ("LEC").

ARTICLE II.

ORGANIZATION

2.1 Formation . The Withdrawing General Partner and the Original Limited Partner have previously formed the Partnership as a limited partnership by the execution of the original Agreement of Limited Partnership entered into as of July 16, 1985 between LEC and Jane Margolis and the filing of the original Certificate of Limited Partnership under and pursuant to the Act. The original Agreement of Limited Partnership is hereby amended and restated in its entirety and the Partnership is hereby continued, subject to the provisions of this Agreement.

2.2 Certificate of Limited Partnership . The General Partners shall execute, acknowledge and file with the California Secretary of State a Certificate of Amendment to the Original Certificate of Limited Partnership as required by the Act. Any amendment to the Certificate of Limited Partnership may be signed, personally or by an attorney-in-fact, by:

(a) Any General Partner and the new General Partner if the amendment is caused by the admission of a new General Partner;

(b) Any General Partner if a General Partner withdraws or ceases to be a General Partner and the Partnership's business is continued; or

2.3 Name . The name of the Partnership shall be "Luz Solar Partners Ltd., VII, a California limited partnership," and the business of the Partnership shall be conducted under that name.

2.4 Use of Name of Limited Partners . The General Partners shall not make use of the name of any Limited Partner who is not also a general partner in the conduct of the business of the Partnership. The General Partners shall not, except as may be required by law, disclose the name of any Limited Partner without the previous written consent of such Limited Partner, which consent may be withheld in its discretion.

2.5 Term . The Partnership will continue until December 31, 2030, unless sooner terminated as provided herein.

ARTICLE III.

PRINCIPAL EXECUTIVE OFFICE; AGENT

3.1 Offices . The principal executive office of the Partnership shall be located at 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024, or at any other place within the State of California which the General Partners may designate at any time and-from time to time after first giving at least 30 days prior notice to all Limited Partners. The General Partners may establish the principal place or other places of business of the Partnership within the state of California, when the General Partners deem it advantageous to the Partnership.

3.2 Agent for Service of Process . The Agent for Service of Process on the Partnership is John Kendall, whose address is 924 Westwood Boulevard, Suite 1000, Los Angeles, California 90024. The General Partners shall cause to be filed an amendment to the Certificate of Limited Partnership reflecting any change of address of or replacement of the agent for Service of Process within 30 days after its occurrence.

ARTICLE IV.

BUSINESS

4.1 Purpose of Partnership . The Partnership has been formed under the laws of the State of California for the purpose of entering in to a contract for the construction of the Plant, leasing real and personal property in connection therewith, and owning, financing and arranging for the operation and maintenance of the Plant, which will generate electricity for sale to public utility users in accordance with PURPA, as a "qualifying small power production facility" exempt from regulation under certain federal and state laws.

4.2 Activities . The Partnership's activities shall be limited to those in furtherance of the purposes specified in Paragraph 4.1, including:

(a) Entering into the agreements and transactions set forth in Paragraph 8.1 and similar agreements and transactions in substitution or replacement thereof; and

(b) Performing all acts necessary to accomplish such purposes.

ARTICLE V.

ADMISSION OF PARTNERS AND CAPITAL CONTRIBUTIONS

5.1 Capital Contribution of Original Limited Partner . The Original Limited Partner has made a contribution of One Hundred Dollars ($100) in cash to the capital of the Partnership. The Original Limited Partner shall withdraw from the Partnership and such capital contribution will be returned to the Original Limited Partner following the admission to the Partnership of any additional Limited Partner pursuant to Paragraph 5.3, at which time all Partners hereby consent to the Original Limited Partner's withdrawal of its capital contribution and hereby waive and release the Original Limited Partner from any liability and from any right, claim or action that they may have against said Limited Partner for such withdrawal. The Original Limited Partner is not entitled to receive any other amount or payment upon or by reason of the withdrawal of the Original Limited Partner from the Partnership.

5.2 Capital Contribution of General Partners . (a) The Withdrawing General Partner has heretofore made a Capital Contribution of $86,183 in cash to the Partnership. The Withdrawing General Partner hereby withdraws from the Partnership as a partner thereof and hereby transfers and assigns all of its right, title and interest in and to the Partnership (including all right, title and interest of the Withdrawing General Partner in and to its Capital Account) to LPM as a Corporate General Partner, it being understood and agreed that the Withdrawing General Partner shall not retain or have (i) any right to the return of such Capital Contribution, (ii) any interest in or to such Capital Account or in or to profits, losses or distributions of or from the Partnership, (iii) any voting rights in respect of the Partnership, or (iv) any other rights or interests in or with respect to the Partnership. All of the Partners hereby consent to the foregoing withdrawal by the Withdrawing General Partner from the Partnership.

(b) The General Partners other than the Managing General Partner have no fixed obligation to make capital contributions to the Partnership, but the General Partners collectively own a one percent Interest and collectively are entitled to one percent of each item of income, gain, deduction, loss, distribution or credit (including any United States tax credit and the California solar energy credit). LPM shall have an obligation to make and shall be initially credited with Capital Contributions of $618,192 inclusive of any amounts required to be contributed under Section 9.9 of the Project Participation Agreement and any amounts previously contributed by LEC. LPM VII shall have an obligation to make and shall be initially credited with Capital Contributions of $1,000. LPM further agrees that it will restore to the Partnership any negative balance in its Capital Account upon the earlier of: (i) its cessation as a General Partner, or (ii) the liquidation of the Partnership.

5.3 Admission and Capital Contribution of Limited Partners . The General Partners may accept subscriptions, pursuant to the terms of the Offering, for 268 Class A Units and 2184 Class B Units. Capital Contributions with respect thereto shall be as specified in Paragraphs 1.7 and 1.8.

The Capital Contribution of each Limited Partner shall be set forth in Exhibit A to this Agreement and shall be payable in cash or Non-Interest Bearing Notes (or any combination thereof) aggregating $25,000 with respect to each Unit, as set forth in Paragraphs 1.7 and 1.8. The Interest of a Limited Partner in the Partnership shall be the percentage determined in accordance with the last sentence of Paragraph 1.22.

In lieu of executing and delivering a Non-Interest Bearing Note, a Limited Partner may make an Initial Capital Contribution of $25,000 cash per Unit.

Any Units which the Partnership may redeem pursuant to Paragraph 5.9 shall be contemporaneously reissued by it to existing Partners or to third parties that the Managing General Partner may admit as Limited Partners, provided that: (A) the persons on acquiring such Units (i) in the case of Class B Units, make the same representations and warranties as were made by the purchasers of the Class B Units in the Project Participation Agreement or, in the case of the Class A Units, make the same representations and warranties as were made by the purchasers of the Class A Units in the initial subscription documents for such Units; (ii) in the case of the Class B Units, agree to be bound by the provisions of the Project Participation Agreement that are applicable to the Class B Limited Partners or, in the case of the Class A Units, agree to be bound by the provisions of the initial subscription documents that are applicable to the Class A Limited Partners; and (iii) make a cash Capital Contribution of $25,000 per Unit; and (B) the Managing General Partner receives on behalf of the Partnership and the Limited Partners an Opinion of Counsel (which may be obtained at the expense of the Partnership) satisfactory to the Managing General Partner and, as to matters referred to in clause (i) below, Sixty Percent of the Limited Partners (or, in the event that the proposed admission and/or reissuance will result in any increase in the Utility Ratio or the Common Ownership Percentage or the Common Ownership Percentage will be 50% (or such other relevant percentage established by the Federal Energy Regulatory Commission) or greater after giving effect thereto, Ninety-Five Percent of the Limited Partners) to the effect that the admission of such person as a Limited Partner or the reissuance of such Units will not (i) cause the Partnership to lose its exemption from certain federal and state public utility laws provided by PURPA; (ii) dissolve the Partnership, (iii) terminate the Partnership for Federal or California income tax purposes or impair the ability of the Partnership to be treated as a partnership under the federal income tax laws or the income tax laws of the state of California; or (iv) violate any applicable federal or state securities law.

5.4 Interest . Capital Contributions to the Partnership do not accrue interest.

5.5 Limited Liability . Except as provided in Sections 15652 and 15666 of the Act, no Limited Partner who is not also a General Partner shall be bound by, or liable for, the debts, expenses, liabilities, contracts or any other obligations of the Partnership. Limited Partners shall not be required or obligated to lend any funds to the Partnership or to make further capital contributions of any kind whatsoever beyond those described in this Article V.

5.6 Role of Limited Partner . No Limited Partner shall take part in the conduct or control of the business of the Partnership or have any right or authority to act for or bind the Partnership in any manner whatsoever. No vote, consent or approval given by any Limited Partner shall ever be construed to make such Limited Partner liable as a General Partner or to cause such Limited Partner to have any liability beyond that set forth in Paragraph 5.5. No Limited Partner or any Affiliate thereof shall make any loan to the Partnership.

5.7 Withdrawal of Capital Contributions . Except as provided in Paragraphs 5.9 and 9.6, no Limited Partner (other than the Original Limited Partner) shall have the right to withdraw or reduce its contribution to the capital of the Partnership, unless (i) all other Partners consent, (ii) all liabilities of the Partnership (except liabilities to the General Partner and to the Limited Partners on account of the Capital Contributions) have been paid or there remains property of the Partnership sufficient to pay such liabilities, (iii) this Agreement is amended to set forth such withdrawal or reduction, and (iv) such withdrawal or reduction does not result in an Indenture Event of Default. No Limited Partner shall be entitled to receive any distribution except as provided in this Agreement. No Limited Partner shall have the right to demand or receive property other than cash in return for its contribution. No Limited Partner shall have priority over any other Limited Partner, either as to the return of contributed capital or as to any profits, losses or distributions, except as set forth in Paragraph 5.1.

5.8 Indemnification of Limited Partners . The Partnership shall, solely from its assets and without recourse to any General Partner or Limited. Partner, indemnify, defend and hold harmless the Limited Partners from any loss (other than their, Capital Contributions), liability, damage or expense imposed on them related to the ownership of Partnership property or conduct of the Partnership's business other than (i) the repayment of the Interest of a Limited Partner in any distribution whose turn is required pursuant to Sections 15652 and 15666 of the Act; and (ii) taxes imposed on or measured by the net income of such Limited Partners.

5.9 Option to Redeem . In the event that any Limited Partner fails to make any Subsequent Contribution with respect to its Initial Capital Contribution relating to any Unit acquired by such Limited Partner, such Limited Partner (a "Defaulting Limited Partner") hereby grants the Partnership an option (an "Option") on the terms and conditions set forth below and further subject to Paragraphs 5.3 and 8.1(k), to redeem all or any part of the Units of such Limited Partner and to cancel all of its rights hereunder at any time after December 15, 1988, and prior to March 15, 1989.. Any Option is subject to the following terms and conditions:

(a) such Option shall not be effective unless and until such Defaulting Limited Partner has been sent written notice of its failure to pay its Subsequent Contribution when due under the applicable Non-Interest Bearing Note of such Limited Partner and full payment has not been made within five (5) Business Days after the sending of such notice;

(b) subject to the rights, if any, of Prudential Interfunding Corp., or its assignees,. such Option shall be exercised by the Partnership delivering written notice of exercise to such Defaulting Limited Partner together with the return to such Partner of such defaulted Non-Interest Bearing Note ("Defaulted Note") together with any Early Contribution related thereto other than any such Early Contribution or portion thereof which in the sole discretion of the Managing Partner is applied to the purchase of any Units not redeemed or is necessary to be withheld as damages resulting from the failure to pay such Defaulted Note (or, if only a portion of the Units owned by such Defaulting Limited Partner is redeemed, with a further notice specifying that the principal amount of such Defaulted Note has been reduced by the product of $25,000 multiplied by the number of Units with respect to which the Option is being exercised);

(d) such Limited Partner hereby appoints the General Partner its true and lawful attorney in fact to execute any documents required to be executed on its behalf to transfer all or part of its Units to the Partnership pursuant to such Option and the foregoing terms and conditions; and

(e) the Partnership is under no obligation to exercise such Option, and it and/or any of its creditors who may acquire a security interest in, or ownership of, the Non-Interest Bearing Notes, remain free to pursue any other legal or equitable remedies available to them prior to exercise of such Option

5.10 Additional Capital Contributions . (a) With the vote or written consent of at least Sixty Percent of the Limited Partners, the Managing General Partner may from time to time during the term of the Partnership request each Partner to make an additional Capital Contribution, pro rata in accordance with its Interest, in an amount not to exceed in the aggregate for all Partners during the term of the Partnership $5,000,000.

(b) In addition to Capital Contributions described in subparagraph (a), with the vote or written consent of at least Ninety-Five Percent of the Limited Partners, the Managing General Partner may from time to time during the term of the Partnership request each Partner to make Capital Contributions, pro rata in accordance with its Interest, in an amount not to exceed in the aggregate for all Partners an amount approved by such vote or consent.

(c) Upon the failure of any Partner to make an approved additional Capital Contribution described in subparagraphs (a) or (b) above, the other Partners may advance the unpaid amount on behalf of the non-paying Partner, which advance shall constitute a non-recourse loan to and Capital Contribution by such non-paying Partner. In connection with any Capital Contributions under subparagraph (a) or (b) or advance under this subparagraph (c), the Managing General Partner shall contribute an amount equal to one percent of the total amount contributed (including such one percent). In such event, the advancing Partners shall be entitled to receive an amount equal to 100% of the amount so advanced, plus 20% thereof (or, if less, the maximum amount permitted by applicable law), plus interest on the unpaid amount so advanced at an annual rate equal to the discount rate in effect on the 25th day of the preceding month at a Federal Reserve Bank in San Francisco, California plus 5% (or, if less, the maximum rate of interest permitted by applicable law computed in accordance therewith) from the nonpaying Partner's share of distributions hereunder from the Partnership, and the repayment of such advanced amount together with such percentage thereof and such interest thereon shall have priority over any distribution to such nonpaying Partner. Repayment of the amount advanced, plus such percentage thereof, plus such interest thereon, less any cash received by the advancing Partner from the nonpaying Partner's share of distributions as provided herein, shall be and remain nonrecourse to said nonpaying Partner, it being agreed that the sole right of repayment shall be as herein provided.

(d) Notwithstanding the foregoing, no Capital Contributions or advances shall be made pursuant to subparagraphs (a), (b) or (c) above unless the Managing General Partner shall have received on behalf of the Partnership and the Limited Partners an Opinion of Counsel satisfactory to the Managing General Partner and Limited Partners making such Capital Contributions and/or Advances and owning in the aggregate a number of Units representing at least sixty percent (or, in the event that the proposed Capital Contributions 'or advances will result in any increase in the Utility Ratio or the Common Ownership Percentage or the Common Ownership Percentage will be 50% (or such other relevant percentage established by the Federal Energy Regulatory Commission) or greater after giving effect thereto, ninety-five percent) of the Interests held by the Limited Partners making such Capital Contributions and/or advances, to the effect that such Capital Contributions or advances (taking into consideration the resulting effect on distributions) will not cause the Partnership to lose its exemption from certain Federal and state public utility laws provided by PURPA. In connection with the foregoing, the Managing General Partner can modify or change the amount of the Capital Contribution or advance of any Partner or Partners otherwise contemplated by subparagraphs (a), (b) or (c) above with the consent of such Partner or Partners to the extent necessary to enable the delivery of such Opinion of Counsel.

ARTICLE VI.

EXPENSES AND COMPENSATION OF THE GENERAL PARTNERS

6.1 General Expenses . Subject to the limitations set forth in Paragraph 6.2, the General Partners may charge the Partnership and be reimbursed by it for any and all reasonable, ordinary and necessary out-of-pocket expenses actually incurred by them in connection with the performance of the responsibilities of the General Partners to the Partnership and the operation of the Partnership's business but excluding indirect costs and overhead expenses.

6.2 Compensation . LPM shall be the Managing General Partner until it ceases to be a General Partner or a new Managing General Partner is selected pursuant to Paragraph 10.10. The Managing General Partner shall not be reimbursed for the cost of any administrative and management services to the Partnership (as opposed to the Project), but Partnership accounting duties may be delegated to a nationally recognized accounting firm and the fees and expenses of such accountants will be borne by the Partnership. The administrative duties and management of the Partnership may be delegated to any competent entity whether or not it is a Partner, but not to a Limited Partner, provided that the fees and expenses of any such entity shall be borne by the Managing General Partner.

6.3 Loans . If any General Partner loans money to the Partnership, such loan shall bear interest at the prime rate plus one percent (1%) quoted from time to time by the First Interstate Bank of California, or any successor, but never in excess of the maximum rate permitted by applicable law.

ARTICLE VII.

ALLOCATIONS OF NET PROFITS AND NET LOSS; CASH DISTRIBUTIONS

7.1 General Allocations . (a) Except as otherwise provided in Paragraphs 7.2 and 7.3, Net Profits and Net Loss shall be allocated among all Partners, pro rata in accordance with their respective Partnership Interests throughout the year.

(b) Profits and losses shall be determined and specific items of income, gain, loss or credit shall in all events be allocated in the manner necessary to assure compliance with Treasury Regulations Section 1.704-1(b) or any successor provision.

7.2 Other Allocations of Income and Credit Items . (a) All items of California solar energy tax credit shall be allocated 3/4 of 1% to LPM, 1/8 of 1% to Patrick Francois, 1/8 of 1% to Arnold Goldman and 99% to the owners of Class A Units. The portion allocated to the owners of Class A Units shall be divided pro rata in accordance with the number of such Units owned by each on the date the property giving rise to such credit was placed in service.

(b) To the extent the Partnership has interest income with respect to any borrowing from the Partnership by any Partner, whether stated or pursuant to Section 483 or 1271 through 1288 of the Code, such interest income shall be allocated to the Partner to whom such borrowing relates, and such interest shall not constitute a Capital Contribution.

(c) All items of federal investment and energy tax credit shall be allocated among all Partners in accordance with their Interests as of the date the property giving rise to the credit is placed in service.

(d) If the adjusted tax basis of any property that has been placed in service by the Partnership is increased pursuant to Section 48(q) of the Code, such increase shall be allocated among the Partners in the same proportions as the investment tax credit that is recaptured with respect to such property is share among the Partners.

(e) Excess Interest shall be allocated among those Partners who made Early Contributions in proportion to their Early Contributions. Solely for the purposes of this subparagraph, Early Contributions shall be treated as if they were loans by the Partners in question to the Partnership that are forgiven on December 15, 1988 in fulfillment of their obligation to make a total capital contribution of $25,000 per Unit.

7.3 Additional Allocations of Items of Expense and Loss. (a) Federal income tax deductions for depreciation allowed under Section 168 of the Code (or the 1954 Code, as appropriate) ("depreciation deductions") shall be allocated among the Partners in accordance with their Interests from and after the date that the property giving rise to such deductions is placed in service, unless regulations are promulgated by the Internal Revenue Service that require that depreciation deductions be applied ratably throughout the taxable year, in which case such deductions shall be specially allocated entirely to new or transferee Partners as of the date of their admission until the cumulative allocations to all Partners equal those that would have been made had such regulations not been promulgated, if permitted under Section 704(b) of the Code and the Treasury Regulations promulgated pursuant thereto.

(b) Any reduction in the adjusted tax basis of Partnership property pursuant to Section 48(q) of the Code shall be allocated among the Partners in accordance with their Interests in the same proportion as the basis of the Property is allocated under Treasury Regulations Section 1.46-3(f)(2)(i).

7.4 Other Allocation Rules . (a) Net Profit and Net Loss shall be computed according to the accrual method of accounting for federal income tax purposes and otherwise in accordance with generally accepted accounting principles applied in a consistent manner.

(b) The Partnership shall use the interim closing of the books method of accounting upon the admission of a new or transferee Partner or the increase, decrease or termination of a Partner's Interest.

(c) Except as otherwise provided in this Agreement, whenever a proportionate part of the Partnership Net Profit or Net Loss is credited or charged to a Partner's Capital Account, every item of income, gain, loss or deduction entering into the computation of such Net Profit and Net Loss shall be considered credited or charged, as the case may be, and every item of credit or tax preference applicable to the period during which such profit or loss was realized shall be allocated but not credited or charged, to such account in the same proportion.

7.5 Distributions . (a) The Partnership may, subject to the provisions of Section 5.19 of the Project Participation Agreement, from time to time, in the sole discretion of the General Partners, distribute cash disbursed to it under the Disbursement Agreement or received as Excluded Payments or other cash to the extent not prohibited by any Operative Document to the Partners in proportion to their Partnership Interests. In addition, no later than February 15, 1989 (or such later date as the Partnership shall first be permitted to make such distribution under the Operative Documents), the General-Partners shall distribute the Excess Interest to those Partners entitled thereto due to their making an Early Contribution.

(b) Distributions of Partnership assets in respect of Interests shall be made only to the Persons who, according to the books and records of the Partnership, are the record Holders of Interests on the date determined by the General Partners as of which Holders of Interests are entitled to any distribution. The General Partners and the Partnership shall bear no liability for making distributions to the wrong person provided such distributions are made in accordance with the provisions of the preceding sentence.

(c) All amounts withheld pursuant to the Code or any provision of the laws of any taxing jurisdiction with respect to any payment or distribution to the Partnership or to the Partners shall be treated as amounts distributed to the respective Partners on whose account the withholding was imposed for all purposes under this Agreement.

ARTICLE VIII.

RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNERS

8.1 Powers . Subject to the provisions of Paragraphs 8.2 and 8.3, the management and control of the Partnership and its business and affairs shall rest exclusively with the Managing General Partner, who shall have all the rights and powers which may be possessed by a General Partner pursuant to the Act and such rights and powers as are otherwise conferred by law or are necessary, advisable or convenient to the discharge of its duties under this Agreement and to the management of the business affairs of the Partnership in furtherance of the purposes of the Partnership as set forth in Paragraph 4.1. In the event of any disagreement among the General Partners, the decision of the Managing General- Partner shall prevail. Without limiting the generality of the foregoing but subject to the provisions of Paragraphs 8.2 and 8.3, the Managing General Partner shall have the rights and powers to do those things set forth below (which subject to Article VI may be exercised at the cost and expense of the Partnership) but only to the extent in the furtherance of the purposes of the Partnership as set forth in Paragraph 4.1:

(a) Expend the capital and income of the Partnership in furtherance of the Partnership's business to optimize the economic yield to the Partners.

(b) Perform all acts necessary to commence and operate the Partnership's business and in connection therewith to hold, manage, operate, exploit, acquire and sell assets acquired in connection therewith, to enter into contracts for services, and contracts, as, when, if and under such terms and conditions as the Managing General Partner, in its sole discretion, shall deem advisable.

(c) Execute and deliver'- any deed, bill of sale, mortgage, license, or sublicense, contract for sale, agreement for deed, or other document conveying the interest of the Partnership in any of its assets, or any part thereof, whether held in its name or otherwise and, without limiting the foregoing, shall be expressly authorized to enter into and perform on the Partnership's behalf the Operative Documents to which the Partnership is a party, including the Project Participation Agreement, the Nonrecourse Notes, the Floating Rate Notes, the Indenture, the Security Documents, the Technical Services Agreement, the O&M Agreement, the Construction Management Agreement, the Project Management Agreement, the EPC Contract, the Ground Lease and any and all documents or agreements related thereto or contemplated thereby.

(d) Cause or allow the legal title to, or any legal or equitable interest in, the assets of the Partnership to be kept in the Partnership's name.

(e) Borrow or raise monies on behalf of the Partnership, in the Partnership's name, in an amount in the aggregate outstanding at any one time not to exceed $1,000,000 and in connection therewith and from time to time draw, make, accept, endorse, execute and issue promissory notes, drafts, mortgages and other negotiable or non-negotiable instruments and evidences of indebtedness, and secure the payment thereof and of the interest thereon by mortgage or pledge, conveyance or assignment in trust, of the whole or any part of the assets of the Partnership, including contract rights; provided, however , that a creditor who makes a nonrecourse loan to the Partnership must not have or acquire, at any time as a result of making that loan, any direct or indirect interest in the profit, capital, or property of the Partnership other than as a creditor whose recourse is limited to the specified security, and provided further that the $1,000,000 limit set forth above shall not apply to loans made to the Partnership by the General Partners to enable the Partnership to comply with the express provisions of any Operative Document or any loan made to the Partnership by LEC pursuant to Section 5.6 of the O&M Agreement, and that the limitations set forth in this subparagraph (e) shall not apply to either the Nonrecourse Notes or the Floating Rate Notes.

(f) Engage, retain, or employ, on behalf of the Partnership, such persons, firms or corporations, including the Project Manager under the Project Management Agreement and the Operator under the O&M Agreement, as the General Partners, in their sole discretion, shall deem advisable for the operation and management of the business of the Partnership (including accountants and lawyers) on commercially reasonable terms.

(g) Possess, exercise or refrain from exercising all other rights and powers of a General Partner under the Act.

(h) Expend the funds of the Partnership for the payment of premiums on insurance policies of any kind, nature, and description, but excluding any insurance protecting the General Partners from liabilities or 'claims relating to the breach of their fiduciary duties to the Partners or negligence.

(i) Enter into contracts, joint ventures, or other transactions on behalf of the Partnership with Limited Partners, subject to the limitations contained in the Act with respect to the preservation of limited liability of such Limited Partners and subject to Paragraph 8.3.

(j) Admit persons as Limited Partners of the Partnership upon their contribution of the amount specified in Article V or their compliance with the provisions of Article IX.

(k) Redeem any Units of any Defaulting Limited Partner provided that a like number of Units is contemporaneously reissued pursuant to Paragraph 5.3.

8.2 Duties . The General Partners shall manage and control the Partnership's business and affairs and carry out the business of the Partnership according to their best efforts. The General Partners shall devote such time to the business of the Partnership as the General Partners, in their sole discretion, determine to be necessary and appropriate; provided, however, that:

(a) the Managing General Partner will take, or cause to be taken, all steps necessary to operate the Plant in such a manner that the Partnership will have fully available to it the Investment Tax Credit, the Energy Tax Credit, Equipment ACRS Deductions, Improvements ACRS Deductions, Supplemental Equipment ACRS Deductions and all other tax benefits available under the Code, from time to time, and corresponding California income tax benefits, including, but not limited to the California Solar Energy Tax Credit, with no recapture of any regular investment tax credit or energy investment tax credit;

(b) the General Partners will keep accurate records of the revenues and expenses of the Partnership and will submit reports and other documents required by Article XII to the Partners within the time periods allowed therein;

(c) the Managing General Partner will locate and hire, either on behalf of the Partnership or directly on its own behalf or through subcontractors to the Partnership all personnel to operate the Plant and all administrative and supervisory personnel for the Plant;

(d) the General Partners shall distribute, subject to any limitations contained in any Operative Document, to the Partners at least quarterly all Partnership cash in excess of its needs for debt service, operating and maintenance expenses and a reasonable reserve for emergencies;

(e) upon failure of the prompt payment by Luz Israel of all amounts due as set forth in a Warranty Certificate, the General Partners shall cause a vote of the Limited Partners, within 30 days of delivery of such Warranty Certificate, with respect to any action to be taken by the Partnership with respect to a draw under the Performance Warranty Letter of Credit or Cermet Letter of Credit, and shall cause the Disbursement Trustee to make a draw under the Performance Warranty Letter of Credit and/or the Cermet Letter of Credit if a Majority of the Limited Partners so vote, provided, however, that with respect to any amount due with respect to the calendar year 1999, the Managing General Partner shall cause the Disbursement Trustee to make a draw under the Performance Letter of Credit and/or the Cermet Letter of Credit in an amount equal to the lesser of: (x) the amount set forth in the Warranty Certificate; and (y) the then principal amount of the Performance Warranty Letter of Credit and/or the Cermet Letter of Credit;

(f) the Managing General Partner shall comply with the terms of the Sections 5.7(a) and (b) and 5.15(a) of the Project Participation Agreement at all times with the same force and effect as if the Limited Partners were Nonrecourse Noteholders;

(g) the Managing General Partner shall comply with the terms of Sections 5.7(f)(iv), and (j), and 5.15(b) through (g) of the Project Participation Agreement at all times with the same force and effect as if the Limited Partners were Nonrecourse Noteholders and as if the Nonrecourse Notes were outstanding;

(h) the Managing General Partner shall advise each Limited Partner of all documents provided pursuant to Section 5.16 of the Project Participation Agreement and shall provide copes of the same to any Limited Partner who requests the same; and

(i) the Managing General Partner shall deliver such additional information and documents as shall be reasonably requested by any Limited Partner.

8.3 Certain Limitations . (a) Except as otherwise provided in Paragraph 8.4, the General Partners shall not do any of the following without the consent of Sixty Percent of the Limited Partners (and, in the case of clauses (B) and (C) of subparagraph (v) below, without the delivery to the Class B Limited Partners of an appraisal with respect to any contract referred to therein):

(i) Confess a judgment against the Partnership;

(ii) Sell, exchange, lease, mortgage, pledge, or otherwise transfer all or any substantial part of the assets of the Partnership except as permitted by Paragraph 8.1(e) or as may be required to secure the Nonrecourse Notes or the Floating Rate Notes as contemplated by the Security Documents, the Indenture and the Project Participation Agreement;

(iii) Suffer indebtedness by the Partnership other than in the ordinary course of its business and as specifically permitted by Paragraph 8.1(e);

(iv) Make or permit any substantial modification to the EPC Contract;

(v) Take or authorize any of the following actions, each of which involves an actual or potential conflict of interest with the Partnership: (A) any termination, cancellation, waiver, amendment or modification in any significant respect of any Operative Document or any contract entered into pursuant to (B) below; (B) entering into by the Partnership of any contract in which any General Partner or Affiliate thereof or any officers, directors of any thereof is a party or has a material interest; (C) entering into by the Partnership of any contract in which any Limited Partner or Affiliate thereof is a party or has any material interest and in which the payments thereunder or the cost of performance thereunder by the Partnership exceeds $500,000 in the aggregate; or (D) take any action which pursuant to the terms of Section 4.3 of the Project Management Agreement requires the approval of the Partnership;

(vi) Unless sixty (60) days prior notice shall have been given to each Limited Partner, enter into any contract (other than those in effect as of the Closing Date or otherwise expressly authorized by this Agreement) requiring the expenditure of more than one million dollars annually by the Partnership (except where such expenditure is required to avert an emergency or to meet other extraordinary circumstances where such prior notice is impracticable);

(vii) Make any optional prepayment of any Nonrecourse Notes; or

(viii) Consent to any action or event contemplated to be consented to by the Partnership in Section 6.9 of the Project Participation Agreement.

(b) The General Partners shall not do any of the following without the consent of a Majority of the Limited Partners (except as provided in Paragraph 8.2(e)) and shall do the following upon the direction of a Majority of the Limited Partners:

(i) Cause the Disbursement Trustee to make a draw under the Performance Warranty Letter of Credit or the Cermet Letter of Credit; or

(ii) Take any other action pursuant to Section 17 of the Performance Warranty.

(c) The General Partners shall not take or permit the Partnership to take any action which by the terms of any Operative Document requires the vote, approval or consent of Limited Partners or Class B Limited Partners, as the case may be, without obtaining the requisite vote, approval or consent referred to therein, which rights of vote, approval or consent are incorporated herein by reference.

8.4 Actions with Respect to Performance Warranty Letter of Credit and Cermet Letter of Credit . (a) In the event that the Lenders, as permitted by Section 4.04(b) the Disbursement Agreement, desire to approve a substitute Performance Warranty Letter of Credit Bank or substitute Cermet Letter of Credit Bank that does not meet the standard set forth in the Section 4.04(b) of the Disbursement Agreement (a "Change"), then the General Partners shall not consent to any such Change on behalf of the Partnership unless either:

(1) Each Limited Partner has been mailed notice of such proposed Change and Limited Partners owning Interests comprising more than five percent (5%) of all Interests owned by Limited Partners have not delivered written notice of their objection to the Change within 30 days of the mailing or other delivery of such notice; or

(2) Whether or not the notice of such an objection is received, the Change has been approved by the vote or written consent of Sixty Percent of the Limited Partners.

(b) In the event that LIL, as permitted by Section 4.04(c) of the Disbursement Agreement, requests a change in the Performance Warranty Letter of Credit Bank or the Cermet Letter of Credit Bank, and the proposed new Performance Warranty Letter of Credit Bank or proposed new Cermet Letter of Credit Bank does not meet the standard set forth in Section 4.04(c) of the Disbursement Agreement, then the General Partners shall not consent to any such change on behalf of the Partnership unless each Limited Partner has been mailed or otherwise delivered notice of such proposed Change and such proposed Change has been approved by the vote or written consent of Sixty Percent of the Limited Partners.

ARTICLE IX

CONVEYANCE OF INTERESTS IN THE PARTNERSHIP

9.1 General Provision . Partners may not sell, transfer, assign or subject to a security interest all or any part of their Units or, with respect to any General Partner, other interests in the Partnership and no Person shall become an assignee or be admitted to the Partnership as a substitute or additional Partner except as permitted in this Article IX, Article X, Paragraph 5.3 (last paragraph), or Paragraph 12.10(b), and any sale, transfer, assignment, grant of a security interest or other act in contravention of this Article IX shall be null and void ab initio. In no event may any Limited Partner transfer less than whole Units unless such fractional unit: (i) represents part of the transfer of all of its Units; or (ii) is created by reason of divorce or death (whether by reason of the termination of a trust, or the provisions of a will or the laws of intestate succession).

9.2 Limited Partners . No Limited Partners may sell, transfer, assign, or subject to a security interest any or all of the Units owned by it, except with the consent of the Managing General Partner (which will not be unreasonably withheld provided, however , that the Managing General Partner shall give such consent with respect to any transferee of a Class B Limited Partner that has transferred its Interests in accordance with the provisions of Paragraph 9.7) and provided, that:

(a) Such sale, transfer or assignment, when aggregated with any prior sales, transfer or assignments of Partnership interests, does not result in a sale or exchange within a 12-month period of 50 percent or more of the total interests in the Partnership's capital and profits within the meaning, and for purposes of, Section 708(b) of the Code (or any comparable provision of California law) or otherwise terminate the Partnership for Federal or California income tax purposes;

(b) Such Limited Partner and the respective purchaser, transferee, assignee or holder of a security interest each executes, acknowledges, and delivers to the General Partners such instruments of transfer and assignment with respect to such transactions as are satisfactory in form and substance to the Managing General Partner;

(c) Such Limited Partner furnishes to the General Partner on behalf of the Partnership and the Limited Partners an Opinion of Counsel satisfactory to the Managing General Partner and, as to the matters referred to in clause (iv) below, Sixty Percent of the Limited Partners (or, in the event that the proposed sale, transfer or assignment and any related admission of the transferee or assignee as a Partner will result in an increase in the Utility Ratio or the Common Ownership Percentage, or the Common Ownership Percentage will be 50% (or such other relevant percentage established by the Federal Energy Regulatory Commission) or greater after giving effect thereto, Ninety-Five Percent of the Limited Partners) to the effect that: (i) such sale, transfer, or assignment will not dissolve the Partnership; (ii) terminate the Partnership for Federal or California income tax purposes or impair the ability of the Partnership to be treated as a partnership under applicable income tax laws; (iii) such sale, transfer, or assignment will not violate any applicable Federal or state securities law; (iv) such sale, transfer, or assignment and any related admission of the transferee or assignee as a Partner will not cause the Partnership to lose its exemption from certain Federal and state public utility laws provided by PURPA; and (v) such sale, transfer or assignment will not cause adverse tax consequences (including without limitation investment tax credit recapture) to the Partnership or any other Partner;

(d) The Partnership is paid a reasonable transfer fee which is sufficient to pay actual and reasonable costs and expenses of the Partnership in connection with such transactions;

(e) (i) The purchaser, transferee, or assignee represents in writing that the Units are being acquired for such person's own account for long term investment and not with a view toward resale, fractionalization, division, or distribution thereof in a manner that would violate Federal or state securities laws or require registration thereunder; and (ii) in the case of a holder of a security interest, such holder will not permit foreclosure of such security interests unless the purchaser, assignee or other transferee upon foreclosure makes the representations set forth in clause (i) above and unless the transactions and/or the purchaser at such foreclosure sale complies with the requirements of subparagraphs (a), (b), (c), (d) and (e) (i) of this Paragraph 9.2; and

(f) Such purchaser, transferee, assignee, or holder of such security interest (or any person who acquires such Units upon foreclosure of such security interest) shall not become a Limited Partner unless the Managing General Partner consents in writing to such person becoming a Limited-Partner, which consent may be given or withheld in the sole discretion of the Managing General Partner; provided, however, that the Managing General Partner shall give such consent with respect to any transferee of a Class B Limited Partner that has transferred its Units in accordance with the provisions of Paragraph 9.7. Any such purchaser, transferee, assignee, or holder of- such security interest (or any person who acquires such Units upon foreclosure of such security interest) who is not admitted as a Limited Partner shall be entitled, to the extent assigned, only to the profits, losses and distributions to which the assigning Limited Partner would have been entitled and shall not be entitled to any of the other rights as Limited Partner, including, without limitation, any right to: (i) vote on any Partnership matter, (ii) require any information or accounting from the Partnership, (iii) inspect the Partnership's books and records, or (iv) make or approve any Partnership decision or otherwise participate in the management of the Partnership. The assigning Limited Partner shall remain a Limited Partner until such time, if any, that the Managing General Partner consents to the assignee becoming a Limited Partner and the provisions of Paragraph 9.3 are otherwise complied with and, in such event, the assigning Limited Partner, for purposes of the definitions of Majority of the Limited Partners, Sixty Percent of the Limited Partners and Ninety-Five Percent of the Limited Partners, as set forth herein, and for purposes of Paragraph 8.4(a)(1), shall be deemed to continue to own the Units assigned by such assigning Limited Partner until the assignee thereof is admitted as a Limited Partner.

9.3 Admission as Limited Partner . If the Managing General Partner consents to the admission as a Limited Partner of a purchaser, transferee or assignee permitted by Paragraph 9.2, and such purchaser, transferee or assignee (a) elects to become a Limited Partner by delivering a written notice of such election to the Managing General Partner, (b) executes and acknowledges such other instruments as the Managing General Partner may deem necessary, required, or advisable to effect the admission of such person as a Limited Partner, including without limitation the written acceptance and adoption by such person of the provisions of this Agreement, and (c) pays a reasonable transfer fee to the Partnership which is sufficient to cover all actual and reasonable expenses in connection with the admission of such person as a Limited Partner, then, all steps shall be taken which, in the opinion of the Managing General Partner, are reasonably necessary to admit such person under the Act as a Limited Partner, and such person shall thereupon become a Limited Partner.

9.4 Purchase of Interests by the General Partners . Except with the consent of Ninety-Five Percent of the Limited Partners, no General Partner shall be permitted to acquire any portion of the Units of any Limited Partner or any portion of the interest of any other General Partner.

9.5 Death or Dissolution of a Class A Limited Partner or Other Holder or Spouse Thereof . Upon the death or dissolution of a Class A Limited Partner or other Holder of Class A Unit's', such Limited Partner's or Holder's estate, devisee, heirs and/or 'transferees shall succeed to its Units and .shall be bound by the terms and provisions of this Agreement. However, in. the event that any Unit of the deceased or dissolved Class A Limited Partner or other Holder of Class A Units or the spouse thereof does not pass to a single trust or passes to more than one heir, devisee or transferee, or, upon termination of any such trust, is distributed to more than one beneficiary, then, in that event, all such heirs, devisees, transferees and/or beneficiaries ("Distributees ") shall, within ninety (90) days after distribution by the estate of the deceased Limited Partner or other Holder of Class A Units or by the representative of the Limited Partner so dissolved, execute and deliver to the General Partners a written instrument (including a power of attorney) appointing one person, firm or corporation as and to be the agent ("Agent") of and for the Distributees. The Agent shall be responsible for collecting, receiving and making all payments and contributions required hereunder, shall vote all Units of such Distributees entitled to vote, and shall perform all other obligations of such Distributees performable by reason of or arising from such Units, and any and all payments and/or disbursements due such Distributees for or arising from such Units shall be deemed to have been validly made to such Distributees by paying the same to the Agent. In the event that any such Distributees for any reason fail' to designate an Agent in writing in the manner and within the time prescribed above and continue to fail to cure such default after ten (10) days written notice from the General Partners or any of them to correct the same, the General Partners shall have the right, at their election, to withhold all sums that are payable with respect to the Units of such Distributees until such time as the Partnership is dissolved or such default is cured. Upon the death of the spouse of a Class A Limited Partner or other Holder of Class A Units having a community property interest in any Units, the foregoing provisions of this Paragraph 9.5 shall apply to all of the deceased spouse's community property interest in the surviving spouse's Units in the Partnership which does not pass to the surviving spouse by will or through operation of law, and such provisions shall be applied to such Units as though the Limited Partner or other Holder of Class A Units had owned such Units and had died on the date of such Class A Limited Partner's spouse's death leaving such Units to the actual recipients thereof.

9.6 Voluntary Withdrawal by Limited Partner . If at any time during the term of the Partnership, any Limited Partner or any Affiliate of any Limited Partner, by reason of its interest in the Partnership or any transaction contemplated by this Agreement or the Project Participation Agreement, shall be deemed by any governmental authority having jurisdiction to have Deemed Utility Status (as defined in Paragraph 9.7, but without regard to any exemptions relating to the percentage of voting interests held by it set forth in the Public Utility Holding Company Act of 1935) then, upon demand made by such Limited Partner to the Managing General Partner, the Partnership shall forthwith purchase and such Limited Partner shall forthwith sell to the Partnership, all right, title and interest in the Units of such Limited Partner in the Partnership for a price equal to the present value as of the date of purchase and sale of all future distributions to such Limited Partner of income and capital (as projected in good faith by the Managing General Partner), as determined by a firm of independent accountants based on the following assumptions:

(i) A discount rate of 11 percent per annum;

(ii) the sale of all of the assets of the Partnership at the termination of the Partnership.

The purchase price as so determined shall bear interest from the date of sale at the rate of 11 per cent per annum compounded annually (or, if less, the maximum rate permitted by law and computed in accordance therewith) and shall be deferred by such Limited Partner and paid by the Partnership, at the times it is otherwise permitted to distribute to Partners, in installments equal to the amount of income and capital that the Partnership would have distributed to such Limited Partner had it not sold its Units, including any amounts that would have been distributed to such Limited Partner upon the liquidation of the Partnership. Any amount of such purchase price or interest remaining upon the liquidation of the Partnership and payment of such income and capital to such Limited Partners shall be extinguished.

9.7 Non-Utility Status . (a) If at any time after the closing described in Section 2.2 of the Project Participation Agreement (the "Closing") and during the term of the Partnership (A) any Limited Partner shall for any reason (other than by reason of its interest in the Partnership or any transaction contemplated by this Agreement or the Project Participation Agreement) be deemed to be an "electric utility" or an "electric utility holding company" as such terms are used in PURPA and the regulations thereunder (18 CFR Part 292), or any wholly or partially-owned direct or indirect subsidiary of any "electric utility" or "electric utility holding company", as such terms are so used, or any similar entity (including without limitation a "public utility" as such term is defined in the Federal Power Act, or a "holding company," a "subsidiary company," an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company" as such terms are defined in the Public Utility Holding Company Act of 1935) subject to regulation under the Federal Power Act, the Public Utility Holding Company Act of 1935, as amended, the California Public Utility Law or 'any other comparable Federal, state or local law or regulation (any such event, a "Deemed Utility Status"), and (B) such Limited Partner shall acquire, directly or indirectly, additional Units in the Partnership and/or such Limited Partner shall have first acquired such Deemed Utility Status after the Closing, such Limited Partner shall immediately (i) give notice thereof to the Managing General Partner and each Class B Limited Partner, and (ii) cause all Units in the Partnership owned by such Limited Partner to be transferred in accordance with the .terms of Paragraph 9.2, whether at their fair market value or otherwise, to a transferee that (x) does not have Deemed Utility Status and would not acquire Deemed Utility Status as a result of such transfer, and (y) agrees to comply with the provisions of Paragraph 9.3; provided, however , that no such Limited Partner shall be required to cause the transfer of such Units, or to cause the transfer of a greater percentage of Units than would enable delivery of the opinion described immediately hereafter, if such Limited Partner shall have provided to the Managing General Partner on behalf of the Partnership and the Limited Partners an Opinion of Counsel acceptable to the Managing General Partner and Ninety-Five Percent of the Limited Partners (or, in the event that the acquisition of such additional Units will not increase the Utility Ratio or the Common Ownership Percentage and the Common Ownership Percentage will be less than 50% (or such other relevant percentage established by the Federal Energy Regulatory Commission) after giving effect thereto, Sixty Percent of the Limited Partners) to the effect that such additional Units or such Deemed Utility Status (1) will not cause the General Partners or any other Limited Partner or the Partnership to have Deemed Utility Status, and/or (2) will not cause the status of the Facility as a "qualifying small power production facility" under PURPA and the regulations thereunder to be adversely affected.

(b) If at any time after the Closing and during the term of the Partnership, any General Partner or any Affiliate thereof shall acquire any Units or additional Units or any owner or holder of any direct or indirect ownership or equity interest in such General Partner, which owner or holder has Deemed Utility Status, shall increase such ownership or equity interest, such General Partner shall immediately (i) give notice thereof to each Class B Limited Partner and (ii) promptly deliver to the Partnership on behalf of the Limited Partners an Opinion of Counsel acceptable to Ninety-Five Percent of the Limited Partners to the effect that such additional Units or increased ownership or equity interest will not cause the status of the Facility as a "qualifying small power production facility" under PURPA and the regulations thereunder to be adversely affected and, in the event such opinion is otherwise not obtainable, promptly take such action (without limiting its other obligations hereunder) as shall enable such Opinion of Counsel to be so delivered.

9.8 Ownership Aggregation . (a) For purposes thereof, (i) "Other Facility" means any "electric generating facility", located within one mile (or such other distance as may be established by the Federal Energy Regulatory Commission pursuant to PURPA as appropriate for determining whether facilities are on the same site) of the Facility, and (ii) "Other Facility Interests" mean any direct or indirect interest in any Other Facility used for purposes of determining ownership of such Other Facility for purposes of determining whether such Other Facility is a "qualifying small power production facility" as defined by PURPA.

(b) If at any time after the Closing any Partner or Affiliate thereof shall acquire, directly or indirectly, any new or additional Other Facility Interests not owned by such Partner or any Affiliate thereof as of the Closing, such Partner shall immediately (i) give notice thereof to the Managing General Partner and each Class B Limited Partner and (ii) cause such new or additional Other Facility Interests to be terminated or to be transferred or otherwise disposed of, whether at their fair market value or otherwise, to one or more transferees that are not Partners or Affiliates thereof; provided, however , that no such Partner or Affiliate thereof shall be required to terminate, transfer or otherwise dispose of such Other Facility Interests or a greater percentage thereof than would enable delivery of the opinion described immediately hereafter, if such Partner or Affiliate thereof shall have provided to the Managing General Partner on behalf of the Partnership and the Limited Partners an Opinion of Counsel acceptable to the Managing General Partner and Ninety-Five Percent of the Limited Partners (or, in the event that the acquisition of such Other Facility Interests will not increase the Common Ownership Percentage or the Common Ownership Percentage and the Common Ownership Percentage shall be less than 50% (or such other relevant percentage established by the Federal Energy Regulatory Commission) after giving effect thereto, Sixty Percent of the Limited Partners) to the effect that such new or additional Other Facility Interests will not cause the status of the Facility as a "qualifying small power production facility" under PURPA and the regulations thereunder to be adversely affected.

ARTICLE X

WITHDRAWAL OR REMOVAL OF A GENERAL PARTNER;
ELECTION OF A GENERAL PARTNER

10.1 Resignation of, Withdrawal of, or Assignment by a General Partner . Except as contemplated in Paragraph 5.2(a) with respect to the Withdrawing General Partner, the General Partners shall not have the right to withdraw their interests in or resign or withdraw from the Partnership. No Corporate General Partner shall dissolve or file a certificate of dissolution or its equivalent. Except as contemplated in Paragraph 5.2(a) with respect to the Withdrawing General Partner, the General Partners may not sell, transfer, assign, or subject to a security interest all or any part of their interests to any person, or admit any person as substitute General Partners.

10.2 Removal of a General Partner . A General Partner shall be removed as a General Partner of the Partnership with or without cause effective as of the date referred to in Paragraph 10.3 upon the vote or written consent of a Majority of the Limited Partners to remove; provided, however , such removal shall not eliminate any then existing obligations of the Partnership to such General Partner or such General Partner to the Limited Partners or the Partnership.

10.3 Notice of Removal . Written notice of the removal of a General Partner shall be given by the Partners voting to remove such General Partner pursuant to Paragraph 10.2, to such General Partner and to all other Partners. Such notice shall set forth the day upon which the removal is to become effective.

10.4 Termination of a General Partner . A General Partner shall cease to be a General Partner of the Partnership upon the happening of any of the following events:

(a) Such General Partner is removed as a General Partner as provided in Paragraph 10.2 or, in violation of Paragraph 10.1, such General Partner withdraws from the Partnership;

(b) An order for relief against such General Partner is entered under Chapter 7 of the Federal bankruptcy law, or such General Partner: (i) makes a general assignment for the benefit of creditors, (ii) files a voluntary petition under the Federal bankruptcy law, (iii) files a petition or answer seeking for that General Partner any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law, or regulation, (iv) files an answer or other pleading admitting or failing to contest material allegations of a petition filed against that General Partner in any proceeding of this nature or (v) seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of such General Partner or of all or any substantial part of such General Partner's properties;

(c) Sixty (60) days after the commencement of any proceeding against such General Partner seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or within sixty (60) days after the appointment without such General Partner's consent or acquiescence of a trustee, receiver, or liquidator of such General Partner or all or any substantial part of such General Partner's properties, the appointment is not vacated o; stayed, or within 60 days after the expiration of any such stay, the appointment is not vacated;

(d) In the case of an Individual General Partner either of the following: (i) the death of such Individual General Partner, or (ii) the entering by a court of competent jurisdiction of an order adjudicating such Individual General Partner incompetent to manage his or her person or estate;

(e) In the case of a Corporate General Partner, the filing of certificate of dissolution, or its equivalent, for such Corporate General Partner in violation of Paragraph 10.1; or

(f) Any other event specified in the Act.

10.5 Liability of General Partner after Termination . Upon a General Partner's ceasing to be a General Partner in accordance with the provisions of the Agreement, such former General Partner shall no longer be personally liable for Partnership debts incurred after such cessation, except as otherwise provided in the Act. The remaining General Partners shall amend the Certificate of Limited Partnership to reflect that such former General Partner is no longer a General Partner of the Partnership.

10.6 Compensation of General Partner Upon Termination . Upon a General Partner ceasing to be a General Partner in accordance with the provisions of this Agreement, (i) at the election of any successor or substitute General Partner approved pursuant to Paragraph 10.7 or 10.8, within 90 days after such General Partner ceases to be a General Partner, such General Partner's interest as a General Partner in the Partnership shall be sold to such successor or substitute General Partner for any amount in cash equal to the fair market value thereof as of the effective date of such cessation, determined as 'set forth below, or (ii) if such General Partner's interest as a General Partner in the partnership shall not be sold pursuant to clause (i) above, such General Partner's interest as a General Partner in the Partnership shall be converted from a general partner interest to a limited partner interest and such person shall be forthwith admitted as a Special Limited Partner of the Partnership with the same interest in profits, losses and distributions as it had as a General Partner (subject, however, to proportionate dilution with all other Partners to provide compensation or an interest in the Partnership, or both, to any successor or substitute General Partner) but with no right to vote on any matter except as otherwise required by the Act. For purposes of the foregoing, the fair market value of a departing General Partner's interest as a General Partner in the Partnership shall be determined by agreement between said departing General Partner and its successor General Partner or, failing agreement no later than 30 days after the date on which such successor is approved as a General Partner, by an independent investment banking firm or other independent expert selected by such departing General Partner and such successor or failing agreement on such selection no later than the 5th day after the end of such 30-day period, as selected by Sixty Percent of the Limited Partners.

10.7 Election of Substitute General Partner . Upon the last General Partner ceasing to be a General Partner in accordance with this Agreement or within thirty (30) days thereafter, if, pursuant to Paragraph 11.2, the Limited Partners elect to continue the business of the Partnership, substitute General Partners may be elected by the unanimous vote or written consent of the Limited Partners.

10.8 Election of Additional or Substitute General Partners . Unless the last General Partner shall have ceased to be a General Partner in accordance with this Agreement (in which case Paragraph 10.7 shall apply), upon the vote or written consent of at least a Majority of the Limited Partners, any person or entity may be elected an additional General Partner or a substitute General Partner for the General Partner ceasing to be a General Partner, provided that, in connection therewith, there shall have been furnished to the Managing General Partner (or, if none, the other remaining General Partner or General Partners) on behalf of the Partnership and the Limited Partners an Opinion of Counsel acceptable to Sixty Percent of the Limited Partners (or, with respect to matters described in clause (i) below, in the event that such election and any related modifications to this Agreement or compensation payable to such person or entity will result in any increase in the Utility Ratio or the Common Ownership Percentage or the Common Ownership Percentage will be 50% (or such other relevant percentage established by the Federal Energy Regulatory Commission) or greater after giving effect thereto, Ninety-Five Percent of the Limited Partners) to the effect that such election, and any related modifications to this Agreement or compensation payable to such person or entity will not cause (i) the Partnership to lose its exemption from certain Federal and state public utility laws provided by PURPA, (ii) dissolve the Partnership, or (iii) terminate the Partnership for Federal or California income tax purposes or impair the ability of the Partnership to be treated as a partnership under the Federal income tax laws or the income tax laws of the State of California. Upon such election, said additional General Partner shall have all the rights, powers and duties of a General Partner under this Agreement.

10.9 INTENTIONALLY DELETED

10.10 Change in Managing General Partner . In the event that for any reason LPM shall cease to be a General Partner, then, unless a Majority of the Limited Partners decide otherwise, by vote or written consent, LPM VII shall thereupon automatically become the Managing General Partner. A Majority of the Limited Partners may by vote or written consent, with or without cause, change the Managing General Partner and designate any other General Partner (who consents to serve) as the Managing General Partner. Any such change shall be effective immediately upon notice of such vote or consent being delivered to the removed Managing General Partner.

ARTICLE XI

DISSOLUTION AND WINDING-UP OF THE PARTNERSHIP

11.1 Dissolution of the Partnership . The Partnership shall be dissolved upon the first of any of the following events to occur:

(a) The last General Partner ceases to be a General Partner. in accordance with the provisions of this Agreement unless all Partners agree in writing to continue the business of the Partnership as provided in Paragraph 11.2 and to admit one or more General Partners as provided in Paragraph 10.7. A General Partner ceasing to be a General Partner shall not dissolve the Partnership if there is a remaining General Partner or a substitute General Partner who elects to continue the business of the Partnership. Such General Partner is hereby authorized to continue the business of the Partnership.

(b) The vote or written consent to dissolve by all General Partners and Sixty Percent of the Limited Partners.

(d) The sale, transfer or other irrevocable disposition of all or substantially all of the property of the Partnership.

(e) Otherwise by operation of law.

11.2 Election upon Dissolution . Upon a dissolution of the Partnership pursuant to Paragraph 11.l(a), any one or more of the Limited Partners may, promptly after such dissolution, give notification thereof to the other Limited Partners and may call for a vote of the Limited Partners to continue the business of the Partnership or to wind-up the Partnership pursuant to Paragraph 11.3. The last former General Partner shall be deemed to have elected and hereby agrees to continue the business or the Partnership, and if all Limited Partners elect affirmatively to continue the business of the Partnership a substitute General Partner shall be elected pursuant to Paragraph 10.7 and all of the Limited Partners shall execute a unanimous written consent or other written agreement to evidence their election to continue the business of the partnership.

11.3 Winding-Up of the Partnership . Upon the election of the Partners to wind-up the Partnership, or the failure of the Limited Partners to elect to continue the business of the Partnership and to evidence such election in writing or to elect a substitute General Partner pursuant to Paragraph 11.2, or upon a dissolution of the Partnership pursuant to Paragraph 11.l(b), 11.1(c), 11.1(d), or 11.1(e), the General Partners (or if there is not a General Partner, a liquidator elected by a Majority of the Limited Partners) shall take full account of the Partnership's assets and liabilities and the assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, after the allocations prescribed in Paragraph 7.2 have been made for the year of dissolution, shall be applied and distributed in the following order of priority:

(a) To the payment of the debts and liabilities of the Partnership and the expenses of liquidation in the following order: (i) those owing to creditors other than Partners, and (ii) those owing to Partners;

(b) To. the setting up of any reserves which the General Partner or liquidator may deem. reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership (provided that if and when such contingencies shall cease to exist, any remaining assets in such reserves shall be distributed as provided herein);

(c) To Partners and former Partners in satisfaction of liabilities for distributions under Sections 15661, 15664 and 15665 of the Act;

(d) To Partners in accordance with their respective positive capital account balances, and former Partners to the extent of amounts due pursuant to Paragraph 9.6; and

(e) To Partners in accordance with their respective Interests.

ARTICLE XII

BOOKS OF ACCOUNT, ACCOUNTING, REPORTS,
FISCAL YEAR, BANKING AND TAX ELECTION

12.1 Books of Account . The Managing General Partner shall keep, or cause to be kept, adequate books and records, setting forth a true and accurate account of all business transactions arising out of or in connection with the conduct of the Partnership's business, at the Partnership's principal executive office. The Limited Partners and their designated representatives shall be permitted to inspect and copy all books and records during normal business hours. Without limiting the generality of the foregoing provisions, the Partnership shall keep at its principal office all of the following:

(a) A current list and the full name and last known business or residence address of each Partner set forth in alphabetical order together with the contribution and: the share and profits and loss of each Partner.

(b) A copy of the Certificate of Limited Partnership and all Certificates of Amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed.

(c) Copies of the Partnership's Federal, state, and local income tax or information returns and reports, if any, of the six most recent taxable years and all relevant records for as along as necessary to satisfy applicable law.

(d) Copies of the original partnership agreement and all amendments thereto.

(e) Financial statements of the Partnership for the six most recent fiscal years.

(f) The Partnership's books and records for at least the current and past three fiscal years. Upon the request of a Limited Partner, the General Partners shall promptly deliver to such Limited Partner, at the expense of the Partnership, a copy of the information required to be maintained by clauses (a), (b), or (d) immediately above.

12.2 Fiscal Year . The fiscal year of the Partnership shall be the calendar year.

12.3 Accounting and Reports . As soon as reasonably practicable after the end of each fiscal year, but not later than seventy-five (75) days after such end, each Partner shall be furnished with a copy of the balance sheet of the Partnership as of the last day of such fiscal year, an income statement for such fiscal year, and a statement showing the amounts allocated to or allocated against such Partner's Capital Account pursuant to this Agreement during or in respect of the year, and all items of income, gain, deduction, credit, or loss allocated for purposes of the Code and any applicable state or local income tax laws pursuant to this Agreement. Such balance sheet and statement of income shall be prepared on the accrual method of accounting. The Managing General Partner shall notify each Limited Partner, promptly upon obtaining knowledge thereof, of any default under the Operative Documents which, in its judgment, is likely to have a material adverse effect on the Project or the Partnership.

12.4 Capital Accounts . (a) A capital account shall be maintained for each Partner in accordance with Treasury Regulations Section 1.704-1(b), or any successor provision as follows: (i) each Partner's Capital Account shall be credited with the amount of any Capital Contribution made by such Partner, (ii) each Partner's Capital Account shall be, credited with the fair market value of any property contributed by such, Partner to the Partnership (net of liabilities secured by such contributed property that the partnership is considered to assume or take subject to under Section 752 of the Code); (iii) each Partner's Capital Account shall be credited with allocations to such Partner of Net Profits; (iv) each Partner's Capital Account shall be debited with the amount of cash distributed to such Partner; (v) each Partner's Capital Account shall be debited with the fair market value of any property distributed to such Partner by the Partnership (net of liabilities secured by such property that such Partner is, considered to assume or take subject to under Section 752 of the Code); and (vi) each Partner's Capital Account shall be debited with allocations to such Partner of Net Loss.

(b) Upon a distribution in kind of Partnership property, the Capital Account of each Partner will be debited or credited under Article VII with such Partner's allocable share of the gain or loss which would have been recognized by the Partnership had the property be sold for an amount equal to its fair market value immediately prior to such distribution.

(c) If any Interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest.

(d) The Capital Account of each Partner shall be reduced by an amount equal to the percentage of the "energy percentage"" and the "regular percentage" of any United States federal investment tax credit in respect of the Project allocated to such Partner (or any predecessor in interest) by which the Partnership is required to reduce its basis in the property eligible for depreciation for federal income tax purposes on account of such credits.

(e) The Capital Account of each Limited Partner, to the extent attributable to Class A Units held by such Partner, and of each General Partner, shall be reduced by 63.5659 percent of any California solar energy tax credit in respect of the Project allocated to such Partner (or its predecessor in interest) except that if the amount of the reduction pursuant to subparagraph (d) shall be based on a percentage of United States federal investment tax credit that is greater than 50 percent for the "energy percentage" of the United States federal investment tax credit, the amount of the reduction hereunder shall be an amount equal to such percentage of the California solar energy tax credit as may be deemed necessary to ensure that the aggregate Capital Accounts of the holders of Class A Units will equal one percent (1%) of the aggregate Capital Accounts of the holders of both Class A Units and Class B Units (disregarding any portion of the Capital Accounts of the holders of Class B Units preferable to the ownership of Class A Units) after the adjustment required by clause (d) above and disregarding any other item of income, gain, loss or deduction that may have been credited to the Capital Account of any Partner.

(f) The Capital Account of each Partner shall be increased by an amount equal to any increase in the tax basis of the Project attributable to a recapture of any' United States federal investment tax credit in the same proportion as such investment tax credit recapture is allocated to such Partner.

12.5 Banking and Investment Funds . All funds of the Partnership shall be deposited with the Disbursement Trustee in accordance with the terms of the Disbursement Agreement, or shall be invested in Permitted Investments and up to $400,000 may be deposited in a separate bank account or accounts of the Partnership at Bank Leumi provided Bank Leumi maintains a net worth and capital surplus in excess of $100,000,000.

12.6 Tax Election . Upon the transfer of a Class B Unit in the Partnership or distribution of the Partnership's assets to a Class B Limited Partner, the Tax Matters Partner shall cause the Partnership to elect pursuant to Section 754 of the Code, to adjust the basis of the Partnership's property as allowed by Section 734(b) and Section 743(b) thereof upon the consent of Sixty Percent of the Limited Partners.

12.7 Partnership Returns . The General Partners shall, for each fiscal year required, file with the U.S. Internal Revenue Service on behalf of the Partnership, a U.S. Partnership Information Return within the time prescribed by law (including extensions) for such filing. The General Partners shall also file on behalf of the Partnership such state, local, or foreign income tax returns as may be required by applicable law. Within 60 days after the end of each fiscal year of the Partnership, the General Partners shall send to each of the Partners such information as necessary to complete federal, state and local income tax or information returns, including Schedules K-1 (or their equivalent successor tax reports) and copies of the Partnership's Federal, state, local and foreign income tax or information returns for the year.

12.8 Tax Matters Partner . The Managing General Partner is hereby designated as the "Tax Matters Partner" of the Partnership as said term is defined in Section 6231(a)(7) of the Code and any comparable provision of State of local law and in such capacity and pursuant to applicable law, agrees (subject to the provisions of Paragraph 12.10) as follows:

(i) to timely file all necessary federal, state,-local and foreign partnership returns for the Partnership and to furnish the Limited Partners with schedules consistent with the treatment of all items on those returns;

(ii) to keep the Limited Partners fully and timely informed of all administrative and judicial proceedings for the adjustment of Partnership items (as defined in Section 6231(a)(3) of the Code and any comparable provision of state, local or foreign law) at the Partnership level and shall, without limitation, forward to each Limited Partner any agent's reports and notices of conferences and all other correspondence pertaining to the progress of any audit being conducted by any federal, state, local or foreign taxing authority;

(iii) to notify all Limited Partners of any intention to file any petition for a redetermination of Partnership items within 5 business days from the date of receipt of the statutory notice of deficiency; and

(iv) not to extend the statute of limitations for assessment of tax deficiencies against any Partner with respect to adjustments to the Partnership's federal, state, local or foreign tax returns without the consent of a Majority of the Limited Partners.

Any Partner who enters into a settlement agreement with any taxing authority with respect to any Partnership items shall notify the Tax Matters Partners of the agreement and its terms within 60 days from its date, and the Tax Matters Partner shall notify the other Partners of the settlement within 30 days of receipt of notification by the Partner entering into the settlement.

In addition to the foregoing, actions by the Tax Matters Partner shall be subject to the restriction that the Tax Matters Partner, on its own or at the request of a Limited Partner, may file a request for administrative adjustment on behalf of the Partnership unless (after due and timely notice in writing and opportunity to object) a majority in interest of Limited Partners having an interest in the outcome (as defined in Section 6226(d) of the Code) instruct the Tax Matters Partner not to file such a request.

12.9 Financial Statements and Reports . The General Partners shall deliver audited financial statements to the Partners annually accompanied by a report of independent accountants of recognized national standing. Such statements shall include an income statement, balance sheet and statement of changes in financial condition, setting forth, in each case, in comparative form, corresponding figures from the preceding calendar year. Such annual report shall discuss the activities of the Partnership for the year and provide a General Partner's discussion of the results of the operations and other operating and financial data for the year. Such statements and report shall be delivered no later than ninety (90') days after the end of each calendar year. In addition, similar unaudited quarterly statements and quarterly reports shall be prepared and delivered within forty-five days after the end of each calendar quarter.

12.10 Partnership Level Administrative and Judicial Proceedings . (a) In the event of any Partnership level proceeding instituted by the Internal Revenue Service pursuant to Sections 6221 through 6233 of the Code, or any comparable provision of state or local law, the Tax Matters Partner shall upon written request of Sixty Percent of the Limited Partners relinquish control of the nature and content of all action and defense to be taken by the Partnership in response to such proceeding to the Participants (as defined in the Tax Indemnity Agreement). The Tax Matters Partner hereby further agrees on written request of Sixty Percent of the Limited Partners to relinquish all control of the nature and content of all proceedings pursuant to Sections 6221 through 6233 of the Code or any comparable provision of state or local law instituted by or on behalf of the Partnership, including the decision to institute such proceedings, whether administrative or judicial, and whether in response to a previous proceeding against the Partnership or otherwise, to such Participants; or

(b) Upon the election of Sixty Percent of the Limited Partners, such Person as shall be designated by such Partners shall be admitted to the Partnership as a General Partner and shall upon admission to the Partnership be substituted as the Tax Matters Partner of the Partnership. Such substitute Tax Matters Partner shall not be bound by the provisions of paragraph (a) above.

12.11 Partnership Information Meetings and Reports . (a) Until the later of (i) December 31, 1990 or (ii) such time as the Plant has met ninety-five percent of its annual projected output as set forth in the Final Projections, the Managing General Partner shall once each calendar quarter, with the first such meeting to be held during the first calendar quarter of 1989, call a meeting of the Limited Partners to discuss and report on Plant operations. Thereafter the Managing General Partners shall. call such a meeting at least once each calendar year.

(b) So long as the Managing General Partner is obligated to call a quarterly meeting pursuant to Paragraph 12.11(a) it shall, on a monthly basis, commencing with the month of January 1989, send a report to each Holder of a Class B Unit setting forth the amount of electricity produced for said month. Such monthly reports shall be delivered no more than thirty days after the end of the month to which such report relates. At such time as quarterly meetings are no longer required, such information shall be delivered on an annual basis and shall be sent no later than forty-five (45) days after the end of the calendar year.

(c) At least sixty (60) days prior to the beginning of each Partnership fiscal year commencing after 1988, the Managing General Partner shall send each Limited Partner the proposed budget for the Partnership's next fiscal year, which budget shall, among other things, describe the amount and type of insurance coverage provided for therein and the cost thereof.

ARTICLE XIII

POWER OF ATTORNEY

13.1 Power of Attorney . Each Limited Partner holding Units which comprise less than 1.8 percent of all Interests hereby makes, constitutes, and appoints each of the General Partners, acting alone, and any successor or additional General Partners, with full power of substitution and resubstitution, their true and lawful attorney for them in their name, place and stead and for their use and benefit, to sign, execute, certify, acknowledge, swear to, file and record this Agreement, and to sign, execute, certify, acknowledge, file and record all instruments amending this Agreement, as now or hereafter amended, and such agreements or other instruments or documents, in each case that may be appropriate: (i) to reflect any amendments made to the Agreement by the Partners pursuant to the Agreement; (ii) to reflect the admission to the Partnership of any General Partner, Limited Partner, substituted Limited Partner or General Partner, or the withdrawal of any Partner in the manner prescribed in the Agreement; and (iii) which may be required of the Partnership or of the Partners by the laws of the State of California, or any other jurisdiction. Each such Partner authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary or advisable in connection with any of the foregoing, hereby giving such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in and about the foregoing as fully as such Partner might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact shall lawfully do or cause to be done by virtue thereof.

13.2 Duration of Power . The power of attorney granted pursuant to Paragraph 13.1:

(a) Is a special power of attorney coupled with an interest and is irrevocable, and shall survive the death, dissolution, incompetency, bankruptcy or legal incapacity of the applicable Limited Partner;

(b) May be exercised by the attorney-in-fact by listing all of the Partners who have granted a power of attorney pursuant to Paragraph 13.1 and who are executing any agreement, certificate, instrument or document with the single signature of such attorney-in-fact acting as attorney-in-fact for all Partners; and

(c) Shall survive the delivery of an assignment by a Partner of any or all interests in the Partnership, except that where the purchaser, transferee, or assignee thereof has the right to be, or with the consent of the General Partners is admitted as, a Limited Partner, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling each such attorney-in-fact to execute, acknowledge, swear to, and file any such agreement, certificate, instrument, or document necessary to effect such substitution. Any assignee or successor of a Partner who has granted a power of attorney under Paragraph 13.1 does hereby make, constitute, and appoint the General Partners, and any successor additional General Partners, his attorney-in-fact in the same manner and force and for the same purposes, as the assignor or person succeeded.

ARTICLE XIV

LIABILITY AND INDEMNIFICATION OF
THE GENERAL PARTNERS

14.1 Exoneration . Except in case of: (i) bad faith; or (ii) willful misconduct; or (iii) in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances, the doing of any act or the failure to do any act by the General Partners in their capacities as such, the effect of which may cause or result in loss or damage to the Partnership, if done pursuant to the advice of legal counsel employed by the General Partners on behalf of the Partnership, or if done in good faith to promote the best interests of the Partnership, shall not subject the General Partners to any liability to the Partners or the Partnership. The foregoing shall not affect or diminish any right which the Partnership may have against a General Partner by reason of contracts entered into with such General Partner for the performance of services. The General Partners shall diligently enforce the provisions of all such contracts on behalf of the Partnership.

14.2 Indemnification . The Partnership shall, solely from its assets and without recourse to any Limited Partner defend, indemnify and hold harmless the General Partners including all officers, directors, employees, or agents of the General Partners and each employee or agent of the Partnership against all claims, actions, demands, losses, liabilities, costs, expenses (including reasonable attorneys' fees), damages and threat of loss as a result of any claim or legal proceeding relating tot the performance or non-performance of any act concerning the activities of the Partnership (other than acts and omissions arising from or in connection with any contract with the Partnership pursuant to which such General Partner acts as agent for the owners of the Plant or performs management, operation, maintenance or other services at the Plant and other than any loss, claim or damage arising out of or based upon any violation of any state or federal securities law, or any rule or regulation promulgated thereunder); provided, however , the person or party against whom a claim is made or legal proceeding is directed must not have been culpable of gross negligence, bad faith or willful misconduct, or, in the case of the Managing General Partner, the failure to use such care in the performance of the duties of the Managing General Partner as an ordinarily prudent person in a like position would use under similar circumstances. The Partnership shall advance any and all reasonable expenses incurred by a General Partner, agent or employee as described above in defending any proceeding prior to the final disposition of such proceeding; provided, however , that any such General Partner, agent or employee, prior to receiving any advancement hereunder shall execute and deliver to the Partnership an undertaking to repay any and all amounts advanced unless it shall be determined ultimately that such person is entitled to be indemnified as authorized above.

14.3 Liability . Notwithstanding anything in this agreement to the contrary, except for liability described in Paragraph 14.2, the General Partners shall not be personally liable for the return of the Capital Contribution of any Partner, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets. Nothing herein shall affect any liability of any General Partner under any Operative Document or other agreement other than this Agreement.

ARTICLE XV

MISCELLANEOUS

15.1 Notices . Except as required by Paragraph 15.5, any notice, payment, demand, offer or communication required or permitted to be given by any provision of the Agreement shall be sufficient if delivered to the Partners in accordance with the Notice Provisions attached as Schedule Y-1 to the Project Participation Agreement.

15.2 Captions . Paragraph and other captions contained in this Agreement are for reference purposes only and do not interpret, define or limit the scope, extent or intent of this Agreement, or any provision hereof.

15.3 Severability . Every provision of this Agreement is severable. If any term or provision hereof is held to be illegal or invalid for any reason by any duly constituted court, agency, or tribunal, such illegality or invalidity shall not affect the validity of the remainder of the Agreement.

15.4 Amendments . (a) Amendments to this Agreement may be proposed by the General Partners or. by the Limited Partners having an aggregate Interest of ten. percent (10%) or more, and the General Partners shall transmit to the Limited Partners a verbatim statement of any proposed amendment and may include with any such submission their recommendations as to the proposed amendment. The General Partners shall seek the written vote of the Limited Partners on the proposed amendment or shall call a meeting of the Limited Partners to vote thereon. A proposed amendment shall be adopted and become effective as an amendment hereto if it receives the affirmative vote of Sixty Percent of the Limited Partners.

(b) Notwithstanding the provisions of Paragraph 15.4(a), (i) in the case of any provision of this Agreement that requires the vote, consent or approval of Limited Partners owning Units representing a specified percentage of Interests to take any action (including any provision requiring an Opinion of Counsel acceptable to Limited Partners representing a specified percentage of Interests), such provision may not be amended in any respect without the written consent of Limited Partners holding Units representing such specified percentage of Interests, and (ii) no amendment to this Agreement may (A) require any Partner to make additional Capital Contributions to the Partnership or loan funds to the Partnership or otherwise enlarge the obligations of any Partner without in each case such Partner's consent, or eliminate the non-recourse provisions in Paragraph 5.10 with respect to any Partner without its consent, or increase the percentage voting interest hereunder of any Partner without its consent, or (B) change the purposes of the Partnership as set forth in Paragraph 4.1 without the written consent or approval of Ninety-Five Percent of the Limited Partners.

15.5 Meetings and Means of Voting . A meeting of the Partners for any matters on which the Limited Partners may vote may be called by any of the General Partners or by Limited Partners holding more than ten percent of the Units held by all Limited Partners. Whenever the Partners are required or permitted to take any action at a meeting, a written notice of the meeting shall be given not less than 10, nor more than 60, days before the date of the meeting to each Partner entitled to vote at the meeting. The notice shall state the place, date, and hour of the meeting and the general nature of the business to be transacted, and no other business may be transacted. Meetings of Partners may be held at any place in the United States within or without the State of -California as may be specified in the' notice of Meeting. If no place is stated in such notice, the meeting shall be held at the principal executive office of the Partnership. Notice of the meeting shall be given, and voting at the meeting shall be conducted, as provided in Section 15637 of the Act or any successor provision thereto.

15.6 Right to Rely Upon the Authority of the General Partners . No person dealing with the General Partners shall be required to determine the General Partners ' authority to make any commitment or undertaking on behalf of the Partnership, nor to determine any fact or circumstance bearing upon the existence of their authority. In addition, no purchaser of any asset owned by the Partnership. shall be required to determine the sole and exclusive authority of the General Partners to sign and deliver on behalf of the Partnership any such instrument of transfer, or to ensure the proper application or distribution of revenues or proceeds paid or credited in connection therewith, unless such purchasers shall have received written notice from the Partnership affecting the same.

15.7 Litigation . The General Partners shall prosecute and defend such actions at law or in equity as may be necessary to enforce or protect the interests of the Partnership. The Partnership and the General Partners shall respond to any final decree, judgment, or decision of a court of competent jurisdiction in the matter. The Partnership shall satisfy any such judgment, decree, or decision first out of any insurance proceeds available therefor, and then out of the capital and assets of the Partnership.

15.8 Governing Law . The local, internal laws of California shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the Partners.

15.9 Waiver of Action for Partition . Each of the Partners irrevocably waives, during the term of this Partnership and during the period of its liquidation following any dissolution, any right that such Partner might have to maintain any action for partition with respect to any of the assets of the Partnership.

15.10 Counterparts . This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had executed the same counterpart. All counterparts shall be construed together and shall constitute one agreement.

15.11 Parties in Interest . Each and every covenant, term, provision and agreement herein contained shall be binding upon and inure to the benefit of the permitted successors and assigns of the respective parties hereto.

15.12 Integrated Agreement . This Agreement supersedes all prior agreements, understandings, restriction representations or warranties among the General Partners and the Limited Partners with respect to the subject matter hereof.

15.13 Right to Rely Upon Authority of Person Signing Agreement . In the event that a Limited Partner is a trust (with or without disclosed beneficiaries), partnership, limited partnership, joint venture, corporation, or any entity other than a natural person, the Partnership and the General Partners shall (i) not be required to determine the authority of the person signing this Agreement or any amendment hereto to make any commitment or undertaking on behalf of such entity, nor to determine any fact or circumstance bearing upon the existence of his authority; (ii) not be required to see to the application or distribution of. revenues or proceeds paid or credited to the person signing this Agreement or any amendment hereto on behalf of such entity; (iii) be entitled to rely upon the authority of the person signing this Agreement or any amendment hereto with respect to the voting of the Interest of such entity and with respect to the giving of consent on behalf of such entity in connection with any matter for which consent permissible or required hereunder; and (iv) be entitled to rely upon the authority of any general partner, joint venturer, co-trustee, successor trustee, or president, vice president, or other officer (as the case may be) of any such entity the same as though such person were the person originally executing this Agreement or any amendment hereto on behalf of such entity.

15.14 Rights of Non-Recourse Creditors . No non-recourse creditor of the Partnership shall have or acquire, at any time as a result of making any loan or advance, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor limited to the particular asset which is the subject of recourse.

15.15 Number and Gender . Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders and the word "person" shall include corporation, firm, partnership or other form of association.

15.16 Competition; Independent Activities . The General Partners and their respective Affiliates, and the Limited Partners and their respective Affiliates, may individually or otherwise presently own or hereafter acquire interests in enterprises that compete with the Partnership or may themselves manufacture, design, sell or service products or services that compete with the Partnership, without having or incurring any obligation to offer any interest in such activities, to the Partnership. Nothing contained in this Agreement shall prohibit such competition or give the Partnership or any Partner or any Affiliate thereof any interest in the revenues, capital, or profits of such enterprises or activities or give the Partnership or any Partner or any affiliate thereof any right whatsoever to participate therein or share, in any manner, in the income therefrom or any claim in respect thereof.

15.17 Certain Terms . As used in Articles V, VII and XII and Paragraphs 9.2 (other than subparagraph (f) thereof), 9.6, 9.7, 9.8, 15.6 and 15.9, the terms "Partners" and "Limited Partners" shall, for all purposes other than for purposes of establishing voting, consent or approval requirements, include any person or entity to which one or more Units has been transferred or assigned in accordance with this Agreement but which has not been admitted as a Limited Partner.

IN WITNESS WHEREOF, this Amended and Restated Agreement of Limited Partnership has been executed as of this 31 ^st day of July, 1988.

c/o Luz Engineering Corporation 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024	CORPORATE GENERAL PARTNERS Luz Partnership Management, Inc. By /s/ J. F. VERHEY James F. Verhey, President LPM VII, Inc. By /s/ J. F. VERHEY James F. Verhey, President
c/o Luz Engineering Corporation 924 Westwood Boulevard Suite 1000 Los Angeles, California 90024	INDIVIDUAL GENERAL PARTNERS /s/ P. FRANCOIS Patrick Francois /s/ STEPHEN C. BOREK Arnold Goldman By Stephen Borek, as attorney-in-fact
c/o Luz Engineering Corporation 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024	WITHDRAWING GENERAL PARTNER Luz Engineering Corporation /s/ P. FRANCOIS
c/o Luz Engineering Corporation 924 Westwood Boulevard, Suite 1000 Los Angeles, California 90024	LIMI'TED PARTNERS: WITHDRAWING ORIGINAL LIMITED PARTNER Luz Development and Finance Corporation By /s/ J. F. VERHEY James F. Verhey, President
	CLASS A LIMITED PARTNERS: Luz International Limited Oliver De Silva, Inc. F. Korbel & Bros., Inc. Vista Paint Corporation USA Petroleum Corporation Yardbirds Electric and Plumbing Supply, Inc. ESR Corporation By: Luz Partnership Management, Inc., their Attorney-in-fact By /s/ J. F. VERHEY James F. Verhey, President

AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VII
POTOMAC CAPITAL INVESTMENT CORPORATION 1020 19th Street N.W. Suite 800 Washington, D.C. 20036	By /s/ DAVID R. OLIVER, JR. Name: David R. Oliver, Jr. Title: Executive Vice President
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VII
METLIFE CAPITAL, Limited Partnership 10900 NE 8 ^th Suite 1300 Bellevue, WA 98009	By /s/ WILLIAM G. SPEAR Name: William G. Spear Title: Senior Vice President
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VII
FEDERAL NATIONAL MORTGAGE ASSOCIATION 3900 Wisconsin Avenue, N.W. Washington, D.C. 20016	By /s/ R. J. MAHN Name: Robert J. Mahn Title: Senior Vice President and Controller
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VII
DOMINION ENERGY, INC. 701 East Byrd Federal Reserve Building, 16th Floor Richmond, VA 23261	By /s/ RONALD H. LEASBURG Name: Ronald H. Leasburg Title: President
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VII
AT&T CREDIT CORPORATION 44 Whippany Road Morristown, NY 07960	By /s/ CHARLES D. VAN SICKLE Name: Charles D. Van Sickle Title: Senior Vice President
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VII
IWG CO. 3 206 East Second Street Davenport, Iowa 52801	By /s/ JOHN C. DECKER Name: John C Decker Title: Vice-President
AGREEMENT OF LIMITED PARTNERSHIP FOR SEGS VII
BLOUNT, INC. 4520 Executive Park Drive Montgomery, Alabama 36116	By /s/ R. W. VAN SANT Name: R William Van Sant Title :President

EXHIBIT A CAPITAL CONTRIBUTIONS, PERCENTAGE INTEREST, NUMBER OF UNITS OWNED AND NAMES OF LIMITED PARTNERS OF LUZ SOLAR PARTNERS LTD. VII, A CALIFORNIA LIMITED PARTNERSHIP
	No. of Units Class A Class B		Capital Contribution	Percentage Interest
Potomac Capital Investment Corp.		546	$13,650,000	24.5025000000%
Dominion Energy, Inc.		336	$ 8,400,000	15.0784615385%
IWG Co. 3		200	$ 5,000,000	8.9752747253%
Federal National Mortgage Association		328	$ 8,200,000	14.7194505495%
Blount, Inc.		158	$ 3,950,000	7.0904670330%
Metlife Capital, Limited Partnership		400	$10,000,000	17.9505494505%
AT&T Credit Corporation		216	$ 5,400,000	9.6932967033%

Luz International Limited	206		$ 5,150,000	0.7609701493%
Oliver de Silva, Inc.	16		$ 400,000	0.0591044776%
F. Korbel & Bros., Inc.	10		$ 250,000	0.0369402985%
Vista Paint Corporation	10		$ 250,000	0.0369402985%
USA Petroleum Corporation	10		$ 250,000	0.0369402985%
Yardbirds and Electric and Plumbing Supply, Inc	8		$ 200,000	0.0295522388%
ESR Corporation	8		$ 200,000	0.0295522388%

GENERAL PARTNER
Luz Partnership Management, Inc.				0.5000000000%
Patrick Francois				0.2500000000%
Arnold Goldman				0.2500000000%
	268	2,184	$61,300,000	100.0000000000%

RECORDING REQUESTED BY AND

WHEN RECORDED MAIL TO:

SPACE ABOVE THIS LINE FOR RECORDER'S USE

STATE OF CALIFORNIA

Office of

March Fong eu

Secretary of state

SACRAMENTO

I, MARCH FONG EU, Secretary of State of the State of California, hereby certify:

That the annexed transcript of 1 page(s) was prepared by - and in this office from the record on file, of which it purports to be a copy, and that it is full, true and correct.

IN WITNESS WHEREOF, I execute

this certificate and affix the

Great Seal of the State of California this JUN 0 4 1992

Secretary of State

SEC/STATE FROM LP 222A(Rev 9/87) 87 46229

STATE OF CALIFORNIA

March Fong eu

Secretary of state From Lp 2

AMENDMENT TO CERTIFICATE OF LIMITED PARTNERSHIP

IMPORTANT-Read instructions on back before completing this form

This Certificate Is presented for filing pursuant to Section 15622, California Corporations Code.

1. SECRETARY OF STATE FILE NO. 2 NAME OF LIMITED PARTNERSHIP

(ORIGINAL CERTIFICATE-FORM LP-1) 8519700048 LUZ SOLAR PARTNERS LTD., VII, a California Limited Partnership

3. THE CERTIFICATE OF LIMITED PARTNERSHIP IS AMENDED AS FOLLOWS: (COMPLETE APPROPRIATE SUB-SECTION(S) CONTINUE ON SECOD PAGE. IF NECESSARY)

A. THE LIMITED PARTNERSHIP NAME IS CHANGED TO:

B. PRINCIPAL EXECUTIVE OFFICE ADDRESS CHANGE: E. GENERAL PARTNER NAME CHANGE:

ADDRESS: 41100 Highway 395 OLD NAME:

CITY: Boron STATE: CA ZIP CODE: 93516 NEW NAME:

C. CALIFORNIA OFFICE ADDRESS CHANGE: F. GENERAL PARTNER(S) WITHDRAWN:

ADDRESS: NAME:

CITY: STATE: CA ZIP CODE NAME:

D. GENERAL PARTNER ADDRESS CHANGE: G. GENERAL PARTNER ADDED:

NAME: KRAMER JUNCTION COMPANY NAME

ADDRESS: 41100 Highway 395 ADDRESS:

CITY: Boron STATE: CA ZIP CODE: 93516 CITY: STATE: ZIP CODE:

H. INFORMATION CONCERNING THE AGENT FOR SERVICE OF PROCESS HAS BEEN CHANGED TO:

NAME:

ADDRESS: CITY: STATE: CA ZIP CODE

I .THE NUMBER OF GENERAL PARTNERS REQUIRED TO J. ACKNOWLEDGE J. OTHER MATTERS TO BE INCLUDED IN

AND FILE CERTIFICATES OF AMENDMENT. DISSOLUTION. CONN- THE CERTIFICATE OF LIMITED PARTNERSHIP ARE

TINUATION AND CANCELLATION IS CHANGED TO: AMENDED AS INDICATED ON THE ATTACHED PAGE(S)

IT IS HERE BY DECLARED THAT I AM (WE ARE) THE PERSON(S) WHO THIS SPACE FOR FILING OFFICER USE

EXICUTED THIS AMENDMENT TO THE IDENTIFIED CERTIFICATE OF LIMITED

PARTNERSHIP. WHICH EXECUTION IS MY (OUR) ACT AND DEED. (SEE INSTRUCTIONS)

SIGNATURE SIGNATURE 8519700048

POSITION OR TITLE DATE POSION OR TTTLE DATE FILED

KRAMER JUNION COMPANY in the office of the Secretary of State

Ot the State of California

By: JUN 3 1992

SIGNATURE John McConomy, President SIGNATURE

POSITION OR TITLE DATE POSITION OR TTE DATE of MARCH FONG EU

SECRETARY OF STATE

RETURN ACKNOWLEDGEMENT TO

NAME Alan M. Albright, Esq.

ADDRESS Dewey Ballantine

CITY 333 South Hope Street, 30th Floor

STATE Los Angeles, CA 90071

ZIP CODE

SEC/STATE REV 1/88 FROM LP .2 FEE: $15

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 12/07/1998 981468394 - 2975211
CERTIFICATE OF INCORPORATION OF PEPCO SERVICES NEWCO, INC.
FIRST. The name of this corporation shall be: PEPCO SERVICES NEWCO, INC. SECOND. Its registered office in the State of Delaware is to be located at 1013 Centre Road, in the City of Wilmington, County of New Castle and its registered agent at such address is CORPORATION SERVICE COMPANY. THIRD. The purpose or purposes of the corporation shall be: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH. The total number of shares of stock which this corporation is authorized to issue is: One hundred (100) shares with a par value of One Dollar ($1.00) per share, amounting to One Hundred Dollars. FIFTH. The name and address of the incorporator is as follows: Kathryn Messina Corporation Service Company 1013 Centre Road Wilmington, DE 19805 SIXTH. The Board of Directors shall have the power to adopt, amend or repeal the by-laws. SEVENTH. No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law, (i) for breach of the director's duty of loyalty to the Corporation or its stockholders,. (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article seventh shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment. IN WITNESS WHEREOF, the undersigned, being the incorporator hereinbefore named, has executed, signed and acknowledged this certificate of incorporation this seventh day of December, A.D., 1998.
		/s/ Kathryn Messina Kathryn Messina Incorporator

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 12/16/1998 981486978 - 2975211
PEPCO SERVICES NEWCO, INC. Certificate of Amendment to Certificate of Incorporation
PEPCO SERVICES NEWCO, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation") does hereby certify: FIRST. That the Board of Directors of the Corporation, pursuant to a unanimous written consent, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of the Corporation: Article First of the Corporation's Certificate of Incorporation shall be amended to read in its entirety as follows: FIRST: The name of this corporation shall be: Met Electrical Testing Company, Inc. SECOND. That in lieu of a meeting of stockholders of this Corporation, the holder of all of the outstanding stock entitled to vote on such amendment has executed and delivered its written consent to such amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware. THIRD. That the aforesaid amendment was duly adopted in accordance with the applicable provision of Sections 141(f), 228 and 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by its Vice President this 10 ^th day of December, 1998.
		/s/ Joy Johnson Name: Joy Johnson Title: Vice President

BY-LAWS

OF

Pepco Services Newco, Inc.
(a Delaware Corporation)

December 7, 1998

PEPCO SERVICES NEWCO, INC. BY-LAWS Article I OFFICES
Section 1. The registered office of Pep co Services Newco, Inc. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.
Article II MEETING OF SHAREHOLDERS
Section 1. The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article. Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chaim1an of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof. Section 3. Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.
	Article III DIRECTORS
Section 1. The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided. Section 2. A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors. Section 3. (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. (b) Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof. (c) Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Section 4. (a) As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section of this Article. (b) Other meetings of the Board shall be held at such times and places as the Board, the Chairn1an of the Board or the President shall from time to time determine. (c) The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. (d) The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. Section 5. The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board. Section 6. Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee. Section 7. Anyone or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. Section 8. The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and :fix the time and place of its meetings unless the Board shall otherwise provide. Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
	ARTICLE IV INDEMNIFICATION
With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.
	Article V OFFICERS
Section 1. The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person. Section 2. The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. Section 3. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perfom1 such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.
	Article VI CERTIFICATES OF STOCK
Section 1. The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue. Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. Section 3. No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.
Article VII CHECKS, NOTES, CONTRACTS, ETC.
All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize. All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary. Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.
	Artic1e VIII FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.
	Article IX AMENDMENTS
Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

NORTH CAROLINA Department of the Secretary of State
To all whom these presents shall come, Greetings: I, ELAINE F. MARSHALL, Secretary of State of the State of North Carolina, do hereby certify the following and hereto attached to be a true copy of
ARTICLES OF RESTATEMENT OF MICROCELL CORPORATION
the original of which is now on file and a matter of record in this office.
IN W1TNESS WHEREOF, I have hereunto set my hand and affixed my official seal at the City of Raleigh, this 26th day of October, 2001. /s/ Elaine F. Marshall Secretary of State Certification Number: 5766884-1 Ref. # 4692756
AMENDMENT AND RESTATEMENT OF ARTICLES OF INCORPORATION MICROCELLCORPORATION
Pursuant to Section 55-l0-07 of the General Statues of North Carolina, the undersigned corporation hereby submits the following for the purpose of amending and restating its Articles of Incorporation and does hereby certify as follows: 1. The name of the corporation is Microcell Corporation. 2. The corporation's Articles of Incorporation are hereby amended and restated in their entirety, as set forth in the text of the Amended and Restated Articles of Incorporation attached hereto as Exhibit A. which contain amendments to the Articles of Incorporation that require shareholder approval. 3. The Amended and Restated Articles of Incorporation of the corporation were adopted by its shareholders on the 24 ^th day of October 2001, as required by the North Carolina Business Corporation Act and in the manner prescribed by law. 4. These Amended and Restated Articles of Incorporation will be effective upon filing. IN WITNESS WHEREOF, the corporation has caused these Amended and Restated Articles of Incorporation to be signed by Ray Eshraghi, its President, this 25 ^th day of October 2001. MICROCELL CORPORATION By: /s/ Ray Eshraghi President
EXHIBIT A AMENDED AND RESTATED ARTICLES OF INCORPORATION OF MICROCELL CORPORATION ARTICLE I.
The name of the corporation is Microcell Corporation (the "Corporation").
ARTICLE II.
The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under Chapter 55 of the General Statutes of North Carolina.
ARTICLE III.
The street address and county of the current registered office in the State of North Carolina are 105 Scots Fir Lane, Carr, Wake County, North Carolina 27511, and the name of the current registered agent at such address is Ray Eshraghi. The mailing address of the registered office of the Corporation is the same as its street address.
ARTICLE IV.
The Corporation is authorized to issue a total of Twenty Million (20,000,000) shares, $.001 par value per share. Eighteen Million One Hundred Fifty Thousand (18,150,000) of such shares are designated "Common Stock" and One Million Eight Hundred Fifty Thousand (1,850,000) are designated "Preferred Stock," of which Eight Hundred Fifty Thousand (850,000) are designated "Series A Preferred Stock" and One Million (1,000,000) are designated "Series B Preferred Stock." The Series A Preferred Stock and Series B Preferred Stock shall have the rights, preferences, privileges and restrictions set forth in the succeeding provisions of this Article N. A. Dividends. The holders of the Series A Preferred Stock shall be entitled, when and if declared by the Board of Directors, consistent with North Carolina law, to cash dividends and distributions out of funds of the Corporation legally available for that purpose. The holders of the Series B Preferred Stock shall be entitled, when and if declared by the Board of Directors, consistent with North Carolina law, to cash dividends and distributions out of funds of the Corporation legally available for that purpose. With respect to the declaration, payment and setting apart of dividends, other than in Common Stock, whether of cash, securities of other persons, evidences of indebtedness, assets, Convertible Securities (as defined below), Stock Purchase Rights (as defined below) or rights to acquire any of the above, the holders of Preferred Stock- shall be entitled to participate with the Common Stock and receive, before any dividends shall be declared and paid upon or set aside for the Common Stock, the same dividends or distributions, on an as- converted basis, as are proposed to be distributed to the holders of Common Stock. Each share of Preferred Stock shall be treated for purposes of such participation as being equal to the number of shares of Common Stock (which may be a fraction) into which such share could then be converted. The rights of the holders of Preferred Stock with respect to dividends of Common Stock are set forth in Section E ( I) of this Article IV. B. Preference on Liquidation 1. Upon the occurrence of any Liquidating Event (as defined below), each holder of Series A Preferred Stock and Series B Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Corporation available for distribution to its shareholders, before any payment shall be made in respect of the Corporation's Common Stock or other series of preferred stock then in existence that is outstanding and junior to the Series A Preferred Stock and Series B Preferred Stock, the following preferential amounts. The holders of Series A Preferred Stock shall receive pari passu with the holders of Series B Preferred Stock, an amount equal to $0.30 (the "Series A Original Price") per share of Series A Preferred Stock, subject to equitable adjustment for any stock splits, combinations, consolidations, recapitalizations, reorganizations, reclassifications, stock distributions, stock dividends or other similar events with respect to such share, plus all declared but unpaid dividends on such share (the "Series A Preferential Amount"). The holders of Series B Preferred Stock shall receive pari passu with the holders of Series A Preferred Stock, an amount equal to $3.15 (the "Series B Original Price") per share of Series B Preferred Stock, subject to equitable adjustment for any stock splits, combinations, consolidations, recapitalizations, reorganizations, reclassifications, stock distributions, stock dividends or other similar events with respect to such share, plus all declared but unpaid dividends on such share (the "Series B Preferential Amount"). If upon the occurrence of a Liquidating Event, the assets of the Corporation available for distribution to its shareholders shall be insufficient to pay the holders of the Series A Preferred Stock and Series B Preferred Stock the full Series A Preferential Amount or Series B Preferential Amount, as the case may be, to which they shall be entitled, the holders of Series A Preferred Stock and Series B Preferred Stock shall share ratably in any distribution of the remaining assets according to the amounts that would be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to said shares were paid in full. 2. In the event of any Liquidating Event, and subject to the payment in full of the Series A Preferential Amount and Series B Preferential Amount, the entire remaining assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of Common Stock, Series A Preferred Stock and Series B Preferred Stock based upon the number of shares of Common Stock then held by them (as described in the following sentence). For the purposes of this subparagraph 2, (i) the holders of the Series A Preferred Stock shall be considered holders of the number of shares of Common Stock as such holder would be entitled to receive if such shares of Series A Preferred Stock held by such holder were converted to Common Stock, as set forth in Section D herein, and (ii) the holders of the Series B Preferred Stock shall be considered holders of the number of shares of Common Stock as such holder would be entitled to receive if such shares of Series B Preferred Stock held by such holder were converted to Common Stock, as set forth in Section D herein. 3. Written notice of any such Liquidating Event stating a payment date, the place where such payment shall be made, the amount of each payment in liquidation and the amount of dividends to be paid shall be given by first class mail, postage prepaid, not less than 30 days prior to the payment date stated therein, to each holder of record of Preferred Stock at such holder's address as shown in the records of the Corporation, provided that any holder of Preferred Stock may convert its shares of Preferred Stock to Common Stock during such period at any time prior to the payment date stated in such notice. 4. A "Liquidating Event" shall mean (i) any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, or (ii) a sale, transfer or other disposition of substantially all the assets of the Corporation to, or a merger or consolidation into, an entity that is not controlled, directly or indirectly, by the shareholders of the Corporation; for purposes of this definition, "control' shall mean ownership of more than fifty percent of the voting power of an entity; provided, however, if the holders of a majority of the shares of Preferred Stock so elect by giving written notice to the Corporation before the effective date of a merger or consolidation or the sale of substantially all the assets of the Corporation that would otherwise be a Liquidating Event as defined herein, such merger, consolidation or sale shall not be deemed a Liquidating Event and the provisions of Subsection D.7 shall apply. The amount deemed distributed to the holders of F- Preferred Stock upon any such merger, consolidation or sale shall include the cash or the value of the property rights or securities distributed to such holders by the acquiring person, firm or other entity. The value of such property, rights or other securities shall be determined in good faith by the Board of Directors of the Corporation and such determination shall be binding upon the holders of Preferred Stock, except that any securities to be delivered to the holders of the Preferred Stock upon any such merger, consolidation or sale shall be valued as follows: a. Securities not subject to investment letter or other similar restrictions on free marketability:
	(i) If traded on a securities exchange or the NASDAQ National Market System, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the 30-day period ending three (3) days prior to the closing; (ii) If actively traded over-the-counter, the value shall be deemed to be the average of the last sale prices over the 30-day period ending three (3) days prior to the closing; and (iii) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors of the Corporation.
b. The method of valuation of securities subject to investment letter or other restrictions on free marketability shall be to make an appropriate discount from the market value determined as above in Section B.4.a. to reflect the approximate fair market value thereof, as determined in good faith by the Board of Directors of the Corporation. C. Voting. 1. Generally. Except as otherwise expressly provided herein or as required by law, the holder of each share of Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Preferred Stock could then be converted and shall have voting rights and powers equal to the voting rights and powers of the Common Stock (except as otherwise expressly provided herein or as required by law, voting together with the Common Stock as a single class) and shall be entitled to notice of any shareholders' meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares of Common Stock into which shares of Preferred Stock held by each holder could be converted) shall be reduced to the nearest whole number. 2. Voting for the Election of Directors. The number of directors of the Corporation shall be set in accordance with the corporation's Bylaws. For so long as at least 100,000 shares of Series A Preferred Stock remain outstanding (as adjusted for any combinations, consolidations, recapitalizations, stock splits, stock dividends and the like with respect to such shares), the holders of the Series A Preferred Stock shall be entitled, voting as a separate class, to elect one director of the Corporation at each meeting of the shareholders held for the election of directors, or upon the taking of a written consent of shareholders for such purpose. For so long as at least 100,000 shares of Series B Preferred Stock remain outstanding (as adjusted for any combinations, consolidations, recapitalizations, stock splits, stock dividends and the like with respect to such shares), the holders of the Series B Preferred Stock shall be entitled, voting as a separate class, to elect one director of the Corporation at each meeting of the shareholders held for the election of directors, or upon the taking of a written consent of shareho1ders for such purpose. All remaining directors of the Corporation shall be elected by the holders of Common Stock, voting together as a single class. In the case of any vacancy (other than a vacancy caused by removal by vote of the shareholders in accordance with applicable law) in the office of a director occurring among the directors elected by the holders of a class of stock (if any) pursuant to this Section C.2, the remaining directors so elected by that class may, by affirmative vote of a majority thereof (or the remaining director so elected if there be but one, or if there are no such directors remaining, by the affirmative vote of the holders of a majority of the shares of that class), elect a successor or successors to hold office for the unexpired term of the director or directors whose place or places shall be vacant. Any director who shall have been elected by the holders of a class of stock (if any) or by any directors so elected as provided in the immediately preceding sentence hereof may be removed during the aforesaid term of office, either with or without cause, by, and only by, the affirmative vote of the holders of the shares of the class of stock entit1ed to elect such director or directors, given either at a special meeting of such shareholders du1y called for that purpose or pursuant to a written consent of shareholders, and any vacancy thereby created may be fil1ed by the holders of that class of stock represented at a meeting or pursuant to written consent. D. Conversion Rights Each share of Preferred Stock shall be conveI1ib1e at the option of the holder thereof, at any time after the issuance of such share, into fully paid and nonassessable shares of Common Stock of the Corporation. The number of shares of Common Stock into which each share of the Series A Preferred Stock may be converted shall be determined by dividing the Series A Original Price by the Series A Conversion Price (determined as hereinafter provided) in effect at the time of the conversion. The number of shares of Common Stock into which each share of the Series B Preferred Stock may be converted shall be determined by dividing the Series B Original Price by the Series B Conversion Price (determined as hereinafter provided) in effect at the time of the conversion. 1. The Conversion Price of the Series A Preferred Stock, before any adjustment is required pursuant to Section E, shall be equal to the Series A Original Price. The Conversion Price of the Series B Preferred Stock, before any adjustment is required pursuant to Section E, shall be equal to the Series B Original Price. 2. The holder of any shares of Preferred Stock may exercise the conversion rights as to such shares or any part thereof by delivering to the Corporation during regular business hours, at the office of any transfer agent of the Corporation for the Preferred Stock, or at the principal office of the Corporation or at such other place as may be designated by the Corporation, the certificate or certificates for the shares to be converted, duly endorsed for transfer to the Corporation or accompanied by a written instrument or instruments of transfer (if required by it), accompanied by written notice stating that the holder elects to convert all or a number of such shares represented by the certificate or certificates. Conversion shall be deemed to have been effected on the date when such delivery is made, and such date is referred to herein as the "Conversion Date." As promptly as practicable thereafter the Corporation shall issue and deliver to such holder, at such office or other place designated by the Corporation, a certificate or certificates for the number of full shares of Common Stock to which such holder is entitled and a check for cash with respect to any fractional interest in a share of ComnI0n Stock as provided in Subsection 0.3. The holder shall be deemed to have become a shareholder of record of the Common Stock on the applicable Conversion Date. Upon conversion of only a portion of the number of shares of Preferred Stock represented by a certificate surrendered for conversion, the Corporation shall issue and deliver to the holder of the certificate so surrendered for conversion, at the expense of the Corporation, a new certificate representing the number of shares of Preferred Stock not so converted. 3. No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Preferred Stock. If more than one share of Preferred Stock shall be surrendered for conversion at anyone time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Preferred Stock so surrendered. Instead of any fractional shares of Common Stock that would otherwise be issuable upon conversion of any shares of Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest equal -to the fair market value of such fractional interest as determined in good faith by the Corporation's Board of Directors. 4. The Corporation shall pay any and all issue and other issuance related taxes that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax that may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the Preferred Stock so converted was registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax: has been paid. 5. The Corporation shall at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of Preferred Stock, the full number of shares of Common Stock deliverable upon the conversion of all Preferred Stock from time to time outstanding. The Corporation shall from time to time use its best efforts to obtain necessary director and shareholder approvals, in accordance with the laws of the State of North Carolina, to increase the authorized amount of its Common Stock if at any time the authorized amount of its Common Stock remaining unissued shall not be sufficient to permit the conversion of all of the shares of Preferred Stock at the time outstanding, and shall take all such actions as are necessary to increase such authorized amount of Common Stock upon obtaining such approvals. Before taking any action that would cause an adjustment reducing the Preferred Stock Conversion Prices below the then par value of the shares of Common Stock issuable upon the conversion of Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Prices. 6. If the Common Stock issuable upon the conversion of Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares or stock dividend provided for in Section E.l), then and in each such event the holder of each share of Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, or other change, by holders of the number of shares of Common Stock into which such shares of Preferred Stock might have been converted immediately prior to such reorganization, reclassification, or change. 7. In case of any consolidation or merger of the Corporation with or into another corporation or the sale of all or substantially all of the assets of the Corporation to another corporation (other than a consolidation, merger or sale treated as a Liquidating Event pursuant to Section B.4 above), each share of Preferred Stock shall thereafter be convertible into the kind and amount of shares of stock or other securities or property that a holder of the number of shares of Common Stock of the Corporation deliverable upon conversion of Preferred Stock would have been entitled upon such consolidation, merger or sale; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions in Section E set forth with respect to the rights and interest thereafter of the holders of Preferred Stock, to the end that the provisions set forth in Section E shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the conversion of Preferred Stock. 8. If any shares of Common Stock to be reserved for the purpose of conversion of shares of Preferred Stock require registration or listing with, or approval of, any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise, before such shares may be validly issued or delivered upon conversion, the Corporation will in good faith and as expeditiously as possible endeavor to secure such registration, listing or approval, as the case may be. 9. All shares of Common Stock that may be issued upon conversion of the shares of Preferred Stock will upon issuance by the Corporation be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof. 10. In case any shares of Preferred Stock shall be converted pursuant to Sections D or F hereof, the shares so converted shall be cancelled and shall thereafter be subject to reissuance by the Corporation. 11. The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation. but will at all times in good faith assist in the carrying out of all of the provisions of this Section D and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of the Preferred Stock against impairment. E. Adjustment of Conversion Prices The Conversion Prices from time to time in effect shall be subject to adjustment from time to time as follows. 1. Stock Splits, Dividends and Combinations. In case the Corporation shall at any time subdivide the outstanding shares of Common Stock or shall issue a dividend in Common Stock on its outstanding Common Stock without a corresponding adjustment with respect to the Preferred Stock, the applicable Conversion Price for such series of Preferred Stock in effect immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and in case the Corporation shall at any time combine the outstanding shares of Common Stock into a lesser number of shares of Common Stock without a corresponding adjustment with respect to the Preferred Stock. The applicable Conversion Price for such series of Preferred Stock in effect immediately prior to such combination shal1 be proportionately increased, concurrently with the effectiveness of such subdivision, dividend or combination, as the case may be. 2. Noncash Dividends. Stock Purchase Rights, Capital Reorganizations and Dissolutions. In case: a. the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or any other distribution, other than distributions payable in cash, or subdivisions or combinations of the Corporation's outstanding shares of Common Stock; or b. the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase any shares of stock of any class or to receive any other rights; or c. of any capital reorganization of the Corporation, reclassification of the capital stock of the Corporation (other than a subdivision or combination of its outstanding shares of Common Stock), consolidation or merger of the Corporation with or into another corporation, which transaction is not a Liquidating Event. or of the conveyance of all or substantially all of the assets of the Corporation to another corporation, which transaction is not a Liquidating Event; then, and in any such case, the Corporation shall cause to be mailed to the holders of record of the outstanding Preferred Stock, at least ten (10) days prior to the date hereinafter specified, a notice stating the date on which (i) a record is to be taken for the purpose of such dividend, distribution or rights or (ii) such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up. 3. Issuances at Less Than the Conversion Price. Upon the issuance or sale by the Corporation of: a. Common Stock for a consideration per share less than any Conversion Price in effect immediately prior to the time of such issue or sale; or b. any Stock Purchase Rights, the consideration per share for which shares of Common Stock may at any time thereafter be issuable upon exercise thereof (or, in the case of Stock Purchase Rights exercisable for the purchase of Convertible Securities, upon the subsequent conversion or exchange of such Convertible Securities) at a purchase price less than any Conversion Price in effect immediately prior to the time of the issue or sale of such Stock Purchase Rights; or c. any Convertible Securities, the consideration per share for which shares of Common Stock may at any time thereafter be issuable pursuant to the terms of such Convertible Securities at a purchase price less than any Conversion Price in effect immediately prior to the time of the issue or sale of such Convertible Securities; other than an issuance of Common Stock pursuant to Subsections E.l or E.6 hereof; then forthwith upon such issue or sale, the Conversion Price shall be reduced to a price (calculated to the nearest cent) determined by the following formula:
N + C CP = CP * N + AS where:
		CP* = the Conversion Price of the affected series of Preferred Stock as so adjusted; CP = the former Conversion Price of the affected series of Preferred Stock; N = the number of shares of Common ~tock outstanding immediately prior to such issuance (or deemed issuance) assuming exercise or conversion of all outstanding securities exercisable for or convertible into Common Stock; C = the number of shares of Common Stock that the aggregate consideration received or deemed to be received by the Corporation for the total number of additional securities so issued or deemed to be issued would purchase if the purchase price per share were equal to the then existing Conversion Price of the affected series of Preferred Stock; AS = the number of shares of Common Stock so issued or deemed to be issued.
Notwithstanding the foregoing, no Conversion Price shall be so reduced at such time if the amount of such reduction would be an amount less than $.001, but any such amount shall be carried forward and deduction with respect thereto made at the time of and together with any subsequent reduction that, together with such amount and any other amount or amounts so carried forward shall aggregate $.00 I or more. 4. Definitions. For purposes of Subsection E.3, the following provisions will be applicable.
		a. "Convertible Securities" shall mean evidences of indebtedness, shares of stock (including, without limitation, the Preferred Stock) or other securities that are convertible into or exchangeable for, with or without payment of additional consideration, shares of Common Stock. b. "Stock Purchase Rights" shall mean any warrants, options or other rights to subscribe for, purchase or otherwise acquire any shares of Common Stock or any Convertible Securities. c. Convertible Securities and Stock Purchase Rights shall be deemed outstanding and issued or sold at the time of such issue or sale.
5. Determination of Consideration. The consideration deemed to be received by the Corporation for the issuance, sale or grant of shares of Common Stock, Stock Purchase Rights or Convertible Securities, irrespective of the accounting treatment of such consideration, shall be valued as follows. a. Cash Payment. In the case of cash, the net amount received by the Corporation after deduction of any accrued interest or dividends and before deducting any expenses paid or incurred and any underwriting commissions or concessions paid or allowed by the Corporation in connection with such issue or sale. b. Noncash Payment. In the case of consideration other than cash, the value of such consideration, which shall not include the value of any Convertible Securities being converted or exchanged, as determined by the Board of Directors in good faith, after deducting any accrued interest or dividends. c. Stock Purchase Rights and Convertible Securities. The consideration deemed received by the Corporation upon the issuance or sale of any Stock Purchase Rights or Convertible Securities shall be the total consideration, if any, received by the Corporation as consideration for the Stock Purchase Rights or the Convertible Securities, as the case may be, plus the aggregate amount of additional consideration, if any, payable to the Corporation upon the exercise of such Stock Purchase Rights or upon the conversion or exchange of such Convertible Securities, as the case may be, in each case after deducting any accrued interest or dividends. d. Readjustment of Conversion Price. In the event of any change in (i) the consideration, if any, payable upon exercise of any Stock Purchase Rights or upon the conversion or exchange of any Convertible Securities or (ii) the rate at which any Convertible Securities are convertible into or exchangeable for shares of Common Stock, the applicable Conversion Prices as computed upon the original issue thereof shall forthwith be readjusted to the Conversion Prices that would have been in effect at such time had such Stock Purchase Rights or Convertible Securities provided for such changed purchase price, consideration or conversion rate, as the case may be, at the time initially granted, issued or sold. On the expiration of any Stock Purchase Rights not exercised or of any right to convert or exchange under any Convertible Securities not converted, the applicable Conversion Prices then in effect shall forthwith be increased to the Conversion Prices that would have been in effect at the time of such expiration had such Stock Purchase Rights or Convertible Securities never been issued. No readjustment of any Conversion Price pursuant to this paragraph (d) shall (i) increase the applicable Conversion Price by an amount in excess of the adjustment originally made to the Conversion Price in respect of the issue, sale or grant of the applicable Stock Purchase Rights or Convertible Securities or (ii) require any adjustment to the amount paid or number of shares of Common Stock received by any holder of Preferred Stock upon any conversion of any share of Preferred Stock prior to the date upon which such readjustment to the Conversion Price shall occur. e. Upon the occurrence of each adjustment or readjustment of any Conversion Price pursuant to this Section E, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms thereof, and prepare and furnish to each holder of the series of Preferred Stock affected thereby a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon written notice at any time issue a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price of the series of Preferred Stock affected at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other property that at the time would be received upon the conversion of such holder's shares. 6. Exclusions. Anything herein to the contrary notwithstanding, the Corporation shall not be required to make any adjustment of any Conversion Price in the case of (i) the waiver of any such adjustment by the holders of at least a majority of the shares of Preferred Stock, (ii) the issuance or sale of shares of Common Stock upon exercise of stock options or warrants outstanding on the date of filing of these Amended and Restated Articles of Incorporation, (iii) the sale of up to One Million (1,000,000) shares (as adjusted for any combinations, consolidations, recapitalizations, stock splits, stock dividends and the like) of Common Stock, or the issuance of options to purchase up to such number of shares, or any combination thereof, to employees, officers, directors and/or consultants of the Corporation provided that the sales or issuances are approved by the Company's Board of Directors; or (iv) the issuance of Common Stock upon conversion of Preferred Stock. The issuances or sales described in the preceding clauses (i), (ii), (iii) and (iv) shall be ignored for purposes of calculating any adjustment to any Conversion Price. F. Mandatory Conversion Each share of Preferred Stock shall automatically be converted into shares of Common Stock, at the then applicable conversion rate, upon (a) the effectiveness of the Corporation's initial registration statement for the sale of its shares of Common Stock in a firm commitment underwritten public offering registered under the Securities Act, of 1933, as amended, with net proceeds to the Corporation of at least $10,000.000, or (b) election by holders of at least two-thirds (2/3) of the then outstanding Preferred Stock. All holders of record of shares of Preferred Stock will be given at least twenty (20) days' prior written notice of the date fixed for mandatory conversion of the Preferred Stock and the event causing the mandatory conversion of the Preferred Stock into Common Stock. Such notice shall be sent by first class mail, postage prepaid, to each holder of record of Preferred Stock at such holder's address as shown in the records of the Corporation. On or before the date so fixed for conversion, each holder of shares of the Preferred Stock shall surrender the certificate or certificates for all such shares to the Corporation at the place designated in such notice and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled. The mechanics for conversion and other provisions relating to conversion of Preferred Stock into Common Stock set forth elsewhere in these Amended and Restated Articles of Incorporation shall apply to the mandatory conversion of the Preferred Stock. Notwithstanding the foregoing, from and after the conversion date all outstanding certificates for the Preferred Stock shall represent only the right to receive the shares of Common Stock into which such certificate is convertible pursuant to this section.
ARTICLE V.
For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation, of its directors and of its shareholders or any class thereof, as the case may be, it is further provided that: A. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. B. Except as otherwise provided in these Amended and Restated Articles of Incorporation, the Board of Directors may from time to time make, amend, supplement or repeal the Bylaws; provided, however, that the shareholders may change or repeal any Bylaw adopted by the Board of Directors by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation (considered for this purpose as one class), except as otherwise provided in these Amended and Restated Articles of Incorporation. No amendment or supplement to the Bylaws adopted by the Board of Directors shall vary or conflict with any amendment or supplement thus adopted by the shareholders. C. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.
ARTICLE VI.
Except to the extent that the North Carolina General Statutes prohibit such limitation or elimination of liability of directors for breaches of duty, no director of the Corporation shall be liable to the Corporation or to any of its shareholders for monetary damages for breach of duty as a director. No amendment to or repeal of this provision or adoption of a provision inconsistent herewith shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal or adoption of an inconsistent provision. The provisions of this Article shall not be deemed to limit or preclude indemnification of a director by the .corporation for any liability that has not been eliminated by the provisions of this Article.

BYLAWS OF MICROCELL CORPORATION ARTICLE 1 OFFICES
Section 1.1 Principal Office . The principal office of the Corporation shall be located at such place, within or without the State of North Carolina, as may be determined from time to time by the Board of Directors. Section 1.2 Registered Office . The Corporation shall maintain a registered office as required by the North Carolina Business Corporation Act, as amended from time to time (the "Act"), at a location in the State of North Carolina designated by the Board of Directors from time to time. The registered office of the Corporation may, but need not be, identical with the principal office of the Corporation. Section 1.3 Other Offices . The Corporation may have such other offices within and without the State of North Carolina as the business of the Corporation may require from time to time. The authority to establish or close such other offices may be delegated by the Board of Directors to one or more of the Corporation's officers.
ARTICLE 2 MEETINGS OF SHAREHOLDERS
Section 2.1 Place of Meetings . All meetings of shareholders shall be held at the principal office of the Corporation, or at such other place, either within or without the State of North Carolina, as shall in each case be (a) fixed by the President, the Secretary, the Chairman of the Board, or the Board of Directors and designated in the notice of meeting, or (b) agreed upon by a majority of the shareholders entitled to vote at the meeting. Section 2.2 Annual Meetings . The annual meeting of the Corporation's shareholders shall be held on the first Monday in May in each year beginning with the year 2000, at the hour of 1:00 P.M., for the purpose of electing Directors and for the transaction of such other business as may properly come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of North Carolina, then such annual meeting shall be held on the next succeeding business day. If the annual meeting shall not be held on the day designated by these Bylaws for the annual meeting of shareholders, or at any adjournment thereof, then a substitute annual meeting may be called in accordance with Section 2.3 of these Bylaws, and the meeting so called may be designated as the annual meeting. Section 2.3 Special Meetings . Special meetings of the Corporation's shareholders may be called for any one or more lawful purposes by the Corporation's President, Secretary, Chairman of the Board, the Board of Directors, or otherwise as authorized by the Act. Only business within the purpose or purposes described in the notice of the meeting may be conducted at a special meeting of shareholders. Section 2.4 Notice of Meetings . Written or printed notice of all meetings of shareholders shall be delivered not less than ten (10) nor more than sixty (60) days before the meeting date, to all shareholders of record (determined pursuant to Section 9.6 of these Bylaws) entitled to vote at such meeting, and to such other persons as the Corporation is required to notify pursuant to the Act or the Corporation's Articles of Incorporation. The notice shall state the date, time, and place of the meeting and, in the case of a special meeting, the purpose or purposes for which such meeting was called. Section 2.5 Shareholders' List . Not later than two (2) business days after the date notice of a meeting of shareholders is first given, the Secretary or other officer or person having charge of the stock transfer books of the Corporation shall prepare an alphabetical list of the shareholders entitled to notice of such meeting, with the address of and number of shares held by each, arranged by voting group and by class or series of shares within each voting group, which list shall be kept on file at the principal office of the Corporation, or at a place in the city where the meeting is to be held and identified in the notice of meeting, for the period commencing two (2) business days after notice of the meeting is first given and continuing through such meeting, and which list shall be available for inspection by any shareholder, or his or her agent or attorney, upon his or her demand, at any time during regular business hours. This list shall also be produced and kept open at the time and place of the meeting and shall be subject to inspection by any shareholder, or his or her attorney, during the whole time of the meeting and any adjournment thereof. Section 2.6 Quorum . Except as may otherwise be required by the Act or the Corporation's Articles of Incorporation, at any meeting of shareholders the presence of the holders of a majority of the outstanding shares entitled to vote thereat shall constitute a quorum for the transaction of any business properly before the meeting. Shares entitled to vote as a separate voting group on a matter may take action at a meeting only if a quorum of the shares in the separate voting group are present at the meeting. In the absence of a quorum a meeting may be adjourned from time to time, in accordance with the provisions concerning adjournments contained in Section 2.9 of these Bylaws, by the holders of a majority of the shares represented at the meeting. Upon the proper resumption of any such adjourned meeting a quorum of shareholders may transact any business as might have been properly transacted at the original meeting. Section 2.7 Organization . Each meeting of shareholders shall be presided over by the Chairman of the Board, or, in the absence or at the request of the Chairman of the Board, by the President, or, in the absence or at the request of the President, by such other officer as the Board of Directors may designate, or in their absence and in the absence of such designation, by any person selected to preside by plurality vote of the shares represented and entitled to vote at the meeting, with each share having the same number of votes to which it would be entitled on any other matter on which all shares represented and entitled to vote at the meeting would be entitled to vote. The Secretary, or in the absence or at the request of the Secretary, any person designated by the person presiding at the meeting, shall act as secretary of the meeting. Section 2.8 Voting . (a) Except as may otherwise be required by the Act or the Corporation's Articles of Incorporation, and subject to the provisions concerning shareholders of record contained elsewhere in these Bylaws, a person present at a meeting of shareholders shall be entitled to one (1) vote for each share of voting stock as to which such person is the shareholder of record. (b) Except in the election of Directors as governed by Section 3.3 of these Bylaws, if a quorum of a voting group exists, action on a matter by such voting group is approved by such voting group if the votes cast within such voting group favoring the action exceed the votes cast within such voting group opposing the action, unless a greater number of affirmative votes is required by the Act or the Corporation's Articles of Incorporation or these Bylaws. As used in these Bylaws, the term "voting group" has the meaning ascribed to that term in the Act. So long as the Corporation shall have only one (1) class of shares outstanding and the voting rights of all shares of such class are identical, then all such outstanding shares shall constitute a single voting group and the sole voting group, except to the extent that the Act or the Corporation's Articles of Incorporation requires that any of such shares be treated as a separate voting group. Section 2.9 Adjournments . A majority of the voting shares held by shareholders of record present at a meeting of shareholders may adjourn a meeting from time to time to a date, time, and place fixed by notice as provided for above or, if such date is less than thirty (30) days from the date of adjournment, to a date, time, and place fixed by the majority and announced at the original meeting prior to adjournment. Section 2.10 Action Without Meeting . Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action must be evidenced by one (1) or more written consents signed by all of the shareholders entitled to vote with respect to the subject matter thereof before or after such action, describing the action and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Section 2.11 Voting Agreements . No shareholder shall enter into a voting trust agreement or any other type of agreement vesting in another person the authority to exercise the voting power of any or all of his stock.
ARTICLE 3 DIRECTORS
Section 3.1 Authority . All corporate power of the Corporation shall be exercised by or under the authority of, and the business and affairs of the Corporation managed under the direction of, the Board of Directors. Section 3.2 Number, Tenure and Qualification . The Corporation shall have from one (1) to five (5) Directors, as determined by the Incorporator or, after the initial appointment of directors, the Board of Directors from time to time. The election of the Directors by the shareholders shall be held at each annual meeting of the Corporation's shareholders. Each Director shall hold office until his successor shall have been duly elected and qualified, or until his earlier removal, resignation, death, or incapacity. Section 3.3 Election . Directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election of Directors at a meeting at which a quorum is present. Section 3.4 Removal . Except as otherwise provided in the Articles of Incorporation or the Act, any Director may be removed from office, with or without cause, by a vote of the holders of a majority of the shares of the Corporation's voting stock. Any Director may be removed from office with cause by a majority vote of the Board of Directors at a meeting at which only the removal and replacement of the Director or Directors in question shall be considered. Section 3.5 Vacancies . A vacancy occurring in the Board of Directors, including positions not filled by the shareholders or those resulting from an increase in the number of Directors, may be filled by a majority of the remaining Directors, though less than a quorum, or by the sole remaining director. The shareholders may elect a director at any time to fill any vacancy not filled by the Directors. Section 3.6 Regular Meetings . A regular meeting of the Board of Directors shall be held without notice other than this Bylaw immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may by resolution provide for the holding of additional regular meetings without notice other than such resolution; provided, however, the resolution shall fix the date, time, and place (which may be anywhere within or without the State of North Carolina) for these regular meetings. Section 3.7 Special Meetings . Special meetings of the Board of Directors may be called for any lawful purpose or purposes by the Chairman of the Board, the President or any two (2) Directors. The person calling a special meeting shall give, or cause to be given, to each Director at his business address, notice of the date, time and place of the meeting by any normal means of communication not less than two (2) days prior thereto. Section 3.8 Participation by Telecommunications . Any Director may participate in, and be regarded as present at, any meeting of the Board of Directors by means of conference telephone or any other means of communication by which all persons participating in the meeting can hear each other at the same time. Section 3.9 Quorum . Unless the Corporation's Articles of Incorporation provide otherwise, a majority of the number of Directors fixed by or pursuant to these Bylaws shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, or if no number is so fixed a majority of the number of Directors in office immediately before the meeting begins shall constitute a quorum. Section 3.10 Action . The Board of Directors shall take action adopted by the affirmative vote of a majority of the Directors present at a meeting at which a quorum is present, or the affirmative vote of a greater number of Directors where required by the Corporation's Articles of Incorporation or the Act. Section 3.11 Action Without Meeting . Any action required or permitted to be taken by the Board of Directors at an annual, regular, or special meeting may be taken without a meeting if a consent in writing, setting forth the action taken, shall be signed by all of the Directors. Section 3.12 Committees . The Board of Directors may by resolution designate and delegate authority to an Executive Committee and other committees with such authority as may be permitted by the Act. Special meetings of any committee may be called at any time by any Director who is a member of the committee or by any person entitled to call a special meeting of the full Board of Directors. Except as otherwise provided in the section, the conduct of all meetings of any committee, including notice thereof, shall be governed by Sections 3.6 through 3.11 of this Article. Section 3.13 Compensation . The Board of Directors, in its discretion, may compensate Directors for their services as such and may provide for the payment of all expenses reasonably incurred by Directors in attending meetings of the Board or of any committee or in the performance of their other duties as Directors. However, nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor.
ARTICLE 4 OFFICERS
Section 4.1 In General . The principal officers of the Corporation shall consist of a Chairman of the Board, a President, one (1) or more Vice Presidents, a Secretary and a Treasurer, or such of them as the Board of Directors may elect from time to time. Each officer shall exercise such authority and perform such duties as may be set forth in these Bylaws and any additional authority and duties as the Board of Directors shall determine from time to time. The same individual may simultaneously hold more than one (1) office, but no individual may act in more than one (1) capacity where action of two (2) or more officers is required. Section 4.2 Election, Term of Office, Qualification . Each of the principal officers of the Corporation shall be elected annually by the Board of Directors and shall hold office until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall resign, or until he shall have been removed in the manner hereinafter provided. Section 4.3 Chairman of the Board . The Chairman of the Board of Directors shall preside at the meetings of the Board of Directors and may call meetings of the Board and of any committee thereof, whenever he deems it necessary, and he shall call to order and preside at all meetings of the shareholders of the Corporation. In addition he shall have such other powers and duties as the Board of Directors shall designate from time to time. The Chairman of the Board of Directors shall have power to sign all certificates of stock, bonds, deeds and contracts of the Corporation. If the Board of Directors shall fail to elect a Chairman of the Board, the President shall serve in such capacity. Section 4.4 President . The President shall be the chief executive officer of the Corporation and, subject to the authority of the Board of Directors, shall manage the business and affairs of the Corporation. The President shall see that the resolutions of the Board of Directors are put into effect. The President shall have full authority to execute on the Corporation's behalf any and all contracts, agreements, notes, bonds, deeds, mortgages, certificates, instruments, and other documents, except as may be specifically limited by resolution of the Board of Directors. Section 4.5 Vice Presidents . Each Vice President shall have such powers and perform such duties as the Board of Directors may from time to time prescribe. The Board of Directors may elect or designate one (1) or more of the Vice Presidents as Executive Vice Presidents, Senior Vice Presidents or with such other title as the Board may deem appropriate. Section 4.6 Secretary . The Secretary shall attend all meetings of the shareholders and the Board of Directors and record the proceedings thereof. The Secretary shall give, or cause to be given, all notices in connection with such meetings. The Secretary shall be the custodian of the corporate seal and affix the seal to any document requiring it. Section 4.7 Treasurer . The Treasurer shall keep safe custody of the Corporation's funds and maintain complete and accurate books and records of account. The Treasurer shall upon request report to the Board of Directors on the financial condition of the Corporation. Section 4.8 Additional Officers . The Board of Directors may elect or appoint such additional officers as it may deem necessary or advisable, and may delegate the power to appoint such additional officers to any committee or principal officer. Such additional officers shall have such powers and duties, and shall hold office for such terms, as may be determined by the Board or such committee or officer. Section 4.9 Removal . Except as may otherwise be provided by law or in the Articles of Incorporation, any officer may be removed by the Board of Directors with or without cause at any time. Section 4.10 Salaries . The salaries of the officers shall be fixed from time to time by the Board of Directors. No officer shall be prevented from receiving a salary by reason of the fact that he is also a Director of the Corporation.
ARTICLE 5 CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 5.1 Contracts . The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 5.2 Loans . No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors, and such authority may be general or confined to specific instances. Section 5.3 Checks, Drafts, etc . All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by the officer or officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. Section 5.4 Deposits . All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select.
ARTICLE 6 SHARES
Section 6.1 Certificates for Shares . Certificates representing shares of the Corporation shall be in the form approved by the Board of Directors and shall be signed, either manually or in facsimile, by the Chairman of the Board, the President or a Vice President, and by the Secretary or an Assistant Secretary. All certificates for shares shall be consecutively numbered. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issuance, shall be entered on the stock transfer books of the Corporation. Section 6.2 Stock Records . A record shall be maintained by the Corporation of all shareholders of the Corporation which shows the place of residence of each shareholder, the number of shares held by each shareholder, and the date upon which each certificate for shares is issued. Transfers of the shares of the Corporation shall be made on the books of the Corporation at the direction of the record holder thereof or his attorney thereunto duly authorized by a power of attorney duly executed and filed with the Secretary, and the surrender of the certificate or certificates for such shares properly endorsed. The Corporation shall be entitled to treat the holder of record of any share or shares as the holder and owner thereof, and the Corporation shall not be bound to recognize any legal, equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of North Carolina. Section 6.3 Lost Certificates . The Board of Directors may authorize the issuance of a new share certificate in place of a certificate claimed to have been lost, destroyed or wrongfully taken, upon receipt of an affidavit of such fact from the person claiming the loss or destruction. When authorizing such issuance of a new certificate, the Board may require the claimant to give the Corporation a bond in such sum and with such sureties as it may direct to indemnify the Corporation against loss from any claim with respect to the certificate claimed to have been lost, destroyed or wrongfully taken; or the Board may, by resolution reciting that the circumstances justify such action, authorize the issuance of the new certificate without requiring such a bond with respect to a certificate claimed to have been lost or destroyed. Any such authorization by the Board of Directors may be general or confined to specific instances. Nothing herein shall require the Board of Directors to authorize the issuance of any such replacement certificate under any circumstances in which the Corporation is not required to issue such certificate, this provision being permissive and not mandatory.
ARTICLE 7 INDEMNIFICATION
Section 7.1 Right to Indemnification . Each person who was or is a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (hereinafter, a "proceeding" and including without limitation, a proceeding brought by or on behalf of the Corporation itself), by reason that he is or was a Director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or as a trustee or administrator under an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a Director or officer or in any other capacity while serving as a director, officer, partner, trustee, employee, agent, trustee or administrator, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Act as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Act permitted the Corporation to provide prior to such amendment) against all expense, liability and loss (including reasonable attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to serve in the capacity that initially entitled such person to indemnification hereunder and shall inure to the benefit of his heirs, executors and administrators; provided, however , that the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article 7 shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however , that, if the Act so requires, the payment of expenses incurred by a Director or officer in his capacity as a Director or officer (and not in any other capacity in which service was or is rendered by such person while a Director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such Director or officer, to repay all amounts so advanced if it shall ultimately be determined that the Director or officer is not entitled to be indemnified under this Section or otherwise. Section 7.2 Right of Claimant to Bring Suit . If a claim under Section 7.1 hereof is not paid in full by the Corporation within ninety (90) days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Act for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the Act, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its shareholders) that the claimant has not met the applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 7.3 Nonexclusivity of Rights . The right to indemnification and the advancement and payment of expenses conferred in this Article 7 shall not be exclusive of any other right which any person may have or hereafter acquire under any law (common or statutory), the Corporation's Articles of Incorporation, these Bylaws, any agreement, the vote of shareholders or disinterested Directors or otherwise. Section 7.4 Insurance . The Corporation may maintain insurance, at its expense, to protect itself and any person who is or was serving as a Director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a Director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise or trustee or administrator under an employee benefit plan against any liability asserted against and incurred by that person in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify that person against such liability under the Act. Section 7.5 Savings Clause . If this Article 7 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each Director and officer of the Corporation, as to costs, charges and expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative to the full extent permitted by any applicable portion of this Article 7 that shall not have been invalidated and to the full extent permitted by applicable law.
ARTICLE 8 RECORDS AND REPORTS
Section 8.1 General . (a) The Corporation shall keep all records and submit and file all reports and filings as are required by applicable law. Unless the Board of Directors otherwise directs, the Treasurer shall be responsible for keeping, or causing to be kept, all financial and accounting records of the Corporation and for submitting or filing, or causing to be submitted or filed, all reports and filings of a financial or accounting nature, and the Secretary shall be responsible for keeping, or causing to be kept, all other records and for submitting or filing, or causing to be submitted or filed, all other reports and filings. (b) The Corporation shall keep as permanent records minutes of all meetings of its incorporators, shareholders and Board of Directors, a record of all actions taken by the shareholders or Board of Directors without a meeting, and a record of all actions taken by Committees of the Board of Directors. The Corporation shall maintain appropriate accounting records. The Corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time. Section 8.2 Records at Principal Office . The Corporation shall keep a copy of the following records at the Corporation's principal office: (a) Its Articles of Incorporation or restated Articles of Incorporation and all amendments to them currently in effect. (b) Its Bylaws or restated Bylaws and all amendments to them currently in effect. (c) Resolutions adopted by the Board of Directors creating one (1) or more classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding. (d) The minutes of all shareholders' meetings, and records of all action taken by shareholders without a meeting, for the past three (3) years. (e) All written communications to shareholders generally within the past three (3) years and the financial statements required by law to be made available to the shareholders for the past three (3) years. (f) A list of the names and business addresses of its current Directors and officers. Section 8.3 Financial Statements . (a) The Corporation shall make available to the shareholders annual financial statements, which may be consolidated or combined statements of the Corporation and one (1) or more of its subsidiaries, as appropriate, that include a balance sheet as of the end of the fiscal year, an income statement for that year, and a statement of cash flows for the year unless that information appears elsewhere in the financial statements. If financial statements are prepared for the Corporation on the basis of generally accepted accounting principles, the annual financial statements shall also be prepared on that basis. (b) If the annual financial statements are reported upon by a public accountant, such accountant's report shall accompany them. If not, the statements shall be accompanied by a statement of the President or the Treasurer or other person responsible for the Corporation's accounting records:
	(i) stating his or her reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and (ii) describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.
(c) The Corporation shall mail the annual financial statements, or a written notice of their availability, to each shareholder within one hundred twenty (120) days after the close of each fiscal year; provided that the failure of the Corporation to comply with this requirement shall not constitute the basis for any claim of damages by any shareholder unless such failure was in bad faith. Thereafter, on written request from a shareholder who was not mailed the statements, the Corporation shall mail such shareholder the latest financial statements. Section 8.4 Other Reports to Shareholders . (a) If the Corporation is not a public corporation and it indemnifies or advances expenses to a Director in connection with a proceeding by or in the right of the Corporation, the Corporation shall report the indemnification or advance in writing to the shareholders with or before notice of the next shareholders' meeting. (b) If the Corporation is not a public corporation and it issues or authorizes the issuance of shares for promissory notes or for promises to render services in the future, other than in a transaction or pursuant to a plan previously approved by a majority of the shares entitled to vote thereon, the Corporation shall report in writing to the shareholders the number of shares authorized or issued, and the consideration received by the Corporation, with or before the notice of the next shareholders' meeting.
ARTICLE 9 MISCELLANEOUS
Section 9.1 Dividends . The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by the Act and the Corporation's Articles of Incorporation. The Board of Directors may fix in advance a record date for determining the shareholders entitled to a dividend. If such record date is not fixed by the Board of Directors, the date the Board of Directors authorizes such dividend shall be the record date. Section 9.2 Seal . The corporate seal of the Corporation shall consist of two (2) concentric circles between or within which are the name of the Corporation, the year of incorporation and the word "SEAL." The seal may be used by causing it or a facsimile thereof to be impressed, affixed, stamped or reproduced by any means. Any officer of the Corporation authorized to execute or attest a document on behalf of the Corporation may affix or reproduce on such document, as and for the corporate seal of the Corporation, a seal in any other form sufficient to evidence that it is intended by such officer to represent the corporate seal of the Corporation, in which case such seal shall be as effective as the corporate seal in the form herein prescribed. Section 9.3 Fiscal Year . The fiscal year of the Corporation shall be established, and may be altered, by resolution of the Board of Directors from time to time as the Board deems advisable. Section 9.4 Amendments . Except as otherwise provided in the Articles of Incorporation or the Act, these Bylaws may be amended or repealed and new bylaws may be adopted by action of the Board of Directors or shareholders. Section 9.5 Notice; Waiver of Notice . Whenever any notice is required to be given under the Act, the Corporation's Articles of Incorporation, or these Bylaws, it shall be in writing and may be communicated in person; by telephone, telegraph, teletype or other form of wire or wireless communication, or by facsimile transmission; or by mail or private carrier. If mailed, notice to a shareholder is effective when deposited in the United States mail with postage thereon prepaid and correctly addressed to the shareholder's address shown in the Corporation's current record of shareholders. All other notice is effective at the earliest of the following: (a) when received; (b) five (5) days after its deposit in the United States mail, as evidenced by the postmark, if mailed with postage thereon prepaid and correctly addressed; (c) on the date shown on the return receipt, if sent by certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee. A shareholder or Director, as the case may be, may waive notice otherwise required by these Bylaws, before or after the date stated in such notice, by delivery of a written waiver of such notice signed by such shareholder or Director to the Corporation for filing or inclusion with the minutes or corporate records, or, to the extent provided by the Act, by attendance at the meeting to which such notice relates. Section 9.6 Shareholders of Record . For the purpose of determining shareholders entitled to vote at any meeting of shareholders, or entitled to receive dividends or other distributions, or in connection with any other proper purpose requiring a determination of shareholders, the Board of Directors shall by resolution fix a record date for such determination. The date shall be not more than sixty (60) and not less than ten (10) days prior to the date on which the activity requiring the determination is to occur. The shareholders of record appearing in the stock transfer books of the Corporation at the close of business on the record date so fixed shall constitute the shareholders of record in respect of the activity in question. In the absence of action by the Board of Directors to fix a record date, the record date (unless otherwise specified in the Corporation's Articles of Incorporation or these Bylaws) shall be ten (10) days prior to the date on which the activity requiring a determination of shareholders is to occur. Section 9.7 Conflict with the Act or the Articles of Incorporation; Severability . In the event of a conflict between the Act or the Corporation's Articles of Incorporation and these Bylaws, the Act or Articles of Incorporation, as the case may be, shall prevail to the extent of such conflict. Any provision of these Bylaws, or any amendment hereto, which is determined to be in violation of the Act shall not in any way render the remaining provisions invalid.

STATE OF DELAWARE SECRETARY OF STATE DIVISON OF CORPORATIONS FILED 09:00 AM 04/24/2000 001204998 - 3216226
CERTIFICATE OF INCORPORATION OF NEXIGATE COMMUNICATIONS, INC.
The undersigned, for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:
		ARTICLE I
The name of the corporation is Nextgate Communications, Inc.
		ARTICLE II
The address of its registered office in the State of Delaware is 1013 Center Road, Wilmington, County of New Castle. The name of its registered agent at such address is Corporation Service Company.
		ARTICLE III
The nature of the business to purposes to be conducted or promoted is: To engage in any business approved by the Board of Directors for which corporations may be organized under the General Corporation Law of Delaware
		ARTICLE IV
The Corporation shall have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($l,000.00).
		ARTICLE V
The name and mailing address of the incorporator is as follows:
	NAME Leslie C. Zimberg		MAILING ADDRESS 1801 K Street NW, Suite 900 Washington, D.C. 20006
		ARTICLE VI
Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.
		ARTICLE VII
The Corporation is to have perpetual existence.
		ARTICLE VIII
In furtherance and not in limitation of the power conferred by statute, the Board of Directors shall have the power to adopt, amend, alter and repeal the By-Laws of the Corporation.
		ARTICLE IX
Meetings of stockholders may be held within or without the State of Delaware. The books of the Corporation may be kept (subject to any provision contained in the Delaware statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
		ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
		ARTICLE XI
No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) or any transaction from which the director derived an improper personal benefit.
		ARTICLE XII
The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware no existing or as such laws may hereafter be amended. I, THE UNDERSIGNED, being the incorporator hereinbefore named, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 21st day of April, 2000.
				/s/ LESLIE C.ZIMBERG Leslie C. Zimberg Incorporator

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 05/31/2000 001274877 - 3216226
CERTIFICATE OF AMENDMENT Before Payment of Capital of CERTIFICATE OF INCORPORATION of NEXTGATE COMMUNICATIONS, INC. Pursuant to Section 241 of Title 8 of the Delaware Code of 1953, as Amended
I, the undersigned, being the Sole Incorporator of the above named Corporation, a Corporation organized under and by virtue of the General Corporation Law of the State of Delaware, DO HEREBY CERTIFY: FIRST: That at a meeting of the Sole Incorporator of said Corporation, Duly held and convened, resolutions were adopted setting forth a proposed amendment to the Certificate of Incorporation of said Corporation and declaring said amendment advisable. RESOLVED that the Certificate of Incorporation of this Corporation be, and it hereby is, amended by changing Article I to read as follows: the name of the Corporation is Nextgate, Inc. SECOND: That no part of the capital of said Corporation having been paid, this certificate is filed pursuant to Section 241 of Title 8 of the Delaware Code, as amended. IN WITNESS WHEREOF, I have duly executed this Certificate of Amendment this 30 ^th day of May, 2000.
	/s/ LESLIE C. ZIMBERG Leslie C. Zimberg Sole Incorporator

BY-LAWS

OF

Nextgate, Inc.
(a Delaware Corporation)

May 30, 2000

NEXTGATE, INC.

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Nextgate, Inc. (hereinafter called the"Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

Article III

DIRECTORS

                   Section 1.     The Board of Directors of the Corporation shall consist of not less than one and not more than three persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

                   Section 2.     A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

          Section 3.     (a)   Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                               (b)   Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof.

                               (c)   Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

                    Section 4.     a)   As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section of this Article.

                               (b)   Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                               (c)   The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                               (d)   The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

                   Section 5.     The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

                    Section 6.     Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

                    Section 7.     Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by Means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

                    Section 8.     The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

                    Section 9.     Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

                    Section 1.     The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

                    Section 2.     The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

                    Section 3.     Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

                     Section 1.     The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

                    Section 2.     The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

                    Section 2.     No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

                    All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

                    All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

                    Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

ARTICLES OF INCORPORATION OF PCI AIR MANAGEMENT CORPORATION a Nevada Corporation
The undersigned natural person acting as an incorporator of a corporation under Chapter 78 of the Nevada Revised Statutes adopts the following articles of incorporation:
ARTICLE I
The name of the Corporation is PCI Air Management Corporation, a Nevada corporation (the "Corporation").
ARTICLE II
The resident agent is Sierra Corporate Services and the address and location of the registered office of the Corporation in the State of Nevada is 241 Ridge Street, 4th Floor, Reno, Nevada. 89501.
ARTICLE III
The purpose for which the Corporation is formed is to engage in any lawful activity.
ARTICLE IV
Section 1. The Corporation shall be authorized to issue 2,500 shares of capital stock with a par value of $1.00 per share. Section 2. All of the shares of stock shall be of the same class, without preference or distinction. Section 3. The capital stock of the Corporation, after the amount of capital has been paid in money, property or services, as the board of directors shall determine, shall not be subject to assessment to pay the debts of the Corporation, nor for any other purpose, and no stock issued as fully paid shall ever be assessable or assessed and the articles of incorporation shall not be amended in this respect. Section 4. Cumulative voting by any shareholder is denied. Section 5. No shareholder shall, by reason of holding shares of any class of stock, have any preemptive or preferential right to purchase or subscribe for any shares of any class of stock now or hereafter authorized or any notes, debentures or bonds convertible into or carrying options or warrants to purchase shares of any class of stock now or hereafter authorized, whether or not the issuance of any shares, notes, debentures or bonds would adversely affect the dividend or voting rights of the shareholder.
ARTICLE V
The period of existence of the Corporation is perpetual.
ARTICLE VI
The name and post office address of the incorporator is as follows:
John B. Galvin P O. Box 2670 Reno, NV 89505-2670
ARTICLE VII
The members of the governing board of the Corporation shall be designated as "directors". The board of directors shall consist of five (5) members. The number of directors of the Corporation may be increased or decreased from time to time as provided in the bylaws of the Corporation. The name and address of the sole member of the initial board of directors who shall serve as director until his successors shall have been elected and qualified are as follows: H. Lowell Davis 506 Richards Lane Alexandria, Virginia 22302 Paul F. Naughton 1058 Harriman Street Great Falls, Virginia 22066 William Dana Shapiro 1033 Broad Branch Court McLean, Virginia 22101 Gary R. Correll 900 19th Street, N.W., Suite 600 Washington, D.C. 20006 Margie Vollmann 2765 Edgewood Drive Reno, Nevada 89503
ARTICLE VII
In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by Chapter 78 of the Nevada Revised Statutes or other statutes or laws of the State of Nevada, the board of directors is expressly authorized: (i) to make, amend, alter, or repeal the bylaws of the Corporation; (ii) to adopt from time to time bylaw provisions with respect to indemnification of directors, officers, employees, agents and other persons as it shall deem expedient and in the best interests of the Corporation and to the extent permitted by law; and (iii) to fix and determine designations, preferences, privileges, rights and powers and relative, participating, optional or other special rights, qualifications, limitations or restrictions on the capital stock of the Corporation as provided by Nev. Rev. Stat. Section 78.195. unless otherwise provided herein.
ARTICLE IX
To the extent specified from time to time by the board of directors, no officer or director of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as an officer or director, excepting only (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of dividends in violation of Nev. Rev. Stat. Secton78.300. No amendment or repeal of this Article IX applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law. IN WITNESS WHFEREOF, the undersigned has hereunto set his hand and executed these Articles of Incorporation this 7 ^th day of November 1995.
	/s/ John B. Galvin John B Galvin
STATE OF NEVADA ) ) ss COUNTY OF WASHOE ) On this 7 ^th day of November, 1995, personally appeared before the undersigned, a Notary Public, in and for the County of Washoe, State of Nevada, John B. Galvin, known to me to be the person described in and who executed the foregoing instrument Galvin, known to me to bc the person described in and who executed the foregoing instrument freely and voluntarily and for the uses and purposes mentioned. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
	/s/ Marialice Bigrigg NOTARY PUBLIC Notary Public - State of Nevada Appointment Recorded in Washoe County MY APPOINTMENT EXPIRES NOV. 20, 1998

BYLAWS OF PCI AIR MANAGEMENT CORPORATION ARTICLE 1 Identification
Section 1.1. Name . The name of the Corporation is PCI Air Management Corporation. Section 1.2. Resident Office and Resident Agent . The address of the resident office of the Corporation is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501; and the name of the resident agent at this address is Sierra Corporate Services. Section 1.3. Other Offices . Branch or subordinate offices may be established by the Board of Directors. Section 1.4. Seal . The seal of the Corporation will be circular in form and mounted upon a metal die, suitable for impressing the same upon paper. Section 1.5. Fiscal Year . The fiscal year of the Corporation will be determined by resolution of the Board of Directors.
ARTICLE 2 Capital Stock
Section 2.1. Consideration for Shares . The capital stock may be issued for such consideration, expressed in dollars, not less than the par value thereof, if any, as shall be fixed from time to time by the Board of Directors. Treasury shares may be disposed of by the Corporation for such consideration expressed in dollars as may be fixed from time to time by the Board of Directors. Section 2.2. Payment for Shares . The consideration for the issuance of shares may be paid, in whole or in part, in cash, labor or services actually performed or personal property, or real estate or leases thereof; the term "personal property" may include the legally enforceable obligation of a subscriber to pay the balance of a subscription for the issuance of shares. Any shares issued shall be considered to be fully paid and nonassessable if (a) the entire amount, or (b) not less than the amount characterized as capital pursuant to NRS Section 78.270 accompanied by the legally enforceable obligation of the subscriber to pay the balance of the subscription has been received by the Corporation. The judgment of the Board of Directors as to the value of the consideration received for shares shall be conclusive as to all except the then existing shareholders for whom it shall be conclusive in the absence of actual fraud in the transaction. No certificate shall be issued for any share until the share is fully paid. Section 2.3. Certificates Representing Shares . Each holder of the capital stock of the Corporation is entitled to a certificate signed by the President or a Vice President, and the Secretary or an Assistant Secretary, certifying the number of shares owned by the shareholder in the Corporation. Section 2.4. Transfer of Stock . The Corporation will register a transfer of a stock certificate presented to it for transfer if the following conditions have been fulfilled: (a) Endorsement . The certificate is properly endorsed by the registered shareholder or by the shareholder's duly authorized agent; (b) Witnessing . The endorsement or endorsements are witnessed by one witness unless this requirement is waived by the Secretary; (c) Adverse Claims . The Corporation has no notice of any adverse claims or has discharged any duty to inquire into any adverse claims; and (d) Collection of Taxes . There has been compliance with any applicable law relating to the collection of taxes.
ARTICLE 3 The Shareholders
Section 3.1. Place of Shareholder Meetings . Meetings of the shareholders of the Corporation shall be held at the principal business office of the Corporation, 1575 DeLucchi Lane, Suite 115, Reno, Washoe County, Nevada 89502, or such other place as may be designated by the Chairman, the President or the Board of Directors, or by the written consent of all shareholders entitled to vote at the meeting given either before or after the meeting and filed with the Secretary. Section 3.2. Annual Shareholder Meeting . Unless a written consent of all of the shareholders entitled to vote at the annual meeting is filed with the Secretary in lieu of an annual meeting, the annual.shareholders' meeting shall be held at 10:00 o'clock a.m. in the principal business office of the Corporation, 1575 DeLucchi Lane, Suite 115, Reno, Washoe County, Nevada 89502, on the fifteenth day of the third month following the end of the Corporation's fiscal year, if this day is not a legal holiday, and if a holiday, then on the first following day that is not a legal holiday. In the event the annual shareholder's meeting is not held at such time and place, the Board of Directors, the Chairman of the Board of Directors, the President or shareholders holding not less than one-tenth of all the shares entitled to vote at the meeting may call the annual meeting of the shareholders. The failure to hold the annual meeting or to file the written consent in lieu thereof will not cause a forfeiture or dissolution of the Corporation. Section 3.3. Special Shareholder Meetings . Special shareholders' meetings may be called by the Board of Directors, the Chairman, the President or shareholders holding not less than one-tenth of all the shares entitled to vote at the meeting. Section 3.4. Notice of Shareholder Meetings -- Waiver . Written notice stating the place, day and hour of a shareholders' meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered not less than ten (10) days, nor more than fifty (50) days before the date of the meeting, either personally, or by mail, or by other means of written communication, charges prepaid, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each registered shareholder entitled to vote at the meeting. If mailed, the notice shall be considered to be delivered when deposited in the United States mail addressed to the shareholder at the shareholder's address as it appears on the stock transfer books of the Corporation, with postage prepaid. If a shareholder gives no address, notice shall be deemed to have been given to the shareholder if sent by mail or other written communication addressed to the place where the Corporation's principal office is located, or if published at least once in some newspaper of general circulation in the county in which the Corporation's principal office is located. Waiver by a shareholder in writing of notice of a meeting is equivalent to giving notice. Attendance by a shareholder, without objection to the notice, whether in person or by proxy, at a meeting is a waiver of notice of the meeting. Section 3.5. Shareholder Quorum . A majority of the shares entitled to vote, represented in person or by proxy, is a quorum at a shareholders' meeting. The shareholders present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 3.6. Adjourned Shareholder Meetings and Notice Thereof . Any shareholders' meeting, whether annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy, but in the absence of a quorum no other business may be transacted at any shareholders' meeting. When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. As to any adjournment of less than thirty (30) days, it shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted, other than by announcement at the meeting at which the adjournment is taken. Section 3.7. Entry of Notice . An entry in the minutes of any meeting of shareholders, whether annual or special, to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the meeting was given to all shareholders as required by law and these Bylaws. Section 3.8. Voting . Except as otherwise provided by law, only persons in whose names shares entitled to vote stand on the stock registry of the Corporation on the day three (3) days prior to any shareholders' meeting, or, if a record date for voting purposes is fixed as provided in Article 6, Section 6.1, of these Bylaws, then on that record date, shall be entitled to vote at the meeting. Voting may be viva voce or by ballot; provided, however, that all elections for Directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Except as otherwise provided by an express provision of the Articles of Incorporation or by an express provision of law, each full share is entitled to one vote and, when a quorum is present at the commencement of any shareholders' meeting, the vote of the holders of a majority of the shares entitled to vote present, in person or by proxy, shall decide any question brought before the shareholders' meeting. Fractional shares shall not be entitled to any voting rights whatsoever. Section 3.9. Consent of Absentees . The transactions of any shareholders' meeting, either annual or special and however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes thereof, all such waivers, consents or approvals shall be filed with the Secretary or be made a part of the minutes of the meeting. Section 3.10. Action or Ratification of Action Without Meeting . Any action which, under applicable provisions of law, may be taken or ratified at a meeting of the shareholders, may be taken or ratified without a meeting if authorized in writing by shareholders holding the percentage of the voting power required by law for taking the action by written consent and the written consent is filed with the Secretary. Section 3.11. Proxies . Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by the person or by the person's duly authorized agent and filed with the Secretary of the Corporation; provided that no proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless the person executing it specified therein the length of time for which the proxy is to continue in force, which in no event shall exceed seven (7) years from the date of its execution. Section 3.12. Definition of "Shareholder" . As used in these Bylaws, the term "shareholder," and any term of like import, shall include all persons entitled to vote the shares held by a shareholder, unless the context in which the term is used indicates that a different meaning is intended.
ARTICLE 4 The Board of Directors
Section 4.1. Number of Directors . The Board of Directors of the Corporation shall consist of five (5) members. The members of the Board of Directors need not be shareholders. The number of members of the Board of Directors may be increased or decreased from time to time as provided in Section 4.2 below. Section 4.2. Increase or Decrease of Directors . The number of Directors of the Corporation may be increased or decreased from time to time, at a meeting of the shareholders or by the filing of a written consent, by the affirmative vote of a majority of the issued and outstanding shares of stock of the Corporation. This section of the Bylaws may be amended only by the affirmative vote, at a meeting of the shareholders, of a majority of the issued and outstanding shares of stock of the Corporation. Section 4.3. Election . Members of the initial Board of Directors shall hold office until the first annual shareholders' meeting or until their successors shall have been elected and qualified. At the first annual shareholder's meeting and at each annual meeting thereafter, or by a written consent filed in lieu of an annual meeting, the shareholders shall elect Directors to hold office until the time for the next succeeding annual meeting. If any annual shareholders' meeting is not held and a written consent in lieu of an annual meeting is not filed, or the Directors are not elected, the Directors may be elected at any special shareholders' meeting held for that purpose or by the filing of a special written consent. Each Director shall hold office for the term for which the Director is elected or until the Director's successor shall be elected and qualified. Section 4.4. Vacancies . Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors was present, or by a sole remaining Director. A Director elected to fill a vacancy shall be elected for the unexpired term of the Director's predecessor in office. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any Director or Directors are elected to elect the full authorized number of Directors to be voted for at that meeting, or if a vacancy is declared by the Board of Directors for any reason permitted by law. The shareholders may elect a Director or Directors at any time to fill any vacancy or vacancies not filled by the Directors. If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board or the shareholders shall have power to elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of the Director's term of office. Section 4.5. Place of Meetings . Immediately after the annual meeting of the shareholders, at the same place as the meeting of the shareholders, the Board of Directors shall meet each year for the purpose of organization, election of officers, and consideration of any other business that may properly be brought before the meeting. No notice of any kind to either old or new members of the Board of Directors for this annual meeting shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.7. Section 4.6. Regular Meetings . Regular meetings of the Board of Directors shall be held at the times and places within or without the State of Nevada as may be designated from time to time by resolution of the Board or by written consent of all members of the Board. No notice of any kind to members of the Board for these regular meetings shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.7. Section 4.7. Other Meetings . Other meetings of the Board of Directors for any purpose or purposes may be held at any time upon call by the President or, if the President is absent or unable or refuses to act, by any Vice President or by any two (2) Directors. The other meetings may be held at any place within or without the State of Nevada as may be designated from time to time by resolution of the Board of Directors or by written consent of all Directors. Written notice of the time and place of other meetings shall be delivered personally to each Director or sent to each Director by mail or other form of written communication, charged prepaid, addressed to the Director at the Director's address as it is shown upon the records of the Corporation or, if it is not so shown on the Corporation's records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case the notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the place in which the principal office of the Corporation is located at least seventy-two (72) hours prior to the time of the holding of the meeting. In case the notice is delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. The mailing, telegraphing or delivery as above provided shall constitute due, legal and personal notice to the Director. Section 4.8. Notice of Adjourned Meetings . Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place be fixed-at the meeting adjourned. Section 4.9. Entry of Notice . An entry in the minutes of any special meeting of the Board of Directors to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the special meeting was given to all Directors as required by law and by these Bylaws. Section 4.10. Waiver of Notice . The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the Directors not present signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 4.11. Quorum . A majority of the authorized number of Directors, or, in the event that a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a majority of the exact authorized number of Directors, shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number be required by law or by the Articles of Incorporation. If the number of Directors pursuant to the Articles of Incorporation is one or two, the unanimous consent of said Directors shall be necessary for Board of Directors' action. Section 4.12. Adjournment . A quorum of the Directors may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board. Section 4.13. Action Without Meeting . Any action required or permitted to be taken by the Board of Directors under the Articles of Incorporation, these Bylaws, or under applicable law, -may be taken without a meeting if all members of the Board of Directors shall individually or collectively consent, in writing, to the action. Any action by written consent shall have the same force and effect as a unanimous vote of all Directors. All written consents must be filed with the Secretary. Section 4.14. Fees and Compensation . Directors shall not receive any stated salary for their services as Directors or as members of committees, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed to Directors for the Director's services. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor. Section 4.15. Indemnification of Directors and Officers . (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal. administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid or owed in settlement actually and reasonably paid or incurred by the person or rendered or levied against the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for misfeasance or nonfeasance in the performance of the person's duty to the Corporation unless and only to the extent that, despite the adjudication of liability but in view of all circumstances of the case, such person fairly and equitably merits indemnification. (c) To the extent that a person who may be entitled to indemnification by the Corporation under this section is or has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection therewith. (d) Any indemnification under subsections (a) and (b) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsection (a) or (b). Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs, by either independent legal counsel in a written opinion, or the stockholders, or (iii) if required by law, by the court in which such action, suit or proceeding was brought or another court of competent jurisdiction. (e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding if such payment is authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Corporation as authorized in this section. (f) The indemnification provided by this section shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. (g) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the Corporation would have the power to indemnify the person against such liability under the provisions of this section. (h) For the purposes of this section, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity. (i) The provisions of this section shall apply to the estate, executors, administrators, heirs, legatees or devisees of a person entitled to indemnification hereunder and the term "person," where used in the section shall include the estate, executors, administrators, heirs, legatees or devisees of such person. Section 4.16. Powers of Directors . Subject to limitations of the Articles of Incorporation, of these Bylaws, and of applicable law as to action to be authorized or approved by the shareholders and subject to the duties of Directors as prescribed by these Bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be controlled by, the Board of Directors. Without prejudice to these general powers, but subject to the same Limitations, it is hereby expressly declared that the Directors shall have the following powers: First: To select and remove all officers, agents and employees of the Corporation, to delegate the power to remove any or all officers, agents and employees of the Corporation to an officer or officers, prescribe such powers and duties for them as may not be inconsistent with law, with the Articles of Incorporation or the Bylaws, fix their compensation, and require from them security for faithful service. Second: To conduct, manage and control the affairs and business of the Corporation and to make such rules and regulations therefor not inconsistent with law, with the Articles of Incorporation or these Bylaws, as they may deem best. Third: To change the principal office of the Corporation from one location to another within the same county as provided in Article 1, Section 1.2, hereof; to fix and locate from time to time one or more subsidiary offices of the Corporation, within or without the State of Nevada as provided in Article 1, Section 1.3, hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt. make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of the seal and of the certificates from time to time, as in their judgment they may deem best, provided the seal and the certificates shall at all times comply with the provisions of law. Fourth: To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefore, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor. Fifth: To authorize the issue of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, tangible or intangible property actually received or such other consideration as may be authorized by law. Sixth: To adopt and administer, or provide for the administration of, employee stock purchase plans, employee stock option plans and any other plans or arrangements whereby Directors, Officers, employees or agents of the Corporation or any other entity may be entitled to acquire authorized but unissued or treasury stock or other securities of the Corporation, upon such terms and conditions as may from time to time be permitted by law. Seventh: To appoint an Executive Committee and other committees, and to delegate to the Executive Committee any of the powers and authority of the Board in the management of the business and affairs of the Corporation except the power to declare dividends and to adopt, amend or repeal Bylaws. The Board of Directors shall have the power to prescribe the manner in which proceedings of the Executive Committee and other committees shall be conducted. The committees shall keep regular minutes of their meetings and report the same to the Board when required. The Executive Committee must be composed of two (2) or more Directors. Eighth: To lend money in furtherance of any of the purposes of the Corporation; to invest the funds of the Corporation from time to time; and to take and hold any property as security for the payment of funds so loaned or invested. Ninth: To lend money to employees, officers and Directors, and to otherwise assist employees, officers and Directors. Loans to members of the Board of Directors shall be made only upon the approval of a majority of the Board of Directors excluding the Director to whom the loan is to be made. Tenth: To declare dividends upon the capital stock of the Corporation in cash, in property, or in shares of the capital stock, subject to the limitation of the Articles of Incorporation and of applicable law. Before payment of any dividend, there may be set aside out of the funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interests of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE 5 The Officers
Section 5.1. Officers . The officers of the Corporation shall be a President, a Vice President, a Secretary and a Treasurer, and each of them shall be appointed by the Board of Directors. The Corporation may also have such other executive officers, including one (1) or more Vice Presidents, one (1) or more Assistant Secretaries and one (1) or more Assistant Treasurers, and other subordinate officers as may be appointed in accordance with the provisions of Section 5.3 of this Article 5. Officers need not be Directors. One person may hold two (2) or more offices, except those of President and Vice President. However, if the Corporation only has one shareholder, then one person may hold the offices of both President and Vice President. Section 5.2. Election . The officers of the Corporation, except those officers as may be appointed in accordance with the provisions of Section 5.3 or Section 5.5 of this Article, shall be chosen annually by the Board of Directors, and each shall hold office until the officer shall resign or shall be removed or otherwise disqualified to serve, or the officer's successor shall be elected and qualified; provided that officers may be appointed at any time by the Board of Directors, or, as permitted by Section 5.3 of this Article, by the President, for the purpose of initially filling an office or filling a newly created or vacant office. Section 5.3. Subordinate Officers . The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the Corporation may require, each of whom shall hold office for the term, have the authority and perform the duties as are provided in these Bylaws or as the Board of Directors may from time to time determine. Section 5.4. Removal and Resignation . Any officer may, subject to any contractual arrangements between the officer and the Corporation, be removed, either with or without cause, by a majority of the Directors in office at the time, at any regular or special meeting of the Board, or by any officer upon whom the power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving written notice to the Board of Directors, to the President, or to the Secretary of the Corporation. Any resignation shall take effect at the date of the receipt of the notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 5.5. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to that office. Section 5.6. President . Subject to the control of the Board of Directors. the President shall have general supervision, direction and control of the business and officers of the Corporation. In the absence of a Chairman of the Board, the President shall preside at all meetings of the shareholders and at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing committees, including the Executive Committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a Corporation, and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws. Section 5.7. Vice Presidents . In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other powers and perform such other duties as may be prescribed for them respectively by the Board of Directors, the President, or these Bylaws. Section 5.8. Secretary . The Secretary shall keep or cause to be kept, at the principal office or such other place as the Board of Directors may order, a book of minutes of all meetings of Directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof. The Secretary shall keep or cause to be kept, in any form permitted by law. at the principal office or at the office of the Corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for shares, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board of Directors required by these Bylaws or by law to be given, and shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. Section 5.9. Treasurer . The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any Director. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and Directors, whenever they request it, an account of all transactions as Treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of office of Treasurer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation. Section 5.10. Corporate Bank Accounts . Bank accounts in the name of the Corporation may be opened without the approval of the Board of Directors if opened with the consent of the President and the Treasurer of the Corporation. The Treasurer shall inform the Board of Directors of any bank account opened by the Corporation pursuant to the authority granted in this section at the next meeting of the Board of Directors. Section 5.11. Transfers of Authority . In case of the absence of any officer of the Corporation, or for any reason that the Board of Directors may consider sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer or to any Director or employee of the Corporation, provided a majority of the full Board of Directors concurs.
ARTICLE 6 Miscellaneous
Section 6.1. Record Date and Closing Stock Books . The Board of Directors may fix a time in the future, as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders, or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall not be more than sixty (60) days prior to the date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record on that date shall be entitled to notice of and to vote at the meeting, or to receive the dividend, distribution or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. The Board of Directors may close the books of the Corporation against transfers of shares during the whole or any part of the sixty (60) day period. Section 6.2. Inspection of Corporate Records . The share register or duplicate share register shall be open to inspection upon at least five (5) days written demand of any shareholder who has been a shareholder for at least six (6) months preceding his demand or any person holding, or authorized in writing by the holders of, at least five percent (5 %) of all of the Corporation's outstanding shares, at any reasonable time. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection is not desired for any purpose which is in the interest of a business or object other than the business of the Corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose. Unless the Corporation furnishes a detailed annual financial statement, the books of account and all financial records of the Corporation shall be open to inspection upon at least five (5) days written demand of any stockholder of record and who owns not less than fifteen percent (15 %) of all of the Corporation's issued and outstanding shares, at any reasonable time, and shall include the right to audit the same. The stockholder shall pay, in advance, for the cost for making extracts and conducting an audit. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection, extracts or audit is not desired for any purpose not related to his interest in the Corporation as a stockholder. Any inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand for any inspection shall be made in writing upon the President of the Corporation. Section 6.3. Checks. Drafts, etc . All checks, drafts, bonds, bills of exchange, or other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors. Section 6.4. Contracts, etc., How Executed . The Board of Directors, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument or document in the name of and on behalf of the Corporation, and the authority may be general or confined to specific instances. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust, mortgages and corporate instruments or documents requiring the corporate seal, and certificates for shares of stock owned by the Corporation shall be executed, signed or endorsed by the President or any Vice President and by the Secretary (or any Assistant Secretary) or the Treasurer (or any Assistant Treasurer). The Board of Directors may, however, authorize any one (1) of these officers to sign any of such instruments, for and on behalf of the Corporation, without necessity of countersignature; may designate officers or employees of the Corporation, other than those named above, who may, in the name of the Corporation, sign such instruments; and may authorize the use of facsimile signatures of any of such persons. No officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit to render it liable for any purpose or to any amount except as specifically authorized in these Bylaws or by the Board of Directors in accordance with these Bylaws. Section 6.5. Certificates of Stock . A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares are fully paid up. All certificates shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and Secretary or by a facsimile of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Before it becomes effective, every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust company, either domestic or foreign, as registrar of transfers, as required or permitted by law. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any certificate or certificates shall cease to be an officer or officers of the Corporation, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of the Corporation. Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or these Bylaws may provide; provided, however, that any certificate so issued prior to full payment shall state the amount remaining unpaid and the terms of payment thereof. Section 6.6. Lost Certificates of Stock . The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates. or the shareholder's legal representative, to advertise the same in any manner as it shall require or give the Corporation a bond in any sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed, or both. Section 6.7. Representation of Shares of Other Corporations . The President or any Vice President and the Secretary or any Assistant Secretary of this Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to these officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other corporation or corporations may be exercised either by these officers in person or by any persons authorized so to do by proxy or power of attorney duly executed by these officers. Section 6.8. Inspection of Bylaws . The Corporation shall keep in its principal business office the original or a copy of the Bylaws as amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours.
ARTICLE 7 Amendments
Section 7.1. Power of Shareholders . New Bylaws may be adopted or these Bylaws may be amended or repealed by the vote or written assent of shareholders entitled to exercise a majority of the voting power of the Corporation, unless a greater number is required by law, by the Articles of Incorporation or by these Bylaws. Section 7.2. Power of Directors . Subject to the right of shareholders as provided in Section 7.1 of this Article 7 to adopt, amend or repeal Bylaws, Bylaws may be adopted, amended, or repealed by the Board of Directors; provided, however, that a Bylaw or amendment thereof changing the authorized number of Directors may be adopted, amended or repealed only by the shareholders, except that if a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a Bylaw or amendment thereof fixing the exact number of Directors within the limits specified in the Articles of Incorporation or these Bylaws may be adopted, amended or repealed by the Board of Directors. I, the undersigned, being the Secretary of PCI Air Management Corporation, do hereby certify the foregoing to be the Bylaws of said corporation, as adopted by consent to action taken without meeting by the Board of Directors of the Corporation.
	/s/ William Shapiro WILLIAM DANA SHAPIRO, Secretary to the Corporation

EXECUTION COPY
OPERATING AGREEMENT OF PCI AIR MANAGEMENT PARTNERS, L.L.C.
TABLE OF CONTENTS
SECTION 1
	THE COMPANY				1
	1.1	Formation			1
	1.2	Name			1
	1.3	Purpose; Powers			2
	1.4	Principal Place of Business			2
	1.5	Term			2
	1.6	Filings; Agent for Service of Process			3
	1.7	Title to Property			4
	1.8	Payments of Individual Obligations			4
	1.9	Independent Activities; Transactions with Affiliates			4
	1.10	Definitions			5
SECTION 2
	MEMBERS' CAPITAL CONTRIBUTIONS				19
	2.1	Original Capital Contributions			19
	2.2	Additional Capital Contributions			20
SECTION 3
	ALLOCATIONS				20
	3.1	Profits			20
	3.2	Losses			20
	3.3	Special Allocations			20
	3.4	Curative Allocations			22
	3.5	Loss Limitation			23
	3.6	Other Allocation Rules			23
	3.7	Tax Allocations: Code Section 704(c)			25
SECTION 4
	DISTRIBUTIONS				25
	4.1	Net Cash Flow			25
	4.2	Amounts Withheld			26
	4.3	Limitations on Distributions			26
	4.4	Distributions and Payments to Members			26
SECTION 5
	MANAGEMENT				27
	5.1	Authority of the Manager			27
	5.2	Duties and Obligations of the Manager			29
	5.3	Compensation; Expenses			32
	5.4	Indemnification of the Manager			32
	5.5	Temporary Investments			33
	5.6	Manager's Liability			33
	5.7	Withdrawal, Removal and Termination			34
SECTION 6
	ROLE OF MEMBERS				34
	6.1	Rights or Powers			34
	6.2	Voting Rights			35
	6.3	Meetings and Consents of the Members			35
	6.4	Procedure for Consent			36
	6.5	Required Member Consents			36
	6.6	Withdrawal/Resignation			37
	6.7	Member Compensation			38
	6.8	Members Liability			38
	6.9	Partition			38
	6.10	Transactions Between a Member or Manager and the Company			38
	6.11	Other Instruments			39
SECTION 7
	REPRESENTATIONS AND WARRANTIES				39
	7.1	In General			39
	7.2	Representations and Warranties			39
	7.3	Limitation on Damages for Breach of Representations or Warranties/Damage Payments			42
SECTION 8
	ACCOUNTING, BOOKS AND RECORDS
	8.1	Accounting, Books and Records			42
	8.2	Reports			43
	8.3	Tax Matters			44
AMENDMENTS					45
SECTION 10
	TRANSFERS				46
	10.1	Restrictions on Transfers			46
	10.2	Retirement of RAMP Investments' Interest			47
SECTION 11
	POWER OF ATTORNEY				48
	11.1	Manager as Attorneys-In-Fact			48
	11.2	Nature of Special Power			49
SECTION 12
	DISSOLUTION AND WINDING UP				50
	12.1		Dissolution Events			50
	12.2		Winding Up			51
	12.3		Compliance With Certain Requirements of Regulations; Deficit Capital Accounts			53
	12.4		Deemed Distribution and Recontribution			53
	12.5		Rights of Members			54
	12.6		Notice of Dissolution/Termination			54
	12.7		Allocations and Distributions During Period of Liquidation			54
	12.8		Character of Liquidating Distributions			54
	12.9		The Liquidator			54
	12.10		Form of Liquidating Distributions			55
SECTION 13
	MISCELLANEOUS					56
	13.1		Notices			56
	13.2		Binding Effect			56
	13.3		Construction			56
	13.4		Time			57
	13.5		Headings			57
	13.6		Severability			57
	13.7		Incorporation by Reference			57
	13.8		Variation of Terms			57
	13.9		Governing Law			58
	13.10		Waiver of Jury Trial			58
	13.11		Counterpart Execution			58
	13.12		Sole and Absolute Discretion			58
	13.13		Specific Performance			58
	13.14		Holding Company Eligible Activities and Holding Company Eligible Assets/Banking Laws and Regulations			59
	13.15		No Material Impairment			59
EXHIBITS
Exhibit A				List of Aircraft Lease Documents
Exhibit B				RAMP Investments Contribution Agreement
Exhibit C				Appraisal
Exhibit D				Form of PCI Note
Exhibit E				Form of Lease Certificate
Exhibit F				Form of PCI Master Lease
OPERATING AGREEMENT OF PCI AIR MANAGEMENT PARTNERS, L.L.C.
This OPERATING AGREEMENT is entered into and shall be effective as of the 13th day of November, 1995, by and among PCI Air Management Corporation ("PCI Air Co"), a Nevada corporation, and RAMP Investments, L.L.C. ("RAMP Investments"), a Delaware limited liability company, as Members, and PCI Air Co, as Manager, pursuant to the provisions of the Act, on the following terms and conditions:

SECTION 1 THE COMPANY
1.1 Formation. The Members hereby agree to form the Company as a limited liability company under and pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. The fact that the Certificate is on file in the office of the Secretary of State, State of Delaware, shall constitute notice that the Company is a limited liability company. Simultaneously with the execution of this Agreement and the formation of the Company, each of the Members shall be admitted as members of the Company and the Manager shall be admitted as the manager of the Company. The rights and liabilities of the Members shall be as provided under the Act, the Certificate and this Operating Agreement. 1.2 Name. The name of the Company shall be PCI Air Management Partners, L.L.C. and all business of the Company shall be conducted in such name or, with the consent of the Members, under any other name. 1.3 Purpose; Powers. (a) The purposes of the Company are (i) to acquire, hold, operate, manage, protect, conserve and sell (directly or indirectly) (A) the stock of AIMC, (B) the Leased Aircraft contributed to the Company by RAMP Investments pursuant to Section 2.1 hereof and (C) Permitted Investments, (ii) to make such additional investments and engage in such additional business endeavors as may be authorized pursuant to this Agreement or otherwise as the Members may unanimously agree, and (iii) to engage in any and all activities necessary or incidental to the foregoing purposes; provided that any asset acquired, investment made or activity engaged in by the Company shall be Holding Company Eligible or made Holding Company Eligible in compliance with Section 5.2(d). In no event shall the Company accept demand deposits, including without limitation demand deposits that the depositor may withdraw by check or similar means for payment to third parties. (b) The Company has the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to and in furtherance of the purposes of the Company set forth in this Section 1.3 and has, without limitation, any and all powers that may be exercised on behalf of the Company by the Manager pursuant to Section 5 hereof. (c) The Company intends to manage the assets of the Company such that there is a reasonable (in the sole opinion of the Manager) ratio of the value of the Leased Aircraft held by the Company at any given time to the value of the stock of AIMC held at such time. 1.4 Principal Place of Business. The principal place of business of the Company shall be at 1575 Delucchi Lane, Suite 115, Reno, Nevada 89502. The Manager may change the principal place of business of the Company to any other place within or without the State of Delaware with the consent of the Members. The registered office of the Company in the State of Delaware initially is located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. 1.5 Term. The term of the Company shall commence on the date the Certificate is filed in the office of the Secretary of State of the State of Delaware in accordance with the Act and shall continue until the dissolution and the completion of the winding up of the Company and its business is completed following a Dissolution Event, as provided in Section 12 hereof. Prior to the time that the Certificate is filed, no Person shall represent to third parties the existence of the Company or hold himself out as a Member or Manager. 1.6 Filings; Agent for Service of Process. (a) The Manager is hereby authorized to and shall execute and cause the Certificate to be filed in the office of the Secretary of State of the State of Delaware in accordance with the Act. The Manager shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware, including the preparation, execution, and filing of such amendments to the Certificate and such other assumed name certificates, documents, instruments and publications as may be required by law, including, without limitation, action to reflect:
	(i) A change in the Company name; or (ii) A correction of false or erroneous statements in the Certificate or the desire of the Members to make a change in any statement therein in order that it shall accurately represent the agreement among the Members.
(b) The Members and the Manager shall execute and cause to be filed original or amended certificates and shall 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 or similar type of entity under the laws of any other jurisdictions in which the Company engages in business. (c) The registered agent for service of process on the Company in the State of Delaware shall be The Corporation Trust Company or any successor as appointed by the Members in accordance with the Act. (d) Upon the dissolution and completion of the winding up of the Company in accordance with Section 12 hereof, the Liquidator, as an authorized person within the meaning of the Act, shall promptly execute and cause to be filed a Certificate of Cancellation in accordance with the Act and the laws of any other jurisdictions in which the Liquidator deems such filing necessary or advisable. 1.7 Title to Property. All Property owned by the Company shall be owned by the Company as an entity and no Member shall have any ownership interest in such Property in its individual name, and each Member's interest in the Company shall be personal property for all purposes. Except as otherwise provided in Section 5.5 hereof, the Company shall hold title to all of its Property in the name of the Company and not in the name of any Member. 1.8 Payments of Individual Obligations. The Company's credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be Transferred or encumbered for, or in payment of, any individual obligation of any Member. 1.9 Independent Activities; Transactions with Affiliates. (a) The Manager shall be required to devote such time to the affairs of the Company as may be necessary to manage and operate the Company and AIMC; and Affiliates of the Manager and, so long as the Manager is in satisfaction of its obligations pursuant to Sections 5.1 and 5.2 hereof, the Manager shall be free to serve any other Person or enterprise in any capacity that it may deem appropriate in its discretion. (b) Insofar as permitted by applicable law, neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Member or the Manager or their Affiliates from engaging in whatever activities they choose, whether the same are competitive with the Company or otherwise, and any such activities may be undertaken without having or incurring any obligation to offer any interest in such activities to the Company or any Member, or require any Member or the Manager to permit the Company or any other Member or its Affiliates to participate in any such activities, and as a material part of the consideration for the execution of this Agreement by each Member, each Member hereby waives, relinquishes, and renounces any such right or claim of participation. (c) To the extent permitted by applicable law and subject to the provisions of this Agreement, in furtherance of the purposes of the Company set forth in Section 1.3, the Manager is hereby authorized to cause the Company to purchase property (whether real, personal, or mixed) from, sell Property to or otherwise deal with any Member or the Manager, acting on its own behalf, or any Affiliate of any Member or Manager; provided that any such purchase, sale or other transaction shall e made on terms and conditions which are no less favorable to the Company than if the sale, purchase or other transaction had been made with an independent third party. (d) Notwithstanding Section 1.9(c), the Manager, on behalf of the Company, is hereby authorized to cause the Company to enter into the transactions evidenced by, and perform its obligations under, the RAMP Investments Contribution Agreement, the PCI Master Lease, any PCI Note, and the Aircraft Lease Documents, all without any further action, consent, or approval of any other Person. (e) Each Member and Manager and any Affiliate thereof may also lend money to, borrow money from, act as a surety, guarantor or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, and transact other business with the Company and, subject to other applicable law, has the same rights and obligations with respect thereto as a Person who is not a Member. If a Member or any Affiliate thereof is a lender, in exercising its rights as a lender, including making its decision on whether to foreclose on property of the Company, such lender will have no duty to consider (i) its status as a Member or an Affiliate of a Member, (ii) the interests of the Company, or (iii) any duty it may have to the Company or any other Person. 1.10 Definitions. Capitalized words and phrases used in this Agreement have the following meanings: "Act" means the Delaware Limited Liability Company Act, 6 Del. C. Section 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law). "Adjusted Capital Account Deficit" means, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant Allocation Year, after giving effect to the following adjustments: (i) Credit to such Capital Account any amounts which such Member is deemed to be obligated to restore pursuant to the penultimate sentences in Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and
	(ii) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)( d )( 4 ), 1.704-1(b)(2)(ii)( d )( 5 ) and 1.704-1(b)(2)(ii)( d )( 6 ) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-l(b)(2)(ii)( d ) of the Regulations and shall be interpreted consistently therewith. "Affiliate" means, with respect to any Person (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any Person owning or controlling ten percent (10%) or more of the outstanding voting interests of such Person, (iii) any officer, director, general partner, member or trustee of, or Person serving in a similar capacity with respect to, such Person, or (iv) any Person who is an officer, director, general partner, member, trustee or holder of 10% or more of the voting interests of any Person described in clauses (i), (ii), or (iii) of this sentence. For purposes of this definition, the terms "controlling," "controlled by" or "under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person or entity, whether through the ownership of voting securities, by contract or otherwise. "Agreement" or "Operating Agreement" means this Operating Agreement of PCI Air Management Partners, L.L.C., as amended from time to time, which shall constitute the limited liability agreement of the Company for all purposes of the Act. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires. "AIMC" means Aircraft International Management Corporation, a Delaware corporation. "Aircraft Lease Documents" means those documents and certificates listed on Exhibit A hereto and incorporated herein by reference. "Allocation Year" means (i) the period commencing on the Effective Date and ending on December 31, 1995, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on December 31, or (iii) any portion of the period described in clauses (i) or (ii) for which the Company is required to allocate Profits, Losses and other items of Company income, gain, loss or deduction pursuant to Section 3 hereof. "Appraised Value" means, with respect to any asset, the value determined by appraisal in the manner described in Exhibit C hereto which is incorporated herein by reference provided that the "Appraised Value" of any PCI Note shall be determined by an investment bank of national recognition appointed by the Manager. "Bankruptcy" means, with respect to any Person, a "Voluntary Bankruptcy" or an "Involuntary Bankruptcy". A "Voluntary Bankruptcy" means, with respect to any Person (i) the inability of such Person generally to pay its debts as such debts become due, or an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors, (ii) the filing of any petition or answer by such Person seeking to adjudicate itself as bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property, or (iii) corporate action taken by such Person to authorize any of the actions set forth above. An "Involuntary Bankruptcy" means, with respect to any Person, without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation, or the filing of any such petition against such Person which petition shall not be dismissed within ninety (90) days, or without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person which order shall not be dismissed within ninety (90) days. The foregoing is intended to supersede and replace the events listed in Sections 18-304(a) and (b) of the Act. "BHCA" means the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Section 1841 et seq ., and the rules and regulations promulgated thereunder. "BT Investor" means AM-BT Nevada, Inc., a Nevada corporation. "Business Day" means a day of the year on which banks are not required or authorized to close in New York, New York. "Capital Account" means, with respect to any Member, the Capital Account maintained for such Member in accordance with the following provisions:
	(i) To each Member's Capital Account there shall be credited (A) such Member's Capital Contributions, (B) such Member's distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof, and (C) the amount of any Company liabilities assumed by such Member or which are secured by any Property distributed to such Member. The principal amount of a promissory note which is not readily traded on an established securities market and which is contributed to the Company by the maker of the note (or a Member related to the maker of the note within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c)) shall not be included in the Capital Account of any Member until the Company makes a taxable disposition of the note or until (and to the extent) principal payments are made on the note, all in accordance with Regulations Section 1.704-l(b)(2)(iv)(d)(2); (ii) To each Member's Capital Account there shall be debited (A) the amount of money and the Gross Asset Value of any Property distributed to such Member pursuant to any provision of this Agreement, (B) such Member's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof, and (C) the amount of any liabilities of such Member assumed by the Company or which are secured by any Property contributed by such Member to the Company; (iii) In the event all or any portion of an Interest is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Interest; and (iv) In determining the amount of any liability for purposes of subparagraphs (i) and (ii) above there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-l(b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the Manager shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company or any Members), are computed in order to comply with such Regulations, the Manager, with the consent of the Members, may make such modification. The Manager also shall, with the consent of the Members, (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1 (b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-l(b). "Capital Contributions" means, with respect to any Member, the amount of money and the initial Gross Asset Value of any Property (other than money) contributed to the Company with respect to the Interest held or purchased by such Member. "Certificate" means the certificate of formation filed with the Secretary of State of the State of Delaware pursuant to the Act to form the Company, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires. "Certificate of Cancellation " means a certificate filed in accordance with 6 Del. C. Section 18-203. "Change of Control" of PCI Air Co shall be deemed to have occurred if a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) other than PCI is the direct or indirect owner of more than fifty percent (50%) of the voting securities of PCI Air Co with the power to designate a majority of such entity's directors or managers, as the case may be. "Code" means the United States Internal Revenue Code of 1986, as amended from time to time. "Company" means the limited liability company formed pursuant to this Agreement and the Certificate and the limited liability company continuing the business of this Company in the event of dissolution of the Company as herein provided. "Debt" means (i) any indebtedness for borrowed money or the deferred purchase price of property as evidenced by a note, bonds, or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by the Company whether or not the Company has assumed or become liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement, (v) accounts payable, and (vi) obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii), (iv), and (v) above, provided that Debt shall not include obligations in respect of any accounts payable that are incurred in the ordinary course of the Company's business and are not delinquent or are being contested in good faith by appropriate proceedings. "Depreciation" means, for each Allocation Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Allocation Year for federal income tax purposes, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value (i) with respect to Leased Aircraft, on a straight line basis over a seven year period, and (ii) with respect to any other Permitted Investment, using any reasonable method selected by the Manager with the consent of the Members. "Dissolution Event" shall have the meaning set forth in Section 12.1 hereof. "Effective Date" means the date hereof. "Expenses" means any and all costs, liabilities, obligations, losses, damages, penalties, claims (including, but not limited to negligence, strict or absolute liability, liability in tort and liabilities arising out of violation of laws or regulatory requirements of any kind), actions, suits, costs, expenses and disbursements (including reasonable legal fees and expenses). "First Appraiser" shall have the meaning set forth in Exhibit C hereto. "Fiscal Quarter" means (i) the period commencing on the Effective Date and ending on December 31, 1995, (ii) any subsequent three-month period commencing on each of January 1, April 1, July 1 and October 1 and ending on the last date before the next such date, and (iii) the period commencing on the immediately preceding January 1, April 1, July 1, or October 1, as the case may be, and ending on the date on which all Property is distributed to the Members pursuant to Section 12 hereof. "Fiscal Year" means (i) the period commencing on the Effective Date and ending on December 31, 1995, (ii) any subsequent twelve-month period commencing on January 1 and ending on December 31, and (iii) the period commencing on the immediately preceding January 1 and ending on the date on which all Property is distributed to the Members pursuant to Section 12 hereof. "Full Payout Lease" means a lease of not more than 40 years under the terms of which the lessor can reasonably expect to realize a return of its full investment in the leased property plus the estimated cost of financing the property over the term of the lease from (i) rentals, (ii) estimated tax benefits, and (iii) the estimated residual value of the property at the expiration of the initial term of the lease, which in no case shall exceed 25% of the acquisition cost of the property to the lessor; provided that, in the event of any change in any applicable state or federal banking law after the Effective Date, the meaning of "Full Payout Lease" shall be changed accordingly. "GAAP" means generally accepted accounting principles in effect in the United States as amended from time to time. "Gross Asset Value" means with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the Manager with the consent of the Members, provided that the initial Gross Asset Values of the assets contributed to the Company pursuant to Section 2.1 hereof shall be as set forth in such section; (ii) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account), as determined in accordance with Section 10.2(b)(iii) hereof as of the following times: (A) the acquisition of an additional Interest by any new or existing Member in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an Interest; and (C) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), provided that an adjustment described in clauses (A) and (B) of this paragraph shall be made only if the Manager reasonably determines that such adjustment is necessary to reflect the relative economic interests of the Members in the Company; (iii) The Gross Asset Value of any item of Company assets distributed to any Member shall be adjusted to equal the gross fair market value (taking Code Section 770 1(g) into account) of such asset on the date of distribution as determined by the distributee and the Manager, provided that, if a Member that is the Manager or a Member that is an Affiliate of the Manager is the distributee, the determination of the fair market value of the distributed asset shall require the consent of the Members prior to such distribution and (iv) The gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)( m ) and subparagraph (vi) of the definition of "Profits" and "Losses" or Section 3.3(g) hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses. "Holding Company Eligible" means, in respect of any asset or activity, that such asset is eligible for acquisition by, or such activity may be engaged in by, a bank holding company within the meaning of (i) Article III-A of the New York Banking Law and (ii) the BHCA, as the same may be amended from time to time. "Holding Company Eligible Lease" means a lease that is a Net Lease and a Full Payout Lease, and contains a tax indemnity for taxes other than federal income taxes that are attributable to the use or presence of the leased asset in the taxing jurisdiction. "Interest" means an ownership interest in the Company representing some or all of the Capital Contributions made by a Member pursuant to Section 2 hereof, including any and all benefits to which the holder of such an Interest may be entitled as provided in this Agreement (including, without limitation, any rights to payments and distributions pursuant to Sections 4, 10 and 12 hereof), together with all obligations of such holder to comply with the terms and provisions of this Agreement. "Involuntary Bankruptcy" has the meaning set forth in the definition of "Bankruptcy." "Issuance Items" has the meaning set forth in Section 3.3 (h) hereof. "Leased Aircraft" means the aircraft contributed to the Company by RAMP Investments pursuant to Section 2. 1 hereof. "Leased Equipment' has the meaning set forth in the definition of "Permitted Investments." "Liquidator" has the meaning set forth in Section 12.9(a) hereof. "Losses" has the meaning set forth in the definition of "Profits" and "Losses". "Manager" means PCI Air Co so long as PCI Air Co continues to serve in such capacity and has not been removed as Manager in accordance with Section 5.7 of this Agreement and shall also refer to any Person that is admitted to the Company as a successor manager of the Company in accordance with this Agreement. "Member", means any Person (i) who is referred to as such in the first paragraph of this Agreement, or who has become a substituted Member pursuant to the terms of this Agreement and (ii) who has not ceased to be a Member. "Members" means all such Persons. "Member Nonrecourse Debt" has the same meaning as the term "partner nonrecourse debt" in Section 1.7042(b)(4) of the Regulations. "Member Nonrecourse Debt Minimum Gain" means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations. "Member Nonrecourse Deductions" has the same meaning as the term of partner nonrecourse deductions" in Sections 1.704-2(i)(1) and 1.7042(i)(2) of the Regulations. "Modified Tax Basis of Accounting" means the use of the accrual method of accounting on the basis of Federal income tax laws and regulations in effect for the period being reported upon, except as otherwise required by this Agreement including the maintenance of Capital Accounts. "Moody's" means Moody's Investor's Services, Inc. "Net Cash Flow" means an amount equal to the taxable income or loss of the Company arising in the ordinary course of the Company's business and investment activities, increased by (x) tax exempt interest, depreciation, amortization, cost recovery allowances and other noncash charges deducted in determining such taxable income and (y) the gross cash proceeds of the sale of any Property by the Company, to the extent not already included in such taxable income or loss and decreased by (i) principal payments made on any Company indebtedness; (ii) property replacement or contingency reserves actually established by the Company; (iii) capital expenditures when made other than from reserves or from borrowings the proceeds of which are not included in operating cash flow; and (iv) any other cash expenditures not deducted in determining such taxable income or loss. "Net Contribution Value" shall mean with respect to the cumulative assets contributed by a Member to the Company, the Gross Asset Value of such assets reduced by the recourse and nonrecourse liabilities of such Member assumed by the Company. "Net Lease" means a lease under which the lessor will not, directly or indirectly, provide for, or be obligated to provide for (i) the servicing, repair or maintenance of the leased property during the lease term; (ii) the purchasing of parts and accessories for the leased property; (iii) the loan of replacement or substitute property while the leased property is being serviced; (iv) the purchasing of insurance for the lessee except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance; and (v) the renewal of any license or registration for the leased property, unless such action by the lessor is clearly necessary to protect its interest as an owner or financier of the leased property, provided that, in the event of any changes in any applicable state or federal banking law after the Effective Date, the meaning of "Net Lease" shall be changed accordingly. "Nonrecourse Deductions" has the meaning set forth in Section 1.704-2(b)(1) of the Regulations. "Nonrecourse Liability" has the meaning set forth in Section 1.704-2(b)(3) of the Regulations. "Parent" means, in the case of PCI Air Co, PCI. "PCF" means Potomac Capital Investment Corporation, a Delaware corporation. "PCI Master Lease" has the meaning set forth in Section 5.2(d)(i). "PCI Note" has the meaning set forth in clause (i) of the definition of "Permitted Investment". "Percentage Interest" means, with respect to each Member, as of the date hereof, the Percentage Interest of such Member set forth in Section 2. 1 hereof In the event all or any portion of an Interest is Transferred in accordance with the terms of this Agreement other than pursuant to a pledge or hypothecation, the transferee shall succeed to a corresponding portion of the Percentage Interest of the transferor. "Permitted Investments" mean:
	(i) A debt obligation ("PCI Note") of PCI or a direct or indirect wholly owned subsidiary of PCI fully and unconditionally guaranteed by PCI that (i) provides for interest-only payments at an interest rate equal to PCI's then current borrowing rate for equivalent maturity securities, (ii) is either a demand obligation or has a maturity no later than June 30, 2002, and (iii) is substantially in the form of the PCI Note attached hereto as Exhibit D, provided that PCI's senior unsecured debt is rated at least Baa3 by Moody's or BBB,- by S&P on the date such obligation is acquired by the Company; (ii) A debt obligation of any issuer other than PCI or its Affiliates rated at least Baa3 by Moody's or BBB- by S&P with maturity no later than June 30, 2002; (iii) Solely through AIMC, preferred stock of any issuer whose senior unsecured debt is rated at least Baa3 by Moody's or BBB by S&P; provided that (A) all such preferred stock shall be held only by AIMC and (B) at no time shall any such holding of preferred stock by AIMC represent more than five percent (5%) of any class of "voting securities" of the issuer (as such term is defined in the BHCA), (iv) Solely in the case of the Company and not indirectly through AIMC, the Leased Aircraft; (v) The stock of AIMC; (vi) Property described in Section 5. 1 (b) hereof, and (vii) Property described in Section 5.5 hereof
"Person" means any individual, partnership (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity. "Profits" and "Losses" mean, for each Allocation Year, an amount equal to the Company's taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):
	(i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be added to such taxable income or loss; (ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be subtracted from such taxable income or loss; (iii) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; (iv) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Year, computed in accordance with the definition of "Depreciation"; (vi) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations Section 1.704-(b)(2)(iv)( m )( 4 ), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member's Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and (vii) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof shall not be taken into account in computing Profits or Losses.
The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Sections 3.3 and 3.4 hereof shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above. "Property" means all real and personal property acquired by the Company, including cash, and any improvements thereto, and shall include both tangible and intangible property. "RAMP Investments Contribution Agreement" means the Contribution Agreement of even date herewith and in the form attached hereto as Exhibit B pursuant to which RAMP Investments made or will make its contribution to the Company. "Reconstitution Period' has the meaning set forth in Section 12. 1 (b) hereof. "Regulations" means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations are amended from time to time. "Regulatory Allocations" has the meaning set forth in Section 3.4 hereof. "Retirement Allocation Date" has the meaning set forth in Section 10.2(b) hereof. "Retirement Date" has the meaning set forth in Section 10. 2(a) hereof. "Second Appraiser" shall have the meaning set forth in Exhibit C hereto. "Securities Act' means the Securities Act of 193 3, as amended. "S&P" means Standard & Poor's Corporation. "Tax Matters Member" has the meaning set forth in Section 8.3 (a) hereof. "Transfer" means, as a noun, any voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition and, as a verb, voluntarily or involuntarily to transfer, sell, pledge or hypothecate or otherwise dispose of. "Voluntary Bankruptcy" has the meaning set forth in the definition of "Bankruptcy. "Wholly Owned Affiliate" of any Person means an Affiliate of such Person (i) one hundred percent (100%) of the voting stock or beneficial ownership of which is owned directly by such Person, or by any Person who, directly or indirectly, owns one hundred percent (100%) of the voting stock or beneficial ownership of such Person, (ii) an Affiliate to such Person who, directly or indirectly, owns one hundred percent (100%) of the voting stock or beneficial ownership of such Person, and (iii) any Wholly Owned Affiliate of any Affiliate described in clause (i) or clause (ii).
SECTION 2 MEMBERS' CAPITAL CONTRIBUTIONS
2.1 Original Capital Contributions. The name, address, original Capital Contribution, and initial Percentage Interest of each of the Members is as follows:
Name and Address			Original Capital Contribution		Percentage Interest
PCI Air Co 1575 Delucchi Lane Suite 115 Reno, Nevada 89502			$4,887,597 in cash		1%
RAMP Investments 1575 Delucchi Lane Suite 115 Reno, Nevada 89502			The aircraft described in theRAMP Investments ContributionAgreement attached hereto as Exhibit B together with an amount of cash attributable to rental payments on such aircraft received by PCI after November 30, 1995 and before the date on which such aircraft are contributed to the Company with an agreed initial Gross Asset Value equal to $302,841,608 allocated among such assets as set forth on Schedule A, which aircraft is subject to nonrecourse debt in the aggregate amount of $43,064,635. The stock of AIMC, with an Agreed initial Gross Asset Value Equal to $212,307,137. $11,788,045 in cash		99%
Each Member shall make its original Capital Contribution on the Effective Date or the next Business Day thereafter, provided that RAMP Investments shall contribute the aircraft described in the RAMP Investments Contribution Agreement at such times as are required by such RAMP Investments Contribution Agreement. 2.2 Additional Capital Contributions. The Members may make additional Capital Contributions only with the written consent of all Members.
SECTION 3 ALLOCATIONS
3.1 Profits. After giving effect to the special allocations set forth in Sections 3.3 and 3.4, Profits for any Allocation Year shall be allocated to the Members in proportion to their Percentage Interests. 3.2 Losses. After giving effect to the special allocations set forth in Sections 3.3 and 3.4 and subject to Section 3.5, Losses for any Allocation Year shall be allocated to the Members in proportion to their Percentage Interests. 3.3 Special Allocations. The following special allocations shall be made in the following order: (a) Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(f) of the Regulations, notwithstanding any other provision of this Section 3 if there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section 3.3(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith. (b) Member Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of this Section 3, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Allocation Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 3.3(b) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith. (c) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1 (b)(2)(ii)( d )( 4 ), 1.704-1 (b)(2)(ii)( d )( 5 ), or 1. 704-1 (b)(2)(ii)( d )( 6 ) of the Regulations, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible, provided that an allocation pursuant to this Section 3.3(c) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 3 have been tentatively made as if this Section 3.3(c) were not in the Agreement. (d) Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any Allocation Year which is in excess of the amount such Member is obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 3.3 (d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such amount after all other allocations provided for in this Section 3 have been made as if Section 3.3(c) and this Section 3.3(d) were not in the Agreement. (e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Year shall be specially allocated to the Members in proportion to their respective Percentage Interests. (f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Allocation Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1). (g) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset, pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)( m )( 2 ) or 1.704-1 (b)(2)(iv)( m )(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member's. interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with their interests in the Company in the event Regulations Section 1.704-1(b)(2)(iv)( m )( 2 ) applies, or to the Member to whom such distribution was made in the event Regulations Section 1.704-1(b)(2)(iv)( m) (4) applies. (h) Allocations Relating to Taxable Issuance of Interests. Any income, gain, loss or deduction realized as a direct or indirect result of the issuance of Interests by the Company to a Member (the "Issuance Items") shall be allocated among the Members so that, to the extent possible, the net amount of such Issuance Items, together with all other allocations under this Agreement to each Member shall be equal to the net amount that would have been allocated to each such Member if the Issuance Items had not been realized. 3.4 Curative Allocations. The allocations set forth in Sections 3.3(a), 3.3(b), 33(c), 3.3(d), 3.3(e), 3.3 (f), 3.3 (g) and 3.5 (the "Regulatoty Allocations") are intended to comply with certain requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 3.4. Therefore, notwithstanding any other provision of this Section 3 (other than the Regulatory Allocations), the Manager shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Sections 3.1, 3.2, and 3.3(h). Notwithstanding the previous sentence, the Manager shall not make special allocations of income or gain under this Section 3.4 to offset Regulatory Allocations previously made under Sections 3.3(e) and 3.3(f) hereof. 3.5 Loss Limitation. Losses allocated pursuant to Section 3.2 hereof shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to. Section 3.2 hereof, the limitation set forth in this Section 3.5 shall be applied on a Member by Member basis and Losses not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member's Capital Accounts so as to allocate the maximum permissible Losses to each Member under Section 1.704-1 (b)(2)(ii)( d ) of the Regulations. 3.6 Other Allocation Rules. (a) Profits, Losses and any other items of income, gain, loss or deduction shall be allocated to the Members pursuant to this Section 3 as of the last day of each Allocation Year, provided that Profits, Losses and such other items shall also be allocated at such times as are required by Section 10.2 hereof and at such other times as the Gross Asset Values of Company Property are adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1. 10 hereof. (b) For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Manager (except to the extent otherwise provided in Section 10.2 hereof) using any permissible method under Code Section 706 and the Regulations thereunder. (c) The Members are aware of the income tax consequences of the allocations made by this Section 3 and hereby agree to be bound by the provisions of this Section 3 in reporting their shares of Company income and loss for income tax purposes, except as otherwise required by law. (d) Solely for purposes of determining a Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Regulations Section 1.752-3(a)(3), the Members' interests in Company profits are in proportion to their Percentage Interests. (e) To the extent permitted by Section 1.704-2(h)(3) of the Regulations, the Manager shall endeavor to treat distributions of Net Cash Flow as having been made from the proceeds of a Nonrecourse Liability or a Member Nonrecourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Member. (f) Notwithstanding anything to the contrary herein, amounts paid or received by a Member or an Affiliate of a Member as damages or indemnification with respect to any breach or other violation of any representation, warranty, covenant or other agreement made pursuant to Section 7 or 10. 1 hereof (such amounts being referred to in this Section 3.6(f) as a "Damages Payment") shall be treated for income tax purposes as a contribution to or a distribution from the Company, as the case may be, by such Member, provided, however, that a Damages Payment (i) shall not be treated as a Capital Contribution, (ii) shall not cause an adjustment to or otherwise affect Capital Accounts of any Member, (iii) shall not be taken into account in computing Profits or Losses, and (iv) in the case of a Damages Payment to a Member or an Affiliate of a Member, shall not be treated as a distribution of Net Cash Flow; provided further, however, that ( w ) to the extent a Damages Payment required to be paid by a Member or an Affiliate of a Member is with respect to a payment by the Company of an item that is deductible for income tax purposes or results in an increase in the basis of any Company asset that is depreciable, amortizable, or subject to cost recovery, any such deduction or cost recovery allowance shall not be taken into account in computing Profits or Losses, or other items of loss or deduction allocable pursuant to Section 3 of this Agreement, but shall be specially allocated to such Member for income tax purposes, ( x ) to the extent any Damages Payment required to be paid to a Member or an Affiliate of a Member is with respect to the receipt by the Company of an item that constitutes income for income tax purposes, such income shall not be taken into account in computing Profits or Losses or other items of income or gain allocable pursuant to Section 3 of this Agreement, but shall be specially allocated to such Member for income tax purposes, and ( y ) any special allocations pursuant to clauses ( w ) or ( x ) of this Section 3.6(f) shall not affect the Capital Account of any Member. 3.7 Tax Allocations: Code Section 704(c). In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any Property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property to the Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross Asset Value) using the "remedial method" pursuant to the Regulations under Section 704(c). In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder. Any elections or other decisions relating to such allocations shall be made by the Manager in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 3.7 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.
SECTION 4 DISTRIBUTIONS
4.1 Net Cash Flow. Except as otherwise provided in Sections 5.2(i), 10 and 12 hereof, Net Cash Flow, if any, shall be distributed quarterly as soon as practicable after the end of each Fiscal Quarter to the Members in proportion to their Percentage Interests, provided that no distributions shall be made that would create or increase an Adjusted Capital Account Deficit for any Member. 4.2 Amounts Withheld. All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any payment, distribution or allocation to the Company or the Members shall be treated as amounts paid or distributed, as the case may be, to the Members with respect to which such amount was withheld pursuant to this Section 4.2 for all purposes under this Agreement. The Company is authorized to withhold from payments and distributions, or with respect to allocations, to the Members, and to pay over to any federal, state and local government or any foreign government, any amounts required to be so withheld pursuant to the Code or any provisions of any other federal, state or local law or any foreign law, and shall allocate any such amounts to the Members with respect to which such amount was withheld. 4.3 Limitations on Distributions. (a) The Company shall make no distributions to the Members except (i) as provided in this Section 4, Section 5.2(i), Section 10.2 and Section 12 hereof, or (ii) as agreed to by all of the Members. (b) Notwithstanding any other provision of this Agreement, the Company shall not make a distribution to a Member to the extent that, after giving effect to the distribution, all liabilities of the Company, other than liability to Members on account of their Capital Contributions, would exceed the fair value of the Company's assets. For these purposes, the fair value of any asset or assets that are subject to a liability for which the recourse of creditors is limited shall be included in the calculation of the total value of the Company's assets only to the extent the fair value of such asset or assets exceeds such liability. 4.4 Distributions and Payments to Members. It is the intent of the Members and the Manager that no distribution or payment to any Member (including distributions under Sections 4.1, 5.2(i), 10.2 and 12.2 hereof and distributions pursuant to Section 4.3 hereof) shall be deemed a return of money or other property in violation of the Act. The payment or distribution of any such money or property to a Member shall be deemed to be a compromise within the meaning of Section 18-502(b) of the Act, and the Member receiving any such money or property shall not be required to return any such money or property to the Company, any creditor of the Company or any other Person. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to return such money or property, such obligation shall be the obligation of such Member and not of the Company, any other Member, or the Manager. Any amounts required to be paid under such obligation shall be treated as a permitted additional Capital Contribution pursuant to Section 2.2 hereof.
SECTION 5 MANAGEMENT
5.1 Authority of the Manager. The Members intend that the Company be managed by the Members in accordance with Section 18-402 of the Act and subject to any restrictions set forth in the Certificate or this Agreement, including, without limitation, those set forth in Sections 1.3(a) and 6.5 hereof, the Members hereby delegate all powers to control and manage the business and affairs of the Company and to bind the Company to and such powers shall be exclusively vested in, the Manager and the Manager may exercise all powers of the Company and do all such lawful acts as are not by statute, the Certificate or this Agreement directed or required to be exercised or done by the Members and in so doing shall have the right and authority to take all actions which the Manager deems necessary, useful or appropriate for the management and conduct of the Company's business and affairs and in the pursuit of the purposes of the Company, including exercising the following specific rights and powers in the name of and on behalf of the Company: (a) Conduct its business, carry on its operations and have and exercise the powers granted by the Act in any state, territory, district or possession of the United States, or in any foreign country which may be necessary or convenient to effect any or all of the purposes for which it is organized; (b) Acquire by purchase, lease, or otherwise any real or personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Company; (c) Operate, maintain, finance, improve, construct, own, grant options with respect to, sell, convey, assign, mortgage, and lease any real estate and any personal property necessary, convenient, or incidental to the accomplishment of the purposes of the Company; (d) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of the Property, or in connection with managing the affairs of the Company, including, executing amendments to this Agreement and the Certificate in accordance with the terms of this Agreement, both as Manager and, if required, as attorney-in-fact for the Members pursuant to any power of attorney granted by the Members to the Manager'. (e) Borrow money and issue evidences of indebtedness necessary, convenient, or incidental to the accomplishment of the purposes of the Company, and secure the same by mortgage, pledge, or other lien on any Company assets; (f) Execute, in furtherance of any or all of the purposes of the Company, any deed, lease, mortgage, deed of trust, mortgage note, promissory note, bill of sale, contract, or other instrument purporting to convey or encumber any or all of the Company assets; (g) Prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the assets of the Company and in connection therewith execute any extensions or renewals of encumbrances on any or all of such assets; (h) Care for and distribute funds to the Members by way of cash income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Company or this Agreement; (i) Contract on behalf of the Company for the employment and services of employees and/or independent contractors, such as lawyers and accountants, and delegate to such Persons the duty to manage or supervise any of the assets or operations of the Company; (j) Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Company assets and Manager liability) necessary or incidental to, or in connection with, the accomplishment of the purposes of the Company, as may be lawfully carried on or performed by a limited liability company under the laws of each state in which the Company is then formed or qualified; (k) Take, or refrain from taking, all actions, not expressly proscribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the' Company; (l) Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Company, the Members or the Manager in connection with activities arising out of connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith; (m) Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign corporations, associations, general or limited partnerships, other limited liability companies, or individuals or direct or indirect obligations of the United States or of any government, state, territory, government district or municipality or of any instrumentality of any of them; (n) Indemnify a Member or the Manager or former Member or Manager in accordance with this Agreement, and to make any other indemnification that is authorized by this Agreement in accordance with the Act; (o) Acquire, invest Company funds in, hold and sell, transfer or otherwise dispose of Permitted Investments; (p) Acquire the AIMC stock and cause AIMC to invest in, hold and sell, transfer or otherwise dispose of Permitted Investments; (q) Execute and deliver on behalf of the Company (i) the RAMP Investments Contribution Agreement, (ii) the PCI Master Lease, (iii) any PCI Note, (iv) the Aircraft Lease Documents, and (v) any other document or instrument to be delivered in connection with any of the foregoing; and (r) Be the sole "authorized person" on behalf of the Company, as that term is defined in the Act. 5.2 Duties and Obligations of the Manager. (a) The Manager shall take all actions which may be necessary or appropriate (i) for the continuation of the Company's valid existence as a limited liability company under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Members or to enable the Company to conduct the business in which it is engaged and (ii) for the accomplishment of the Company's purposes, including the acquisition, development, maintenance, preservation, and operation of Property in accordance with the provisions of this Agreement and applicable laws and regulations. (b) The Manager shall be under a fiduciary duty to conduct the affairs of the Company in the best interests of the Company and of the Members, including the safekeeping and use of all of the Property and the use thereof for the exclusive benefit of the Company. (c) Prior to or contemporaneously with the Company's acquisition of any item of Leased Equipment, the Manager shall execute and deliver to the Company a certificate regarding the lease to which such Leased Equipment is subject in the form of the Lease Certificate attached hereto as Exhibit E . (d) The Manager will cause one of the following to occur within ninety (90) days after the default or termination of any lease of Leased Equipment (the "Defaulted Lease"):
	(i) The Manager will cause the Company to lease the Leased Equipment to PCI pursuant to a lease substantially in the form of the PCI Master Lease attached hereto as Exhibit F (the "PCI Master Lease ") at then fair market value rental rates for a period of time so that the PCI Master Lease qualifies as a Full Payout Lease, provided that, if then current market conditions do not permit the PCI Master Lease to qualify as a Full Payout Lease, the Manager must choose another alternative pursuant to clause (ii) or (iii) below. (ii) The Manager will cause the Company to lease the Leased Equipment to a new lessee (the "Post Default Lease") at then fair market value rental rates so that the Post Default Lease qualifies as a Full Payout Lease, provided that if then current market conditions do not permit the Post Default Lease to qualify as a Full Payout Lease, the Manager must choose another alternative pursuant to clause (i) above or (iii) below. (iii) The Manager will cause the Company to sell the Leased Equipment in a commercially reasonable manner.
(e) In the event that any rent received with respect to, or the proceeds of the sale of, any Permitted Investment is paid to the Company in non-cash consideration which is not itself a Permitted Investment, the Manager shall cause the Company to sell or otherwise dispose of such consideration in a commercially reasonable manner within ninety (90) days of its acquisition. (f) The Company shall at all times procure or cause to be procured and maintain or cause to be maintained with insurers of recognized responsibility, and substantial financial capacity, in the worldwide commercial aviation, watercraft or railcar industry, as the case may be, primary insurance and contingent liability and property damage liability insurance insuring the respective interests of each Member of the Company of the type and in amounts in accordance with prudent industry practice for persons owning, operating or using aircraft, watercraft or railcars, as the case may be, which covers the kinds of risks customarily insured and in amounts consistent with prudent industry practice; provided however, that all contingent aircraft public liability insurance and aircraft property damage liability insurance shall have a combined single limit of not less than $500,000,000. (g) As soon as practicable after the Effective Date, the Manager shall cause the Company to invest in Permitted Investments described in clauses (i) or (ii) of the definition of "Permitted Investments" in Section 1.10 hereof in an amount equal to the cash Capital Contributions of the Members made pursuant to Section 2.1 hereof reduced by any transaction fees and expenses required to be paid by the Company at inception, provided that, until the earlier to occur of the ninetieth (90th) day after the Effective Date or the date on which RAMP Investments has made the entire Capital Contribution required by Section 2.1 hereof, the Manager shall cause the Company to invest such cash in PCI Notes that are payable on demand. (h) As soon as practicable after the Effective Date, the Manager shall cause the Company to pay costs and expenses attributable to the formation of the Company including, without limitation, legal and accounting fees and $1,500,000 payable to Bankers Trust Company. (i) In the event that RAMP Investments has not made the entire Capital Contribution required by Section 2.1 hereof within the ninety (90) day period after the Effective Date, the Company shall distribute as soon as practicable after the nineteenth day after the Effective Date, (i) to RAMP Investments, an amount equal to the aggregate amount that RAMP Investments is required to distribute to its members pursuant to Section 5.2(k) of the Operating Agreement of RAMP Investments, L.L.C., and (ii) to PCI Air Co, an amount such that the percentage obtained by dividing the Net Contribution Value contributed to the Company by PCI Air Co by the Net Contribution Value contributed to the Company by RAMP investments and PCI Air Co, reduced by any distribution made to RAMP Investments pursuant to this Section 5.2(i), is equal to one percent (1%). 5.3 Compensation; Expenses. (a) Compensation and Reimbursement. Except as otherwise provided in this Section 5.3 and Section 5.4 hereof, no Manager or Member shall receive any salary, fee, or draw for services rendered to or on behalf of the Company or otherwise in its capacity as a Manager or Member, nor shall any Manager or Member be reimbursed for any expenses incurred by such Manager or Member on behalf of the Company or otherwise in its capacity as a Manager or Member. (b) Expenses. The Manager shall pay all ordinary and customary expenses of the Company incurred in the ordinary course of the Company's day-to-day business in exchange for a management fee paid to the Manager in an amount equal to $50,000 per year payable quarterly in arrears. In addition, with the consent of the Members, the Manager may charge the Company, and shall be reimbursed, for other reasonable expenses (such as litigation costs) incurred in connection with the Company's business that would not be considered to be incurred in the ordinary course of the Company's day-to-day business. Such reimbursement shall be treated as expenses of the Company and shall not be deemed to constitute distributions to any Member of profit, loss or capital of the Company. 5.4 Indemnification of the Manager. (a) Unless otherwise provided in Section 5.4(d) hereof, the Company, its receiver, or its trustee (in the case of its receiver or trustee, to the extent of Company Property) shall indemnify, save harmless, and pay all Expenses of the Manager or any officers or directors of the Manager relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Manager, officer or director in connection with the business of the Company, including attorneys' fees incurred by the Manager, officer or director in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, including all such liabilities under federal and state securities laws (including the Securities Act) as permitted by law. (b) Unless otherwise provided in Section 5.4(d) hereof, in the event of any action by a Member against the Manager, including a Company derivative suit, the Company shall indemnify, save harmless, and pay all Expenses of the Manager, incurred in the defense of such action, if the Manager is successful in such action. (c) Unless otherwise provided in Section 5.4(d) hereof, the Company shall indemnify, save harmless, and pay all Expenses of the Manager, if for the benefit of the Company and in accordance with this Agreement the Manager makes any deposit, acquires any option or makes any other similar payment or assumes any obligation in connection with any Property proposed to be acquired by the Company and suffers any financial loss as the result of such action. (d) Sections 5.4(a), 5.4(b) and 5.4(c) shall be enforced only to the maximum extent permitted by law and the Manager shall not be indemnified from any liability for fraud, bad faith, intentional misconduct, gross negligence or a failure to perform in accordance with this Agreement. (e) Notwithstanding anything to the contrary in this Agreement, in no event will any indemnification obligation of the Company or a receiver or trustee to indemnify, save harmless or pay all Expenses set forth in this Section 5.4 subject any Member to personal liability. 5.5 Temporary Investments. All property in the form of cash not otherwise invested shall be deposited for the benefit of the Company in one or more accounts of the Company, the Manager or any of its Wholly Owned Affiliates maintained in such financial institutions as the Manager shall determine or shall be invested in short-term liquid securities or other cash-equivalent obligations of such financial institutions or of the United States (or institutions whose obligations are guaranteed as to payment by the United States), and withdrawals shall be made only in the regular course of Company business on such signature or signatures as the Manager may determine from time to time. Such financial institutions must have outstanding unsecured indebtedness that is rated AA or better by S&P or Aa2 or better by Moody's (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating unsecured bank indebtedness). 5.6 Manager's Liability. Without limiting the Manager's liability to the Company for any breach of or failure to perform its covenants and obligations hereunder, no Manager shall be liable under a judgment, decree or order of a court, or in any other manner for the Debts or any other obligations or liabilities of the Company solely by reason of being a manager of the Company. The Manager shall not have any personal liability for the repayment of any Capital Contributions of any Member. 5.7 Withdrawal, Removal and Termination. (a) Withdrawal of Manager. The Manager may not withdraw as Manager of the Company without the consent of the Members. (b) Removal of a Manager. The Manager may be removed at any time For Cause at the discretion of RAMP Investments. In the event a Manager is removed For Cause at the direction of RAMP Investments, RAMP Investments will appoint, with the consent of the other Members which shall not be unreasonably withheld, the replacement Manager. For purposes of this Agreement, the term "For Cause" shall mean fraud, bad faith, intentional misconduct or gross negligence of the Manager in the performance of its obligations under this Agreement. (c) Termination of Manager by Operation of Law In the event of the Bankruptcy, dissolution or other termination of the Manager by operation of law, the Manager shall be deemed withdrawn as Manager hereunder upon the election of a successor pursuant to Section 5.7(d) hereof. (d) Election of Successor Manager Except as otherwise provided in Section 5.7(b), upon the withdrawal, removal or other termination of a Manager pursuant to this Agreement, the Members shall appoint a successor Manager to serve hereunder by consent. Such successor Manager shall be required to consent to being bound by the provisions of this Agreement in writing. Upon so consenting, such successor Manager shall be deemed admitted to the Company as a Manager. (e) Effect of Removal, Withdrawal or Termination. Any removal, termination by operation of law or withdrawal of a Manager that is also a Member of the Company shall not affect the status of such Manager as a Member, except to the extent otherwise provided herein.
SECTION 6 ROLE OF MEMBERS
6.1 Rights or Powers. The Members, in their capacities as members of the Company, hereby agree not to exercise any right or power to take part in the management or control of the Company or its business and affairs or to act for or bind the Company in any way. Notwithstanding the foregoing, the Members have all of the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act. 6.2 Voting Rights. No Member has any voting right except with respect to those matters specifically reserved for a Member vote which are set forth in this Agreement and as required in the Act. 6.3 Meetings and Consents of the Members. (a) Meetings of the Members may be called by the Manager and shall be called upon the written request of any Member. The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Members not less than ten (10) Business Days nor more than thirty (30) days prior to the date of such meeting. Members may vote in person, by proxy or by telephone at such meeting and may waive advance notice of such meeting. Whenever the vote or consent of Members is permitted or required under the Agreement, such vote or consent may be given at a meeting of the Members or may be given in accordance with the procedure prescribed in Section 6.4. Except as otherwise expressly provided in this Agreement, the unanimous vote or consent of the Members shall be required to constitute the act of the Members or the consent of the Members. (b) For the purpose of determining the Members entitled to vote on, or to vote at, any meeting of the Members or any adjournment thereof, the Manager or the Member requesting such meeting may fix, in advance, a date as the record date for any such determination. Such date shall not be more than thirty (30) days nor less than ten (10) Business Days before any such meeting. (c) Each Member may authorize any Person or Persons to act for it by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or its attorney-in-fact. No proxy shall be valid after the expiration: of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it. (d) Each meeting of Members shall be conducted by the Manager or such other individual Person as the Manager deems appropriate pursuant to such rules for the conduct of the meeting as the Manager or such other Person deems appropriate. 6.4 Procedure for Consent In any circumstances requiring the agreement, approval or consent of the Members specified in this agreement, such agreement, approval or consent may, except where a standard for such agreement, approval or consent is provided for expressly in this Agreement, be given or withheld in the sole and absolute discretion of the Members, and each Member shall be entitled to consider only such factors and interest ' s as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person. If the Manager receives the necessary agreement, approval or consent of the Members to such action, the Manager shall be authorized and empowered to implement such action without further authorization by the Members. Such agreement, approval or consent must be obtained in writing or by telephone or facsimile, if such telephone conversation or facsimile is followed by a written summary of the telephone conversation or facsimile communication sent by overnight courier, registered or certified mail, postage and charges prepaid, addressed as described in Section 13'. 1 hereof, or to such other address as such Person may. From time to time specify by notice to the Members and the Manager. 6.5 Required Member Consents. Notwithstanding any other provision of this Agreement, the Manager shall not have the authority to, and covenants and agrees that it shall not, do any of the following acts without the consent of the Members: (a) Cause or permit the Company to engage in any activity that is not consistent with the purposes of the Company as set forth in Section 1.3 hereof, (b) Knowingly do any act in contravention of this Agreement; (c) Confess a judgment against the Company in an amount in excess of $ 100,000; (d) Cause the Company to merge or consolidate with another Person; (e) Cause the Company to dissolve; (f) Knowingly do any act which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Agreement; (g) Possess Property, or assign rights in specific Property, for other than a Company purpose; (h) Cause the Company to take any action that would cause a Bankruptcy of the Company; (i) Cause a significant change in the nature of the Company's business or make any amendment, consent, waiver, or other modification with respect to the Articles of Incorporation of AIMC, any Permitted Investment, the RAMP Investments Contribution Agreement, or the Aircraft Lease Documents; (j) Cause the Company to admit any additional Members or issue any additional Interests or to effect any redemption or retirement of any part of an Interest (other than a retirement pursuant to Section 10.2(b) hereof); (k) Cause the Company to incur, assume, or obligate itself by contract for any Debt in the aggregate in excess of $50,000, except that the Company may incur, assume or obligate itself by contract for (i) liabilities described in Sections 5.1(q) and 5.3(b) hereof, and (ii) current trade liabilities incurred in the ordinary course of the Company's trade or business and payable in accordance with customary practices; (l) Cause the Company to refinance, recast, increase, modify, or extend any, liabilities affecting the Property and in connection therewith execute any extensions or renewals of encumbrances on any or all of the Property; (m) Cause the Company to acquire directly any assets other than the following: (i) Capital Contributions, (ii) Permitted Investments acquired pursuant to Section 5.2(g) hereof, (iii) the stock of AIMC, and (iv) ancillary rights arising from the transactions contemplated hereby; (n) Cause the Company to acquire indirectly through AIMC any assets other than the following: (i) Permitted Investments and (ii) cash proceeds and ancillary rights arising from the transactions contemplated hereby; and (o) Cause the Company to make any contributions to AIMC. 6.6 Withdrawal/Resignation. Except as otherwise provided in Sections 4, 10 and 12. hereof, no Member shall demand or receive a return on or of its Capital Contributions or withdraw or resign from the Company without the consent of all Members. If any Member resigns or withdraws from the Company in breach of this Section 6.6, such resigning or withdrawing Member shall not be entitled to receive any distribution under this Agreement. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive Property other than cash except as may be specifically provided herein. 6.7 Member Compensation. No Member shall receive any interest, salary or drawing With respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company, or otherwise, in its capacity as a Member, except as otherwise provided in this Agreement. 6.8 Members Liability. No Member shall be liable under a judgment, decree or order of a court, or in any other manner for the Debts or any other obligations or liabilities of the Company. A Member shall be liable only to make its Capital Contributions and shall not be required to restore a deficit balance in its Capital Account or to lend any funds to the Company or, after its Capital Contributions have been made, to make any additional contributions, assessments or payments to the Company, provided that a Member may be required to repay distributions made to it as provided in Section 18-607 of the Act subject to Section 4.4 hereof. 6.9 Partition. While the Company remains in effect or is continued, each Member agrees not to have any Company Property partitioned or file a complaint or institute any suit, action or proceeding at law or in equity to have any Company Property partitioned, and each Member, on behalf of itself its successors and its assigns hereby waives any such right. 6.10 Transactions Between a Member or Manager and the Company. Except as otherwise provided by applicable law, any Member or Manager may, but shall not be obligated to, enter into the transactions described in Sections 1.9(c), 1.9(d) and 1.9(e) hereof and transact other business with the Company and has the same rights and obligations when transacting such business with the Company as a Person or entity who is not a Member or Manager. A Member or Manager, any Affiliate thereof or an employee, stockholder, agent, director or officer of a Member or Manager or any Affiliate thereof, may also be an employee or be retained as an agent of the Company. 6.11 Other Instruments. Each Member hereby agrees to execute and deliver to the Company within five (5) Business Days after receipt of a written request therefor, such other and further documents and instruments, statements of interest and holdings, designations, powers of attorney and other instruments and to take such other action as the Manager deems necessary, useful or appropriate to comply with any laws, rules or regulations as may be necessary to enable the Company to fulfill its responsibilities under this Agreement.
SECTION 7 REPRESENTATIONS AND WARRANTIES
7.1 In General. As of the date hereof, each of the Members hereby makes each of the representations and warranties applicable to such Member as set forth in Section 7.2 hereof, and such warranties and representations shall survive the execution of this Agreement. 7.2 Representations and Warranties. Each Member hereby represents and warrants to the Company and, each other Member that: (a) Due Incorporation or Formation; Authorization of Agreement. Such Member is a corporation duly organized or a partnership or limited liability company duly formed, validly existing, and in good standing under the laws of the jurisdiction of its incorporation or formation and has the corporate, partnership, or limited liability company power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Member is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to. be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Member has the corporate, partnership or limited liability company power and authority to execute and deliver this Agreement and to perform its obligations hereunder and the execution, delivery, and performance of this Agreement has been duly authorized by all necessary corporate, partnership, or company action. This Agreement constitutes the legal, valid, and binding obligation of such Member. (b) No Conflict with Restrictions; No Default. Neither the execution, delivery, and performance of this Agreement nor the consummation by such Member of the transactions contemplated hereby (i) will conflict with, violate, or result in a breach, whether with notice or lapse of time or both, of any of the terms, conditions, or provisions of any law, regulation, order, writ, injunction, decree, determination, or award of any court, any governmental department, board, agency, or instrumentality; domestic or foreign, or any arbitrator, applicable to such Member, (ii) will conflict with, violate, result in a breach of, or constitute a default under, whether with notice or lapse of time or both, any of the terms, conditions, or provisions of the articles of incorporation, bylaws, partnership agreement or operating agreement of such Member, (iii) will conflict with, violate, result in a breach of, constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights, or require any consent, authorization, or approval under any indenture, note, bond, mortgage, lease agreement, or other instrument or agreement to which such Member is a party or by which such Member is or may be bound, or (iv) will result in the creation or imposition of any lien, claim, charge or encumbrance upon any of the material properties or assets of such Member. (c) Governmental Authorizations. Any registration, declaration, or filing with, or consent, approval, license, permit, or other authorization or order by, any governmental or regulatory authority, domestic or foreign, that is required in connection with the valid execution, delivery, acceptance and perf6rinance by such Member of its obligations under this Agreement or the consummation by such Member of any transaction contemplated hereby has been completed, made, or obtained on or before the Effective Date. (d) Litigation. There are no actions, suits, proceedings, or investigations pending or, to the knowledge of such Member, threatened against or affecting such Member or any of its properties, assets, or businesses in any court or before or by any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit, or proceeding which could, if adversely determined), reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member; and such Member has not received any currently effective notice of any default, and such Member is not in default (whether with notice or lapse of time or both), under any applicable order, writ, injunction, decree, permit, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member. (e) Public Utility Holding Company Act. Such Member and each of its Affiliates is not, nor will the Company or any of its Members as a result of such Member holding an Interest therein be, a "holding company," an "affiliate of a holding company," a "subsidiary of a holding company," or an "associate company," as defined in, or subject to regulation under, the Public Utility Holding Company Act of 193 5, as amended, or the regulations promulgated thereunder. (f) Subsidiary. All of the outstanding capital stock or ownership interests in the capital and profits of such Member (other than RAND Investments) is owned, directly or indirectly, by its Parent. (g) Investigation. Such Member is acquiring its Interest based upon its own investigation, and the exercise by such Member of its rights and the performance of its obligations under this Agreement will be based upon its own investigation, analysis, and expertise. Such Member's acquisition of its Interest is being made for its own account for investment and not with a view to the sale or distribution thereof Such Member is a sophisticated investor possessing an expertise in analyzing the benefits and risks associated with acquiring investments that are similar to the acquisition of its Interest. (h) Citizenship. Such Member is and, except as may be consented to by the other Members (which consent shall not be unreasonably withheld), shall remain throughout the term of the Company, a "citizen of the United States" within the mewing of Section 101(16) of the Federal Aviation Act and shall notify the Manager immediately upon becoming aware of any fact or circumstance that would lead reasonably to the conclusion that such Member is at risk of losing such citizenship. (i) ERISA. Such Member is not acquiring its Interest in the Company with the assets of any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or any "plan" within the meaning Section 4975(e)(1) of the Code. 7.3 Limitation on Damages for Breach of Representations or Warranties/Damage Payments. (a) Notwithstanding any other provision of this Agreement, or any other law, rule, or regulation, each Member shall in no event be liable to the Company, the Members or any Affiliate of any of them for any amount in excess of $5,000,000 in the aggregate for all claim resulting from, related to, or in connection with the breach or other violation of any representation, warranty, covenant or agreement contained herein. (b) Any damages, indemnification or other payments made to the Company with respect to any breach or other violation of any representation, warranty, covenant or other agreement made pursuant to this Section 7, to the extent paid with respect to costs, liabilities or damages incurred by a Member or an Affiliate thereof, shall immediately be paid by the Company to such Member or Affiliate.
SECTION 8 ACCOUNTING, BOOKS AND RECORDS
8.1 Accounting, Books and Records. (a) The Company shall keep on site at its principal place of business each of the following:
	(i) Separate books of account for the Company which shall show a true and accurate record in United States dollars of all costs and expenses incurred, all charges made, all credits made and received, and all income derived in connection with the conduct of the Company and the operation of its business in accordance with the Modified Tax Basis of Accounting; (ii) Separate books of account that reflect the Capital Accounts of the Members as maintained pursuant to the provisions of this Agreement; (iii) A current list of the full name and last known business, residence, or mailing address of each Member, both past and present; (iv) A copy of the Certificate and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been executed, (v) Copies of the Company's federal, state, and local income tax returns and reports, if any, for the six most recent years; (vi) Copies of this Agreement; (vii) Copies of any writings permitted or required under Section 18-502 of the Act regarding the obligation of a Member to perform any enforceable promise to contribute cash or property or to perform services as consideration for such Member's Interest including, without limitation, the RAMP Investments Contribution Agreement; and (viii) Any written consents obtained from Members pursuant to Section 18302 of the Act regarding action taken by Members without a meeting.
(b) The Company shall use the accrual method of accounting in preparation of its financial reports and for tax purposes and shall keep its books and records accordingly. Any Member or its designated representative has the right at its own cost and expense, at any reasonable time, to have access to and inspect and copy the contents of such books or records. Such Member shall reimburse the Manager for reasonable costs incurred as a result of such inspection. Notwithstanding anything in the Act (including Section 18-305(c) of the Act) or this Agreement to the contrary, the Manager shall not have the right to keep confidential from any Member any information concerning the Company. 8.2 Reports. (a) In General. The Manager shall be responsible for causing the preparation of financial reports of the Company and the coordination of financial matters of the Company with the Company's accountants. (b) Periodic Reports. The Company shall cause to be delivered to each Member the financial statements listed in clauses (i) and (ii) below, prepared in each case in accordance with the Modified Tax Basis of Accounting. The quarterly financial statements referred to in clause (ii) below may be subject to normal year-end audit adjustments.
	(i) Within ninety (90) days after the end of each Fiscal Year and at such time as distributions are made to the Members pursuant to Section 12 hereof following the occurrence of a Dissolution Event, a balance sheet of the Company as of the end of such Fiscal Year and the related statements of operations, Members' Capital Accounts and changes therein, and cash flows for such Fiscal Year, together with appropriate notes to such financial statements and supporting schedules, all of which shall be audited and certified by the Company's accountants to be fairly stated in all material respects. (ii) Within sixty (60) days after the end of each of the first three Fiscal Quarters of each Fiscal Year, a balance sheet of the Company as of the end of such Fiscal Quarter and the related statements of operations, cash flows and Net Cash Flow, each as prepared by the Manager for such Fiscal Quarter.
(c) Retirement Date Reports. The Manager shall cause to be prepared and each Member furnished with (x) on the date on which any distribution is made pursuant to Section 10.2(b) hereof in retirement of RAMP Investments entire Interest each of the following statements together with a certificate of the Manager executed by a financial officer thereof familiar with the financial affairs of the Company that such statements have been prepared in accordance with this Agreement subject to adjustment by the audited statements to be provided pursuant to clause (y), and (y) not later than one hundred twenty (120) days after the date described in clause (x), certification by an office of an internationally recognized accounting firm selected by the Manager that such statements have been prepared in accordance with this Agreement:
	(i) A balance sheet as of the Retirement Allocation Date; and (ii) A statement of the Members' Capital Accounts as adjusted pursuant to Section 10.2(b) hereof.
8.3 Tax Matters. (a) Tax Elections. The Manager is specifically authorized to act as the "Tax Matters Member" under the Code and in any similar capacity under state or local law. The Tax Matters Member shall have the authority without any further consent of the Members being required (except as specifically required herein), to make any and all elections for federal, state, local, and foreign tax purposes including, without limitation, any election, if permitted by applicable law: (i) to adjust the basis of Property pursuant to Code Sections 754, 734(b) and 743(b), or comparable provisions of state, local or foreign law, in connection with Transfers of Interests and Company distributions; (ii) to extend the statute of limitations for assessment of tax. deficiencies against the Members with respect to adjustments to the Company's federal, state, local or foreign tax returns; and (iii) to the extent provided in Code Sections 6221 through 6231 and similar provisions of federal, state, local, or foreign law, to represent the Company and the Members before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Members in their capacities as Members, and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Company and the Members; provided that, to the extent any such agreement, election, or document might have a material adverse effect on any Member, such Member must consent in writing to such agreement, election, or document and the Tax Matters Member must reasonably consult with such Member in any discussions or negotiations associated with such agreement or document. (b) Tax, Information. Necessary tax information shall be delivered by the Manager to each Member as soon as practicable after the end of each Fiscal Year of the Company but not later than three and one-half (3-1/2) months after the end of each Fiscal Year. The Manager will provide an estimate of such tax information to each Member within sixty (60) days after the end of each Fiscal Year.
SECTION 9 AMENDMENTS
Amendments to this Agreement may be proposed by the Manager or any Member. Following such proposal, the Manager shall submit to the Members a verbatim statement of any proposed amendment, providing that counsel for the Company shall have approved of the same in writing as to form, and the Manager shall include in any such submission a recommendation as to the proposed amendment. The Manager shall seek the written vote of the Members on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto if it receives the affirmative vote of all of the Members.
SECTION 10 TRANSFERS
10. 1 Restrictions on Transfers. No Member shall Transfer all or any portion of its Interest. A Transfer of all or a portion of an Interest includes, without limitation, (a) a Transfer of a beneficial interest in a grantor trust that holds an Interest and (b) an event that causes a grantor trust that holds an Interest not to be treated as a grantor trust for federal income tax purposes. Any purported Transfer of an Interest shall be null and void and of no force or effect whatever, provided that, if the Company is required to recognize a Transfer, the interest transferred shall be strictly limited to the transferor's rights to allocations and distributions as provided by this Agreement with respect to the transferred Interest, which allocations and distributions may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Interest may have to the Company as a substituted member, and such transferee shall not have any right to any information or accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement; and the transferor will continue to be a Member of the Company. In the case of an attempted Transfer of an Interest, the parties attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Company and the other Members from all cost, liability, and damage that the Company or any of such indemnified members may incur (including, without limitation, incremental tax liabilities, lawyers' fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby. Any indemnification payments made to the Company under this Section 10, to the extent paid with respect to costs, liabilities or other damages incurred by a Member, shall immediately be paid by the Company to such Member. 10.2 Retirement of RAMP Investments Interest. (a) RAMP Investments' Retirement Election. In the event that either the manager of RAMP Investments or BT Investor elects to retire BT Investor's interest in RAMP Investments, RAMP Investments may elect to require the Company to retire a portion of its Interest by distributing to it an amount equal to the amount required to be distributed by RAMP Investments to BT Investor by giving written notice of its election to the Company and to all other Members which notice shall include the amount to be distributed (the "Retirement Amount'). Any notice given under this Section 10.2(a) shall state the date on which the distribution required by Section 10.2(b) hereof shall be made to RAMP Investments (the "Retirement Date"), which date shall not be earlier than thirty (30) Business Days following the date of such notice. (b) Distributions Upon Retirement of RAMP Investments' Remaining Interest
	(i) In the event that a portion of RAMP Investments' Interest is retired pursuant to Section 10.2(a) hereof, (x) the value of the Company's assets shall be determined in accordance with this Section 10.2(b) and the Gross Asset Values of all Company assets shall be adjusted pursuant to subparagraph (h) of the definition of "Gross Asset Value" in Section 1.10 hereof as of the day on which RAMP Investments delivers the notice described in Section 10.2(a) (the "Retirement Allocation Date"), (Y) Profits, Losses, and other items of Company income, gain, loss or deduction for the period beginning on the first day of the Allocation Year during which the Retirement Allocation Date occurs and ending on the Retirement Allocation Date (including Profits and Losses resulting from adjustment of the Gross Asset Value of Property) shall be allocated pursuant to Section 3 hereof, and (z) no Profits or Losses for the period beginning on the first day after the Retirement Allocation Date (including Profits or Losses attributable to periods subsequent to the adjustment of Gross Asset Values of Property pursuant to 66-Section 10.2(b)) shall be allocated to RAMP Investments with respect to t6, portion of its Interest being retired (however, other required allocations, including those required by Regulation Section 1. 704- 1 (b)(2)(iv)( f ), Section 704(c) of the Code or Section 3.3 shall continue to be made to RAMP Investments after the Retirement Allocation Date). (ii) On the applicable Retirement Date, the Company shall distribute to RAMP Investments an amount of cash and/or property (as determined pursuant to the following sentence) in an amount equal to the Retirement Amount. Unless otherwise unanimously agreed by the Members, the distribution to RAMP Investments under this Section 10.2(b)(ii) shall consist of an undivided interest in each item of Property other than cash and a proportionate share of the Company's cash (including cash resulting from the sale of Property or the repayment of Permitted Investments) subject to a proportionate share of the Company's liabilities, such undivided interest and proportionate share in each case being equal to the ratio of Retirement Amount to the aggregate balances of the Capital Accounts of all of the Members immediately after giving effect to the adjustments and allocations required by Section 10.2(b)(i) hereof and as reflected on the statement of Capital Accounts provided to the Members pursuant to Section 8.2(c)(ii) hereof. If the Capital Account balance of BT Investor is zero or negative, the BT Investor shall receive no distribution, nor shall it assume any liability. (iii) For purposes of determining the amount of any adjustment to the Gross Asset Values of Company assets pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1. 10 hereof, the value of each of the Company's assets on the Retirement Allocation Date will be equal to its Appraised Value. The Appraised Values shown on such appraisal shall be binding upon the Members. The Company shall bear the cost of any appraisal.
SECTION 11 POWER OF ATTORNEY
11.1 Manager as Attorneys-In-Fact. (a) Appointment Each Member hereby makes, constitutes, and appoints the Manager, with full power of substitution and resubstitution, its true and lawful attorney-in fact for it and in its name, place, and stead and for its use and benefit, to sign, execute, certify, acknowledge, swear to, file, publish and record (i) all certificates of formation, amended name or similar certificates, and other certificates and instruments (including counterparts of this Agreement) which the Manager may deem necessary to be filed by the Company under the laws of the State of Delaware or any other jurisdiction in which the Company is doing or intends to do business; (ii) any and all amendments, restatements or changes to this Agreement and the instruments described in clause (i), as now or hereafter amended, which the Manager may deem necessary to effect a change or modification of the Company in accordance with the terms of this Agreement, including, without limitation, amendments, restatements or changes to reflect (A) the exercise by the Manager of any power granted to it under this Agreement, and (B) the disposition by any Member of its Interest; (iii) all certificates of cancellation and other instruments which the Liquidator deems necessary or appropriate to effect the dissolution and termination of the Company pursuant to the terms of this Agreement; and (iv) any other instrument which is now or may hereafter be required by law to be filed on behalf of the Company or is deemed necessary by the Manager to carry out fully the provisions of this Agreement in accordance with its terms. Each Member authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary in connection with any of the foregoing, hereby giving each such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite to be done in connection with the foregoing as fully as such Member might or could do personally, and hereby ratify and confirm all that any such attorney-in-fact shall lawfully do, or cause to be done, by virtue thereof or hereof. (b) Form of Signature. To the extent the laws of any jurisdiction in which the Company engages in business require that a Member sign, execute, certify, acknowledge, swear to, file, or record a certificate or other document, such certificate or other document, shall be executed in the form set forth below:
	RAMP Investments, Member
		By: PCI Air Management Corportion, attomey-in-fact under Power of Attorney, dated November 13, 1995 By: Title:
11. 2 Nature of Special Power. The power of attorney granted to each Manager pursuant to this Section 11: (a) Is a special power of attorney coupled with an interest and is irrevocable; (b) May be exercised by any such attorney-in-fact by listing the Members executing any aggreement, certificate, instrument, or other document with the single signature of any such attorney-in-fact acting as attorney-in-fact for such Members; and (c) Shall survive and not be affected by the subsequent Bankruptcy, insolvency, dissolution, or cessation of existence of a Member.
SECTION 12 DISSOLUTION AND WINDING UP
12.1 Dissolution Events. (a) Dissolution. The Company shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a "Dissolution Event"):
	(i) The unanimous vote of the Members to dissolve, wind up, and liquidate the Company; (ii) A judicial determination that an event has occurred that makes it unlawful, impossible or not reasonably practicable to carry on the business of the Company; (iii) The Bankruptcy, dissolution, retirement, resignation or expulsion of any Member or the occurrence of any other event which terminates the continued membership of a Member under the Act; provided that any such event will not be deemed a Dissolution Event in the event that there are at least two remaining Members and each remaining Member agrees to continue the business of the Company within ninety (90) days after the occurrence of such an event; (iv) The Company shall default in its obligation to retire RAMP Investments following RAMP Investments election to retire its Interest pursuant to Section 10.2(a) hereof, or (v) The passage of twenty years after the formation of the Company. The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not dissolve prior to the occurrence of a Dissolution Event.
(b) Reconstitution. If it is determined, by a court of competent jurisdiction, that the Company has dissolved prior to the occurrence of a Dissolution Event, then within an additional ninety (90) days after such determination (the "Reconstitution Period"), all of the Members may elect to reconstitute the Company and continue its business on the same terms and conditions set forth in this Agreement by forming a new limited liability company on terms identical to those set forth in this Agreement. Unless such an election is made within the Reconstitution Period, the Company shall dissolve and wind up its affairs in accordance with Section 12.2 hereof .If such an election is made within the Reconstitution Period, then:
	(i) The reconstituted limited liability company shall continue until the occurrence of a Dissolution Event as provided in Section 12. 1 (a); (ii) Unless otherwise agreed to by all of the Members, the Certificate and this Agreement shall, subject to any requirement under the Act to file a new certificate of formation, automatically constitute the Certificate and Agreement of such new Company. All of the assets and liabilities of the dissolved Company shall be deemed to have been automatically assigned, assumed, conveyed and transferred to the new Company. No bond, collateral, assumption or release of any Member's or the Company's liabilities shall be required; provided that the right of the Members to select successor managers and to reconstitute and continue the business of the Company shall not exist and may not be exercised unless the Company has received an opinion of counsel that the exercise of the right would not result in the loss of limited liability of any Member and neither the Company nor the reconstituted limited liability company would cease to be treated as a partnership for federal income tax purposes upon the exercise of such right to continue.
12.2 Winding Up. Upon the occurrence of (i) a Dissolution Event or (h) the determination by a court of competent jurisdiction that the Company has dissolved prior to the occurrence of a Dissolution Event (unless the Company is reconstituted pursuant to Section 12.1(b) hereof), the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company's business and affairs, provided that, to the extent not inconsistent with the foregoing, all covenants contained in this Agreement and obligations provided for in this Agreement shall continue to be fully binding upon the Members until such time as the Property has been distributed pursuant to this Section 12.2 and the Certificate has been canceled pursuant to the Act. The Liquidator shall be responsible for overseeing the winding up and dissolution of the Company, which winding up and dissolution shall be completed within sixty (60) days of the occurrence of the Dissolution Event and within ninety (90) days after the last day on which the Company may be reconstituted pursuant to Section 12. 1 (b) hereof The Liquidator shall take full account of the Company's liabilities and Property and shall cause the Property or the proceeds from the sale thereof (as determined pursuant to Section 12. 10 hereof), to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order: (a) First, to creditors (other than the Manager but including other Members who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Company's debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for distribution to Members under Section 18-601 or 18-604 of the Act; (b) Second, to the Manager, in its capacity as a creditor of the Company, in satisfaction of all of the Company's debts and liabilities (whether by payment or the making of reasonable provision for payment thereof); (c) Third, except as provided in this Agreement, to Members and former Members of the Company in satisfaction of liabilities for distribution under Sections 18-601 or 18-604 of the Act; and (d) The balance, if any, to the Members in accordance with the positive balance in their Capital Accounts, after giving effect to all contributions, distributions and allocations for all periods. Except as provided in Section 12.9, no Member or Manager shall receive additional compensation for any services performed pursuant to this Section 12. The Manager understands and agrees that by accepting the provisions of this Section 12.2 setting forth the priority of the distribution of the assets of the Company to be made upon its liquidation, the Manager expressly waives any right which it, as a creditor of the Company, might otherwise have under the Act to receive distributions of assets pari passu with the other creditors of the Company in connection with a distribution of assets of the Company in satisfaction of any liability of the Company, and hereby subordinates to said creditors any such right. 12.3 Compliance With Certain Requirements of Regulations; Deficit Capital Accounts. In the event the Company is "liquidated" within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Section 12 to the Members who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(h)(2). If any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all Allocation Years, including the Allocation Year during which such liquidation occurs), such Member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever. In the discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be made to the Members pursuant to this Section 12 may be: (a) Distributed to a trust established for the benefit of the Members for the purposes of liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or unforeseen liabilities or obligations of the Company. The assets of any such trust shaft be distributed to the Members from time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Members pursuant to Section 12.2 hereof, or (b) Withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Company, provided that such withheld amounts shall be distributed to the Members as soon as practicable. 12.4 Deemed Distribution and Recontribution. Notwithstanding any other provision of this Section 12, in the event the Company is liquidated within the meaning of Regulations Section 1. 704- 1 (b)(2)(ii)(g) but no Dissolution Event has occurred, the Property shall not be liquidated, the Company's Debts and other liabilities shall not be paid or discharged, and the Company's affairs shall not be wound up. Instead, solely for federal income tax purposes, the Company shall be deemed to have distributed the Property in-kind to the Members, who shall be deemed to have taken subject to all Debts of the Company and other liabilities all in accordance with their respective Capital Accounts. Immediately thereafter, the Members shall be deemed to have recontributed the Property in-kind to the Company, which shall be deemed to have taken subject to all such liabilities. 12.5 Rights of Members. Except as otherwise provided in this Agreement, each Member shall look solely to the Property of the Company for the return of its Capital Contribution and has no right or power to demand or receive Property other than cash from the Company. If the assets of the Company remaining after payment or discharge of the debts or liabilities of the Company are insufficient to return such Capital Contribution, the Members shall have no recourse against the Company, the Manager or any other Member. 12.6 Notice of Dissolution/Termination. (a) In the event a Dissolution Event occurs or an event occurs that would, but for provisions of Section 12.1, result in a dissolution of the Company, the Manager shall, within thirty (30) days thereafter, provide written notice thereof to each of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Manager) and shall publish notice thereof in a newspaper of general circulation in each place in which the Company regularly conducts business (as determined in the discretion of the Manager). (b) Upon completion of the distribution of the Company's Property as provided in this Section 12, the Company shall be terminated, and the Liquidator shall cause the filing of the Certificate of Cancellation pursuant to Section 18-203 of the Act and shall take all such other actions as may be necessary to terminate the Company. 12.7 Allocations and Distributions During Period of Liquidation. During the period commencing on the first day of the Fiscal Year during which a Dissolution Event occurs and ending on the date on which all of the assets of the Company have been distributed to the Members pursuant to Section 12.2 hereof the Members shall continue to share Profits, Losses, gain, loss and other items of Company income, gain, loss or deduction in the manner provided in Section 3 hereof but no distributions pursuant to Section 4 hereof shall be made. 12.8 Character of Liquidating Distributions. All payments made in liquidation of the Interest of a Member in the Company shall be made in exchange for the Interest of such Member in Property pursuant to Section 736(b)(1) of the Code, including the interest of such Member in Company goodwill. 12.9 The Liquidator. (a) Definition. The "Liquidator" shall be the Manager, provided that, in the event of the Bankruptcy of the Manager or a material breach of a representation or warranty or obligation of the Manager, the BT Investor or its designee shall be the "Liquidator" and shall have the power of attorney granted to the Manager pursuant to Section 11 hereof. (b) Fees. The Company is authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this Section 12 and to reimburse the Liquidator for its reasonable costs and expenses incurred in performing those services. (c) Indemnification. The Company shall indemnify, save harmless, and pay all judgments and claims against the Liquidator or any officers, directors, agents or employees of the Liquidator relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Liquidator, or any officers, directors, agents or employees of the Liquidator in connection with the winding up of the Company, including reasonable attorneys' fees incurred by the Liquidator, officer, director, stockholder, agent or employee in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, except to the extent such liability or damage is caused by the fraud, intentional misconduct of, or a knowing violation of the laws by the Liquidator which was material to the cause of action. 12.1 Form of Liquidating Distributions. Unless otherwise unanimously agreed by the Members, the distribution to the Members under this Section 12 shall consist of an undivided interest in each item of Property other than cash and a proportionate share of the Company's cash (including cash resulting from the sale of Property or the repayment of Permitted Investments), such undivided interest and proportionate share in each case being equal to the ratio of the balance in each Member's Capital Account to the aggregate balances of the Capital Accounts of all of the Members.
SECTION 13 MISCELLANEOUS
13.1 Notices. Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered, given, and received for all purposes (i) as of the date so delivered, if delivered personally to the Person or to an officer of the Person to whom the same is directed, or (ii) when the same is actually received, if sent either by overnight courier, registered or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by overnight courier, charges prepaid and addressed as follows, or to such other address as such Person may from time to time specify by notice to the Members: (a) If to the Company, to the address set forth in Section 1.4 hereof, (b) If to the Manager, to the address set forth in Section 1.4 hereof, (c) If to a Member, to the address set forth in Section 2.1 hereof 13.2 Binding Effect. Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns. 13.3 Construction. Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Member. The terms of this Agreement are intended to embody the economic relationship among the Members and shall not be subject to modification by, or be conformed with, any actions by the Internal Revenue Service, except as this Agreement may be explicitly so amended and except as may relate specifically to the filing of tax returns. 13.4 Time. In computing any period of time pursuant to this Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included, but the time shall begin to run on the next succeeding day. The last day of the period so computed shall be included, unless it is not a Business Day, in which event the period shall run until the end of the next day which is a Business Day. 13.5 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof. 13.6 Severability. Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The preceding sentence of this Section 13.6 shall be, of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Member to lose the material benefit of its economic bargain. 13. 7 Incorporation by Reference. No exhibit, schedule, or other appendix attached to this Agreement and referred to herein, is incorporated in this Agreement by reference unless this Agreement expressly otherwise provides. 13.8 Variation of Terms. All terms and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require. 13.9 Governing Law. The laws of the State of Delaware shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties arising hereunder. 13.10 Waiver of Jury Trial. Each of the Members irrevocably waives, to the extent permitted by law, all rights to trial by jury and all rights to immunity by sovereignty or otherwise in any action, proceeding or counterclaim arising out of or relating to this Agreement. 13.11 Counterpart Execution. This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement. 13.12 Sole and Absolute Discretion. Except as otherwise provided in this Agreement (including Section 5 hereof), all actions which the Manager may take and all determinations which the Manager may make pursuant to this Agreement may be taken and made at the sole and absolute discretion of the Manager. 13.13 Specific Performance. Each Member agrees with the other Members that the other Members would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the nonbreaching Members may be entitled, at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof . 13.14 Holding Company Eligible Activities and Holding Company Eligible Assets/Banking Laws and Regulations. (a) It is the intention of the Members that the Company will engage only in Holding Company Eligible activities and will invest only in Holding Company Eligible assets. In furtherance therewith, the Members hereby acknowledge that the Company is subject to federal banking laws and regulations and to supervision and examination by the Board of Governors of the Federal Reserve System. (b) In the event that it becomes unlawful or otherwise prohibited for any of the Members to continue to be members of the Company or any of the Members become subject to federal banking laws and regulations which materially restrict such Member's ability to conduct its business in the ordinary course, to the extent possible, the Members agree to negotiate in good faith to amend this Agreement so as to comply with any legal and/or regulatory requirements and to minimize the adverse financial impact of such laws or regulations. 13.15 No Material Impairment. No Member shall take any action that could impair materially such Member's ability to perform its duties and obligations under this Agreement. IN WITNESS WHEREOF, the parties have executed and entered into this Operating Agreement of the Company as of the day first above set forth.
[signatures follow on separate pages]
				MEMBERS: PCI AIR MANAGEMENT CORPORATION By: /s/ Gary R. Cornell Title: VICE PRESIDENT
THIS IS A SIGNATURE, PAGE TO THE OPERATING AGREEMENT OF PCI AIR MANAGEMENT PARTNERS, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MEMBER.
				MEMBERS (CONTINUED): RAMP INVESTMENTS, L.L.C. By: PCI AIR MANAGEMENT CORPORATION Title: Manager By: /s/ Gary R. Cornell Title: VICE PRESIDENT
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF PCI AIR MANAGEMENT PARTNERS, L.L.C. AND IS EXECUTED BY TBE PARTY NAMED ABOVE IN ITS CAPACITY AS A MEMBER.
				MANAGER: PCI AIR MANAGEMENT CORPORATION By: /s/ Gary R. Cornell Title: VICE PRESIDENT
THIS IS A SIGNATURE PAGE TO TBE OPERATING AGREEMENT OF PCI AIR MANAGEMENT PARTNERS, L.L.C. AND IS EXECUTED BY TBE PARTY NAMED ABOVE IN ITS CAPACITY AS A MANAGER.

	FILED 9 A.M. DEC. 4, 1986
CERTIFICATE OF INCORPORATION OF PCI Energy Corporation 1. The name of the corporation is: PCI Energy Corporation 2. The address of its registered office in the State of Delaware is 1100 North Market Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is Financial Services (Delaware), Inc. 3. The nature of the business or purposes to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00). 5A. The name and mailing address of each incorporator is as follows:
NAME Edward A. Caine David R. Oliver, Jr. Donald K. James	MAILING ADDRESS 1020 19th Street, N.W. Suite 800 Washington, D.C. 20036 1020 19th Street, N.W. Suite 800 Washington, D.C. 20036 1020 19th Street, N.W. Suite 800 Washington, D.C. 20036
5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows
NAME H. Lowell Davis Edward A. Caine	MAILING ADDRESS 1900 Pennsylvania Avenue, N.W. Suite 803 Washington, D.C. 20068 1020 19th Street, N.W. Suite 800 Washington, D.C. 20036
6. The corporation is to have perpetual existence. 7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized: To make, alter or repeal the by-laws of the corporation. 8. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide. 9. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 3rd day of December, 1986.
	/s/ Edward A. Caine Edward A. Caine /s/ David R. Oliver, Jr. David R. Oliver, Jr. /s/ Donald K. James Donald K. James

CERTIFICATE OF CHANGE OF NAME OF REGISTERED AGENT AND CHANGE OF ADDRESS OF REGISTERED OFFICE PURSUANT TO SECTION 134(a) OF TITLE 8 OF THE DELAWARE CODE The undersigned agent for service for process, in order to change the name of the registered agent, and the address of the registered office of the corporations for which it is registered agent, hereby certifies that:
1.	The name of the registered agent currently on file is: Financial Services (Delaware) Inc.
2.	The new name of the registered agent is Delaware Corporate Management Inc.
3.	The address of the registered Office currently on file is: 1100 N. Market Street Suite 780 New Castle County Wilmington, Delaware 19801
4.	The address to which the registered office is to be changed is: 1105 N. Market Street Suite 1300 P.O. Box 8985 New Castle County Wilmington, Delaware 19899 The new address will be effective upon the filing hereof.
5.	The names of the corporations represented by said agent are set forth on the list annexed to this certificate and made a part her of by reference.
IN WITNESS WHEREOF, said agent was caused this certificate to be signed on its behalf by one of its Vice Presidents and attested to by one of its Assistant Secretaries this 2 ^nd day of May, 1991. FINANCIAL SERVICES (DELAWARE), INC. By: _____________________________ Vice President [Corporate Seal] Attest: ____________________________ Assistant Secretary STATE OF DELAWARE ) ) SS. COUNTY OF NEW CASTLE ) The foregoing instrument was acknowledged before me this 2 ^nd day of May, 1991, by _____________,Vice President of FINANCIAL SERVICES (DELAWARE), INC. a Delaware corporation, on behalf of the corporation. _______________________ Notary Public My commission expires July 14, 1991

CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED

OFFICE AND REGISTERED AGENT

PCI ENERGY CORPORATION

________________________________________

The Board of Directors of:

PCI ENERGY CORPORATION

a Corporation of the State of Delaware, on this 9th day of June, A.D. 1997, do hereby resolve and order that the location of the Registered Office of this Corporation within this State be, and the same hereby is:

1013 Centre Road, in the City of Wilmington, in the County of New Castle, Delaware, 19805.

The name of the Registered Agent therein and in charge thereof upon whom process against the Corporation may be served, is:

CORPORATION SERVICE COMPANY.

PCI ENERGY CORPORATION

a Corporation of the State of Delaware, does hereby certify that the foregoing is a true copy of a resolution adopted by the Board of Directors at a meeting held as herein stated.

IN WITNESS WHEREOF, said corporation has caused this Certificate to be signed by its Secretary this 9 ^th day of June A.D. 1997.

     STATE OF DELAWARE
    SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 06/20/1997
       971207103 - 2109740

/s/ WM. SHAPIRO
Authorized Officer
WILLIAM SHAPIRO

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

By-Laws

PCI Energy Corporation

(a Delaware corporation)

As adopted
December 13, 1986

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

PCI Energy Corporation

BY-LAWS

Article I

OFFICES

Section 1. The registered office of PCI Energy Corporation (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETINGS OF SHAREHOLDERS

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Section 3. Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation, or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

Section 1. The Board of Directors of the Corporation shall consist of two persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

Section 2. One member of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, or by these By- Laws, be the acts of the Board of Directors.

Section 3. (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, f the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 8. The Board of Directors may also, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more other committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee. A majority or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to a Company officer, director, or employee of the Company or of any wholly-owned subsidiary of the Company (Subsidiary), the Company shall indemnify, and with respect to any other individual the Company may indemnify, any person who was or is a party or is threatened to be made a party of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (including an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Company or of such Subsidiary, or is or was serving at the request of the Company or of such Subsidiary as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in the manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; except in relation to any claim, issue or matter, as to which he shall be finally adjudged in such action, suit or proceeding to be liable for gross negligence or willful misconduct in the performance of his duty to the Company or such Subsidiary. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or such Subsidiary, or a presumption that he was guilty of gross negligence or willful misconduct, or, with respect to any criminal action or proceeding, a presumption that he had reasonable cause to believe that his conduct was unlawful.

Any indemnification (unless ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the director, officer o, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth above. Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or even if obtainable a quorum of disinterested directors-so directs, by independent legal counsel in a written opinion, or (3) by the shareholders.

Expenses occurred in defending an action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, shall be paid by the Company in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in the preceding paragraph upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Company as authorized in this section. Such indemnification shall be in addition to, and not exclusive of, any other rights to which those indemnified may be entitled under any other by-law of the Company or such Subsidiary, agreement, vote of shareholders, or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee, or agent of the Company or of such Subsidiary and insure to the benefit of such person's heirs, executors, and administrators.

Article V

OFFICERS

Section 2. The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed-by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

BYE-LAWS

PCI Engine Trading Ltd.

I, E. John Thompson, Secretary of PCI Engine Trading Ltd., DO HEREBY CERTIFY, that the attached is a true and correct copy of Bye-Laws of the said Company, which were approved by the Provisional Directors and the Members on the 30th day of May, 1995.

/s/ E. J. THOMPSON
E. John Thompson
Secretary

Dated: This 1st day of June, 1995.

BYE-LAWS

PCI Engine Trading Ltd.

TABLE OF CONTENTS
Bye-Law		Page
1	Interpretation	1
2	Board of Directors	2
3	Management of the Company	3
4	Power to appoint managing director or chief executive officer	3
5	Power to appoint manager	3
6	Power to authorise specific actions	3
7	Power to appoint attorney	4
8	Power to delegate to a committee	4
9	Power to appoint and dismiss employees	4
10	Power to borrow and charge property	4
11	Exercise of power to purchase shares of or discontinue the Company	5
12	Election of Directors	5
13	Defects in appointment of Directors	5
14	Alternate Directors	5
15	Removal of Directors	6
16	Vacancies on the Board	7
17	Notice of meetings of the Board	7
18	Quorum at meetings of the Board	8
19	Meetings of the Board	8
20	Unanimous written resolutions	8
21	Contracts and disclosure of Directors' interests	8
22	Remuneration of Directors	9
23	Officers of the Company	9
24	Appointment of Officers	9
25	Remuneration of Officers	10
26	Duties of Officers	10
27	Chairman of meetings	10
28	Register of Directors and Officers	10
29	Obligations of Board to keep minutes	11
30	Indemnification of Directors and Officers of the Company	12
31	Waiver of claim by Member	12
32	Notice of annual general meeting	13
33	Notice of special general meeting	13
34	Accidental omission of notice of general meeting	13
35	Meeting called on requisition of members	14
36	Short notice	14
37	Postponement of meetings	14
38	Quorum for general meeting	14
39	Adjournment of meetings	15
40	Attendance at meetings	15
41	Written resolutions	15
42	Attendance of Directors	16
43	Voting at meetings	16
44	Voting on show of hands	17
45	Decision of chairman	17
46	Demand for a poll	17
47	Seniority of joint holders voting	19
48	Instrument of proxy	19
49	Representation of corporations at meetings	19
50	Rights of shares	20
51	Power to issue shares	20
52	Variation of rights, alteration of share capital and purchase of shares of the Company	21
53	Registered holder of shares	22
54	Death of a joint holder	23
55	Share certificates	23
56	Calls on shares	24
57	Forfeiture of Shares	24
58	Contents of Register of Members	25
59	Inspection of Register of Members	25
60	Determination of record dates	25
61	Instrument of transfer	26
62	Restriction on Transfer	26
63	Transfers by joint holders	26
64	Representative of deceased Member	27
65	Registration on death or bankruptcy	27
66	Declaration of dividends by Board	28
67	Other distributions	28
68	Reserve fund	28
69	Deduction of amounts due to the Company	28
70	Issue of bonus shares	28
71	Records of account	29
72	Financial year end	29
73	Financial statements	29
74	Appointment of Auditor	30
75	Remuneration of Auditor	30
76	Vacation of office of Auditor	30
77	Access to books of the Company	30
78	Report of the Auditor	30
79	Notices to Members of the Company	31
80	Notices to joint Members	31
81	Service and delivery of notice	31
82	The seal	32
83	Manner in which seal is to be affixed	32
84	Winding-up/distribution by liquidator	32
85	Alteration of Bye-laws	33

INTERPRETATION
1.		Interpretation
(1) In these Bye-laws the following words and expressions shall, where not inconsistent with the context, have the following meanings respectively:
			(a)		"Act" means the Companies Act 1981 as amended from time to time;
			(b)		"Alternate Director" means an alternate Director appointed in accordance with these Bye-laws;
			(c)		"Auditor" includes any individual or partnership;
			(d)		"Board" means the Board of Directors appointed or elected pursuant to these Bye-laws and acting by resolution in accordance with the Act and these Bye-laws or the Directors present at a meeting of Directors at which there is a quorum;
			(e)		"Company" means the company for which these Bye-laws are approved and confirmed;
			(f)		"Director" means a director of the Company and shall include an Alternate Director;
			(g)		"Member" means the person registered in the Register of Members as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Members as one of such joint holders or all of such persons as the context so requires;
			(h)		"notice" means written notice as further defined in these Bye-laws unless otherwise specifically stated;
			(i)		"Officer" means any person appointed by the Board to hold an office in the Company;
			(j)		"Register of Directors and Officers" means the Register of Directors and Officers referred to in these Bye-laws;
			(k)		"Register of Members" means the Register of- Members referred to in these Bye-laws; and
			(l)		"Secretary" means the person appointed to perform any or all the duties of secretary of the Company and includes any deputy or assistant secretary.
		(2)	In these Bye-laws, where not inconsistent with the context:
			(a)		words denoting the plural number include the singular number and vice versa;
			(b)		words denoting the masculine gender include the feminine gender;
			(c)		words importing persons include companies, associations or bodies of persons whether corporate or not;
			(d)		the word:
					(i)	"may" shall be construed as permissive;
					(ii)	"shall" shall be construed as imperative; and
			(e)		unless otherwise provided herein words or expressions defined in the Act shall bear the same meaning in these Bye-laws.
(3) Expressions referring to writing or written shall, unless the contrary intention appears, include facsimile, printing, lithography, photography and other modes of representing words in a visible form.
(4) Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof.
BOARD OF DIRECTORS
2	Board of Directors
	The business of the Company shall be managed and conducted by the Board.
3	Management of the Company
(1) In managing the business of the Company, the Board may exercise all such powers of the Company as are not, by statute or by these Bye-laws, required to be exercised by the Company in general meeting subject, nevertheless, to these Bye-laws, the- provisions of any statute and to such regulations as may be prescribed by the Company in general meeting.
(2) No regulation or alteration to these Bye-laws made by the Company in general meeting shall invalidate any prior act of the Board which would. have been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pays all expenses incurred in promoting and incorporating the Company.
4.	Power to appoint managing director or chief executive officer
The Board may from time to time appoint one or more Directors to the office of managing director or chief executive officer of the Company who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company.
5.	Power to appoint manager
The Board may appoint a person to act as manager of the Company's day to day business and may entrust to and confer upon such manager such -powers and duties as it deems appropriate for the transaction or conduct of such business.
6.	Power to authorise specific actions
The Board may from time to time and at any time authorise any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any agreement, document or instrument on behalf of the Company.
7.	Power to appoint attorney
The Board may from time to time and at any time by power of attorney appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions so vested in the attorney. Such attorney may, if so authorised under the seal of the Company, execute any deed or instrument under such attorney's personal seal with the same effect as the affixation of the seal of the Company.
8.	Power to delegate to a committee
The Board may delegate any of its powers to a committee appointed by the Board and every such committee shall conform to such directions as the Board shall impose on them.
9.	Power to appoint and dismiss employees
The Board may appoint, suspend or remove any manager, secretary, clerk, agent or employee of the Company and may fix their remuneration and determine their duties.
10.	Power to borrow and charge property
The Board may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party.
11.	Exercise of power to purchase shares of or discontinue the Company
(1) The Board may exercise all the powers of the Company to purchase all or any part of its own shares pursuant to Section 42A of the Act.
(2) The Board may exercise all the powers of the Company to discontinue the Company to a named country or jurisdiction outside Bermuda pursuant to Section 132G of the Act.
12.	Election of Directors
The Board shall consist of not less than two Directors or such number in excess thereof as the Members may from time to time determine who shall be elected or appointed in the first place at the statutory meeting of the Company and thereafter, except in the case of casual vacancy, at the annual general meeting or at any special general meeting called for the purpose and who shall hold office for such term as the Members may determine or, in the absence of such determination, until the next annual general meeting or until their successors are elected or appointed or their office is otherwise vacated, and any general meeting may authorise the Board to fill any vacancy in their number left unfilled at a general meeting.
13.	Defects in appointment of Directors
All acts done bona fide by any meeting of the Board or by a committee of the Board or by any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director.
14.	Alternate Directors
(1) Any general meeting of the Company may elect a person or persons to act as a Director in the alternative to any one or more of the Directors of the Company or may authorise the Board to appoint such Alternate Directors. Unless the Members otherwise resolve, any Director may appoint a person or persons to act as a Director in the alternative to himself or herself by notice in writing deposited with the Secretary. Any person so appointed shall have all the rights and powers of the Director or Directors for whom such person is appointed in the alternative provided that such person shall not be counted more than once in determining whether or not a quorum is present.
(2) An Alternate Director shall be entitled to receive notice of all meetings of the Board and to attend and vote at any such meeting at which a Director for whom such Alternate Director was appointed in the alternative is not personally present and generally to perform at such meeting all the functions of such Director for whom such Alternate Director was appointed.
(3) An Alternate Director shall cease to be such if the Director for whom such Alternate Director was appointed ceases for any reason to be a Director but may be re-appointed by the Board as alternate to the person appointed to fill the vacancy in accordance with these Bye-laws.
15.	Removal of Directors
(1) Subject to any provision to the contrary in these Bye-laws, the Members may, at any special general meeting convened and held in accordance with these Bye-laws, remove a Director provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director not less than 14 days before the meeting and at such meeting such Director shall be entitled to be heard on the motion for such Director's removal.
(2) A vacancy on the Board created by the removal of a Director under the provisions of subparagraph (1) of this Bye-law may be filled by the Members at the meeting at which such Director is removed and, in the absence of such election or appointment, the Board may fill the vacancy.
16.	Vacancies on the Boards
(1) The Board shall have the power from time to time and at any time to appoint any person as a Director to fill a vacancy on the Board occurring as the result of the death, disability, disqualification or resignation of any Director and to appoint an Alternate Director to any Director so appointed.
(2) The Board may act notwithstanding any vacancy in its number but, if and so long as its number is reduced below the number fixed by these Bye-laws as the quorum necessary for the transaction of business at meetings of the Board, the continuing Directors or Director may act for the purpose of (i) summoning a general meeting of the Company or (ii) preserving the assets of the Company.
(3) The office of Director shall be vacated if the Director:
				(a)	is removed from office pursuant to these Bye-laws or is prohibited from being a Director by law;
				(b)	is or becomes bankrupt or makes any arrangement or composition with his creditors generally;
				(c)	is or becomes of unsound mind or dies;
				(d)	resigns his or her office by notice in writing to the Company.
17.	Notice of meetings of the Board
(1) A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Board.
(2) Notice of a meeting of the Board shall be deemed to be duly given to a Director if it is given to such Director verbally in person or by telephone or otherwise communicated or sent to such Director by post, cable, telex, telecopier, facsimile or other mode of representing words in a legible and non-transitory form at such Director's last known address or any other address given by such Director to the Company for this purpose.
18.	Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of the Board shall be two Directors.
19.	Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.
(3) A resolution put to the vote at a meeting of the Board shall be carried by the affirmative votes of a majority of the votes cast and in the case of an equality of votes the resolution shall fail.
20.	Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in counterparts, shall be as valid as if it had been passed at a meeting of the Board duly called and constituted, such resolution to be effective on the date on which the last Director signs the resolution. For the purposes of this Bye-law only, "Director" shall not include an Alternate Director.
21.	Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with whom any Director is associated, may act in a professional capacity for the Company and such Director or such Director's firm, partner or such company shall be entitled to remuneration for professional services as if such Director were not a Director, provided that nothing herein contained shall authorise a Director or Director's firm, partner or such company to act as Auditor of the Company.
(2) A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company shall declare the nature of such interest as required by the Act.
(3) Following a declaration being made pursuant to this Bye-law, and unless disqualified by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum at such meeting.
22.	Remuneration of Directors
The remuneration, (if any) of the Directors shall be determined by the Company in general meeting and shall be deemed to accrue from day to day. The Directors may also be paid all travel, hotel and other expenses properly incurred by them in attending and returning from meetings of the Board, any committee appointed by the Board, general meetings of the Company, or in connection with the business of the Company or their duties as Directors generally.
OFFICERS
23.	Officers of the Company
The Officers of the Company shall consist of a President and a Vice President or a Chairman and a deputy Chairman, a Secretary and such additional Officers as the Board may from time to time determine all of whom shall be deemed to be Officers for the purposes of these Bye-laws.
24.	Appointment of Officers
(1) The Board shall, as soon as possible after the statutory meeting of Members and after each annual general meeting, appoint a President and Vice President or a Chairman and Deputy Chairman who shall be Directors.
(2) The Secretary and additional Officers, if any, shall be appointed by the Board from time to time.
25.	Remuneration of Officers
The Officers shall receive such remuneration as the Board may from time to time determine.
26.	Duties of Officers
The Officers shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them by the Board from time to time.
27.	Chairman of meetings
Unless otherwise agreed by a majority of those attending and entitled to attend and vote thereat, the Chairman, if there be one, and if not the President shall act as chairman at all meetings of the Members and of the Board at which such person is present. In their absence the Deputy Chairman or Vice President, if present, shall act as chairman and in the absence of all of them a chairman shall be appointed or elected by those present at the meeting and entitled to vote.
28.	Register of Directors and Officers
(1) The Board shall cause to be kept in one or more books at its registered office a Register of Directors and Officers and shall enter therein the following particulars with respect to each Director and the President, each Vice-President, the Chairman, and each Deputy Chairman, provided that each such person is a Director and the Secretary, that is to say:
				(a)	first name and surname; and
				(b)	address.
(2) The Board shall, within the period of fourteen days from the occurrence of
				(a)	any change among its Directors, the President, any Vice-President, the Chairman, and any Deputy Chairman, provided that each such person is a Director, and in the Secretary; or
				(b)	any change in the particulars contained in the Register of Directors and Officers,
cause to be entered on the Register of Directors and Officers the particulars of such change and the date on which such change occurred.
(3) The Register of Directors and Officers shall be open to inspection at the office of the Company on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each business day be allowed for inspection.
MINUTES
29.	Obligations of Board to keep minutes
The Board shall cause minutes to be duly entered in books provided for the purpose:
	(a)			of all elections and appointments of Officers;
	(b)			of the names of the Directors present at each meeting of the Board and of any committee appointed by the Board; and
	(c)			of all resolutions and proceedings of general meetings of the Members, meetings of the Board, meetings of managers and meetings of committees appointed by the Board.
INDEMNITY
30.	Indemnification of Directors and Officers of the Company
The Directors, Secretary and other Officers for the time being of the Company and the liquidator or trustees (if any) for the time being acting in relation to any of the affairs of the Company and every one of them, and their heirs, executors and administrators, shall be indemnified and secured harmless out of the assets of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and none of them shall be answerable for the acts, receipts, neglects or defaults of the others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto, PROVIDED THAT this indemnity shall not extend to any matter in respect of any fraud or dishonesty which may attach to any of said persons. To the full extent permitted by law, the indemnification provided herein shall include expenses (including attorneys' fees), judgment, fines and amounts paid in settlement. In the manner provided by law, any such expenses shall be paid by the Company in advance of the final disposition of such action, suit or proceeding and the repayment of such advancements will be required only if it shall ultimately be determined that the director, officer, employee or agent who received such advance is not entitled to indemnification.
31.	Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member might have, whether individually or by or in the right of the Company, against any Director or Officer on account of any action taken by such Director or Officer, or the failure of such Director or Officer to take any action in the performance of his duties with or for the Company, PROVIDED THAT such waiver shall not extend to any matter in respect of any fraud or dishonesty which may attach to such Director or Officer.
MEETINGS
32.	Notice of annual general meeting
The annual general meeting of the Company shall be held in each year other than the year of incorporation at such time and place as the President or the Chairman or any two Directors or any Director and the Secretary or the Board shall appoint. At least five days notice of such meeting shall be given to each Member stating the date, place and time at which the meeting is to be held, that the election of Directors will take place thereat, and as far as practicable, the other business to be conducted at the meeting.
33.	Notice of special general meeting
The President or the Chairman or any two Directors or any Director and the Secretary or the Board may convene a special general meeting of the Company whenever in their judgment such a meeting is necessary, upon not less than five days' notice which shall state the date, time, place and the general nature of the business to be considered at the meeting.
34.	Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.
35.	Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition of Members holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up share capital of the Company as at the date of the deposit carries the right to vote at general meetings of the Company, forthwith proceed to convene a special general meeting of the Company and the provisions of section 74 of the Act shall apply.
36.	Short notice
A general meeting of the Company shall, notwithstanding that it is called by shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by (i) all the Members entitled to attend and vote thereat in the case of an annual general meeting; and (ii) by a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to attend and vote thereat in the case of a special general meeting.
37.	Postponement of meetings
The Board may postpone any general meeting called in accordance with the provisions of these Bye-laws (other than a meeting requisitioned under these Bye-laws) provided that notice of postponement is given to each Member before the time for such meeting. Fresh notice of the date, time and place for the postponed meeting shall be given to each Member in accordance with the provisions of these Bye-laws.
38.	Quorum for general meeting
At any general meeting of the Company two persons present in person and representing in person or by proxy in excess of 50% of the total issued voting shares in the Company throughout the meeting shall form a quorum for the transaction of business, PROVIDED that if the Company shall at any time have only one Member, one Member present in person or by proxy shall form a quorum for the transaction of business at any general meeting of the Company held during such time. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall stand adjourned to the same day one week later, at the same time and place or to such other day, time or place as the Board may determine.
39.	Adjournment of meetings
The chairman of a general meeting may, with the consent of the Members at any general meeting at which a quorum is present (and shall if so directed), adjourn the meeting. Unless the meeting is adjourned to a specific date and time, fresh notice of the date, time and place for the resumption of the adjourned meeting shall be given to each Member in accordance with the provisions of these Bye-laws.
40.	Attendance at meetings
Members may participate in any general meeting by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.
41.	Written resolutions
(1) Subject to subparagraph (6), anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of the Members of the Company, may, without a meeting and without any previous notice being required, be done by resolution in writing signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Act, on behalf of, all the Members who at the date of the resolution would be entitled to attend the meeting and vote on the resolution.
(2) A resolution in writing may be signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Act, on behalf of, all the Members, or any class thereof, in as many counterparts as may be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is the date when the resolution is signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Act, on behalf of, the last Member to sign and any reference in any Bye-law to the date of passing of a resolution is, in relation to a resolution made in accordance with this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is as valid as if it had been passed by the Company in general meeting or by a meeting-of the relevant class of Members, as the case may be, and any reference in any Bye-law to a meeting at which a resolution is passed or to Members voting in favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law shall constitute minutes for the purposes of sections 81 and 82 of the Act.
(6) This Bye-law shall not apply to:
				(a)	a resolution passed pursuant to section 89(5) of the Act; or
				(b)	a resolution passed for the purpose of removing a Director before the expiration of his term of office under these Bye-laws.
42.	Attendance of Directors
The Directors of the Company shall be entitled to receive notice of and to attend and be heard at any general meeting.
43.	Voting at meetings
(1) Subject to the provisions of the Act and these Bye-laws, any question proposed for the consideration of the Members at any general meeting shall be decided by the affirmative votes of a majority of the votes cast in accordance with the provisions of these Bye-laws and in the case of an equality of votes the resolution shall fail.
(2) No Member shall be entitled to vote at any general meeting unless such Member has paid all the calls on all shares held by such Member.
44.	Voting on show of hands
At any general meeting a resolution put to the vote of the meeting shall, in the first instance, be voted upon by a show of hands and, subject to any rights or restrictions for the time being lawfully attached to any class of shares and subject to the provisions of these Bye-laws, every Member present in person and every person holding a valid proxy at such meeting shall be entitled to one vote and shall cast such vote by raising his or her hand.
45.	Decision of chairman
At any general meeting a declaration by the chairman of the meeting that a question proposed for consideration has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in a book containing the minutes of the proceedings of the Company shall, subject to the provisions of these Bye-laws, be conclusive evidence of that fact.
46.	Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two Bye-laws, at any general meeting of the Company, in respect of any question proposed for the consideration of the Members (whether before or on the declaration of the result of a show of hands as provided for in these Bye-laws), a poll may be demanded by any of the following persons:
				(a)	the chairman of such meeting; or
				(b)	at least three Members present in person or represented by proxy; or
				(c)	any Member or Members present in person or represented by proxy and holding between them not less than one-tenth of the total voting rights of all the Members having the right to vote at such meeting; or
				(d)	any Member or Members present in person or represented by proxy holding shares in the Company conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all such shares conferring such right.
(2) Where, in accordance with the provisions of subparagraph (1) of this Bye-law, a poll is demanded, subject to any rights or restrictions for the- time being lawfully attached to any class of shares, every person present at such meeting shall have one vote for each share of which such person is the holder or for which such person holds a proxy and such vote shall be counted in the manner set out in sub-paragraph (4) of this Bye-Law or in the case of a general meeting at which one or more Members are present by telephone in such manner as the chairman of the meeting may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded and shall replace any previous resolution upon the same matter which has been the subject of a show of hands.
(3) A poll demanded in accordance with the provisions of subparagraph (1) of this Bye-law, for the purpose of electing a chairman or on a question of adjournment, shall be taken forthwith and a poll demanded on any other question shall be taken in such manner and at such time and place as the chairman may direct and any business other than that upon which a poll has been demanded may be proceeded with pending the taking of the poll.
(4) Where a vote is taken by poll, each person present and entitled to vote shall be furnished with a ballot paper on which such person shall record his or her vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialled or otherwise marked so as to identify the voter and the registered holder in the case of a proxy. At the conclusion of the poll, the ballot papers shall be examined and counted by a committee of not less than two Members or proxy holders appointed by the chairman for the purpose and the result of the poll shall be declared by the chairman.
47.	Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.
48.	Instrument of proxy
The instrument appointing a proxy shall be in writing in the form, or as near thereto as circumstances admit, of Form "A" in the Schedule hereto, under the hand of the appointor or of the appointor's attorney duly authorised in writing, or if the appointor is a corporation, either under its seal, or under the hand of a duly authorised officer or attorney. The decision of the chairman of any general meeting as to the validity of any instrument of proxy shall be final.
49.	Representation of corporations at meetings
A corporation which is a Member may, by written instrument, authorise such person as it thinks fit to act as its representative at any meeting of the Members and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an individual Member. Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he or she thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation which is a Member.
SHARE CAPITAL AND SHARES
50.	Rights of shares
Subject to any resolution of the Members to the contrary and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the share capital of the Company shall be divided into shares of a single class the holders of which shall, subject to the provisions of these Bye-laws:
	(a)			be entitled to one vote per share;
	(b)			be entitled to such dividends as the Board may from time to time declare;
	(c)			in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company; and
	(d)			generally be entitled to enjoy all of the rights attaching to shares.
51.	Power to issue shares
(1) Subject to these Bye-laws and to any resolution of the Members to the contrary and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have power to issue any unissued shares of the Company on such terms and conditions as it may determine and any shares or class of shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the Company may from time to time by resolution of the Members prescribe.
(2) The Board shall, in connection with the issue of any share, have the power to pay such commission and brokerage as may be permitted by law.
(3) The Company shall not give, whether directly or indirectly, whether by means of loan, guarantee, provision of security or otherwise, any financial assistance for the purpose of a purchase or subscription made or to be made by any person of or for any shares in the Company, but nothing in this Bye-Law shall prohibit transactions mentioned in Sections 39A, 39B and 39C of the Act.
(4) The Company may from time to time do any one or more of the following things:
				(a)	make arrangements on the issue of shares for a difference between the Members in the amounts and times of payments of calls on their shares;
				(b)	accept from any Member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up;
				(c)	pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others; and
				(d)	issue its shares in fractional denominations and deal with such fractions to the same extent as its whole shares and shares in fractional denominations shall have in proportion to the respective fractions represented thereby all of the rights of whole shares including (but without limiting the generality of the foregoing) the right to vote, to receive dividends and distributions and to participate in a winding up.
52.	Variation of rights, alteration of share capital and purchase of shares of the Company
(1) Subject to the provisions of Sections 42 and 43 of the Act any preference shares may be issued or converted into shares that, at a determinable date or at the option of the Company, are liable to be redeemed on such terms and in such manner as the Company before the issue or conversion may by resolution of the Members determine.
(2) If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up, be varied with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate general meeting of the holders of the shares of the class in accordance with Section 47 (7) of the Act. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.
(3) The Company may from time to time by resolution of the Members change the currency denomination of, increase, alter or reduce its share capital in accordance with the provisions of Sections 45 and 46 of the Act. Where, on any alteration of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit including, without limiting the generality of the foregoing, the issue to Members, as appropriate, of fractions, of shares and/or arranging for the sale or transfer of the fractions of shares of Members.
(4) The Company may from time to time purchase its own shares in accordance with the provisions of Section 42A of the Act.
53.	Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not be bound to recognise any equitable or other claim to, or interest in, such share on the part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the Member at such Member's address in the Register of Members or, in the case of joint holders, to such address of the holder first named in the Register of Members, or to such person and to such address as the holder or joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.
54.	Death of a joint holder
Where two or more persons are registered as joint holders of a share or shares then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to the said share or shares and the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.
55.	Share certificates
(1) Every Member shall be entitled to a certificate under the seal of the Company (or a facsimile thereof) specifying the number and, where appropriate, the class of shares held by such Member and whether the same are fully paid up and, if not, how much has been paid thereon. The Board may by resolution determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical means.
(2) The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom such shares have been allotted.
(3) If any such certificate shall be proved to the satisfaction of the Board to have been worn out, lost, mislaid or destroyed the Board may cause a new certificate to be issued and request an indemnity for the lost certificate if it sees fit.
56.	Calls on shares
(1) The Board may from time to time make such calls as it thinks fit upon the Members in respect of any monies unpaid on the shares allotted to or held by such Members and, if a call is not paid on or before the day appointed for payment thereof, the Member may at the discretion of the Board. be liable to pay the Company interest on the amount of such call at such rate as the Board may determine, from the date when such call was payable up to the actual date of payment. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.
(2) The Board may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times of payment of such calls.
57.	Forfeiture of shares
(1) If any Member fails to pay, on the day appointed for payment thereof, any call in respect of any share allotted to or held by such Member, the Board may, at any time thereafter during such time as the call remains unpaid, direct the Secretary to forward to such Member a notice in the form, or as near thereto as circumstances admit, of Form "B" in the Schedule hereto.
(2) If the requirements of such notice are not complied with, any such share may at any time thereafter before the payment of such call and the interest due in respect thereof be forfeited by a resolution of the Board to that effect, and such share shall thereupon. become the property of the Company and may be disposed of as the Board shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid shall, notwithstanding such forfeiture, be liable to pay to the Company all calls owing on such share or shares at the time of the forfeiture and all interest due thereon.
REGISTER OF MEMBERS
58.	Contents of Register of Members
The Board shall cause to be kept in one or more books a Register of Members and shall enter therein the following particulars:
	(a)			the name and address of each Member, the number and, where appropriate, in the class of shares held by such Member and the amount paid or agreed to be considered as paid on such shares;
	(b)			the date on which each person was entered in the Register of Members; and
	(c)			the date on which any person ceased to be a Member for one year after such person so ceased.
59.	Inspection of Register of Members
The Register of Members shall be open to inspection at the registered office of the Company on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each business day be allowed for inspection. The Register of Members may, after notice has been given by advertisement in an appointed newspaper to that effect, be closed for any time or times not exceeding in the whole thirty days in each year.
60.	Determination of record dates
Notwithstanding any other provision of these Bye-laws, the Board may fix any date as the record date for
	(a)			determining the Members entitled to receive any dividend; and
	(b)			determining the Members entitled to receive notice of and to vote at any general meeting of the Company.
TRANSFER OF SHARES
61.	Instrument of transfer
(1) An instrument of transfer shall be in the form or as near thereto as circumstances admit of Form "C" in the Schedule hereto or in such other common form as the Board may accept. Such instrument of transfer shall be signed by or on behalf of the transferor and transferee provided that, in the case of a fully paid share, the Board may accept the instrument signed by or on behalf of the transferor alone. The transferor shall be deemed to remain the holder of such share until the same has been transferred to the transferee in the Register of Members.
(2) The Board may refuse to recognise any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer.
62.	Restriction on transfer
(1) The Board may in its absolute discretion and without assigning any reason therefor refuse to register the transfer of a share. The Board shall refuse to register a transfer unless all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda have been obtained.
(2) If the Board refuses to register a transfer of any share the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal.
63.	Transfers by joint holders
The joint holders of any share or shares may transfer such share or shares to one or more of such joint holders, and the surviving holder or holders of any share or shares previously held by them jointly with a deceased Member may transfer any such share to the executors or administrators of such deceased Member.
TRANSMISSION OF SHARES
64.	Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where the deceased Member was a joint holder, and the legal personal representatives of the deceased Member where the deceased Member was a sole holder, shall be the only persons recognised by the Company as having any title to the deceased Member's interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder frorn any liability in respect of any share which had been jointly held by such deceased Member with other persons. Subject to the provisions of Section 52 of the Act, for the purpose of this Bye-law, legal personal representative means the executor or administrator of a deceased Member or such other person as the Board may in its absolute discretion decide as being properly authorised to deal with the shares of a deceased Member.
65.	Registration on death or bankruptcy
Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Board may deem sufficient or may elect to nominate some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in the form, or as near thereto as circumstances admit, of Form T" in the Schedule hereto. On the presentation thereof to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Member but the Board shall, in either case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by that Member before such Member's death or bankruptcy, as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
66.	Declaration of dividends by the Board
The Board may, subject to these Bye-laws and in accordance with Section 54 of the Act, declare a dividend to be paid to the Members, in proportion to the number of shares held by them, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets.
67.	Other distributions
The Board may declare and make such other distributions (in cash or in specie) to the Members as may be lawfully made out of the assets of the Company.
68.	Reserve fund
The Board may from time to time before declaring a dividend set aside, out of the surplus or profits of the Company, such sum as it thinks proper as a reserve fund to be used to meet contingencies or for equalising dividends or for any other special purpose.
69.	Deduction of Amounts due to the Company
The Board may deduct from the dividends or distributions payable to any Member all monies due from such Member to the Company on account of calls or otherwise.
CAPITALISATION
70.	Issue of bonus shares
(1) The Board may resolve to capitalise any part of the amount for the time being standing to the credit of any of the Company's share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Members.
(2) The Company may capitalise any sum standing to the credit of a reserve account or sums otherwise available for dividend or distribution by applying such amounts in paying up in full partly paid shares of those Members who would have been entitled to such sums if they were distributed by way of dividend or distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
71.	Records of account
The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to
				(a)	all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates;
				(b)	all sales and purchases of goods by the Company; and
				(c)	the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the Company or, subject to Section 83 (2) of the Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours.
72.	Financial year end
The financial year end of the Company may be determined by resolution of the Board and failing such resolution shall be 31st December in each year.
73.	Financial statements
Subject to any rights to waive laying of accounts pursuant to Section 88 of the Act, financial statements as required by the Act shall be laid before the Members in general meeting.
AUDIT
74.	Appointment of Auditor
Subject to Section 88 of the Act, at the annual general meeting or at a subsequent special general meeting in each year, an independent representative of the Members shall be appointed by them as Auditor of the accounts of the Company. Such Auditor may be a Member but no Director, Officer or employee of the Company shall, during his or her continuance in office, be eligible to act as an Auditor of the Company.
75.	Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Company in general meeting or in such manner as the Members may determine.
76.	Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death of the Auditor, or by the Auditor becoming incapable of acting by reason of illness or other disability at a time when the Auditors services are required, the Board shall, as soon as practicable, convene a special general meeting to fill the vacancy thereby created.
77.	Access to books of the Company
The Auditor shall at all reasonable times have access to all books kept by the Company and to all accounts and vouchers relating thereto, and the Auditor may call on the Directors or Officers of the Company for any information in their possession relating to the books or affairs of the Company.
78.	Report of the Auditor
(1) Subject to any rights to waive laying of accounts or appointment of an Auditor pursuant to Section 88 of the Act, the accounts of the Company shall be audited at least once in every year.
(2) The financial statements provided for by these Bye-laws shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the Auditor shall be submitted to the Members in general meeting.
(3) The generally accepted auditing standards referred to in subparagraph (2) of this Bye-law may be those of a country or jurisdiction other than Bermuda. If so, the financial statements and the report of the Auditor must disclose this fact and name such country or jurisdiction.
NOTICES
79.	Notices to Members of the Company
A notice may be given by the Company to any Member either by delivering it to such Member in person or by sending it to such Member's address in the Register of Members or to such other address given for the purpose. For the purposes of this Bye-law, a notice may be sent by mail, courier service, cable, telex, telecopier, facsimile or other mode of representing words in a legible and non-transitory form.
80.	Notices to joint Members
Any notice required to be given to a Member shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Members and notice so given shall be sufficient notice to all the holders of such shares.
81.	Service and delivery of notice
Any notice shall be deemed to have been served at the time when the same would be delivered in the ordinary course of transmission and, in proving such service, it shall be sufficient to prove that the notice was properly addressed and prepaid, if posted, and the time when it was posted, delivered to the courier or to the cable company or transmitted by telex, facsimile or other method as the case may be.
SEAL OF THE COMPANY
82.	The seal
The seal of the Company shall be in such form as the Board may from time to time determine. The Board may adopt one or more duplicate seals for use outside Bermuda.
83.	Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument except attested by the signature of a Director and the Secretary or any two Directors, or some other person appointed by the Board for the purpose, provided that any Director, or Officer, may affix the seal of the Company attested by such Director or Officer's, signature only to any authenticated copies of these Bye-laws, the incorporating documents of the Company, the minutes of any meetings or any other documents required to be authenticated by such Director or Officer.
WINDING-UP
84.	Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the sanction of a resolution of the Members, divide amongst the Members in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he or she deems fair upon any property to be divided as aforesaid and may determine how such division shall be. carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator shall think fit, but so that no Member shall be compelled to accept any shares or other securities or assets whereon there is any liability.
ALTERATION OF BYE-LAWS
85.	Alteration of Bye-laws
No Bye-law shall be rescinded, altered or amended and no new Bye-law shall be made until the same has been approved by a resolution of the Board and by a resolution of the Members.

SCHEDULE - FORM A (Bye-law 48)

PROXY

I of the holder of share in the above-named Company hereby appoint ________________. or failing him/her ______________. or failing him/her _______________ as my proxy to vote on my behalf at the General Meeting of the Company to be held on the day of , 19 and at any adjournment thereof.

Dated this day of , 19___

*GIVEN under the seal of the company

*Signed by the above-named

Witness

*Delete as applicable.

SCHEDULE - FORM B (Bye-law 57)

NOTICE OF LIABILITY TO FORFEITURE FOR NON PAYMENT OF CALL

You have failed to pay the call of (amount of call] made on the day of 19 last, in respect of the (number] share(s) [numbers in figures] standing in your name in the Register of Members of the Company, on the day of , 19 last, the day appointed for payment of such call. You are hereby notified that unless you pay such call together with interest thereon at the rate of per annum computed from the said day of , 19 last, on or before the day of , 19 next at the place of business of the said Company the share(s) will be liable to be forfeited.

Dated this day of 19

[Signature of Secretary]

By order of the Board

SCHEDULE - FORM C (Bye-law 61)

TRANSFER OF A SHARE OR SHARES

FOR VALUE RECEIVED                                                                                             [amount]                                                                            [transferor] hereby sell assign and transfer unto
                                                                                                                                   [transferee] of
                                                                                                                                     [address]
                                                                                                                        [number of shares]
                                                                                                                                       shares of
                                                                                                                              [name of company]

Dated

In the presence of:

(Witness)

(Transferor)

In the presence of:

(Witness)

(Transferor)

SCHEDULE - FORM D (Bye-law 65)

TRANSFER BY A PERSON BECOMING ENTITLED ON DEATHIBANKRUPTCY OF A MEMBER

I/We having become entitled in consequence of the [death/bankruptcy] of [name of the deceased Member] to [number] share(s) numbered [number in figures] standing in the register of members of [Company] in the name of the said [name of deceased Member] instead of being registered myself/ourselves elect to have [name of transferee] (the "Transferee") registered as a transferee of such share(s) and I/we do hereby accordingly transfer the said share(s) to the Transferee to hold the same unto the Transferee his or her executors administrators and assigns subject to the conditions on which the same were held at the time of the execution thereof; and the Transferee does hereby agree to take the said share(s) subject to the same conditions.

WITNESS our hands this day of 19 .

Signed by the above-named )

[person or persons entitled] )

in the presence of: )

Signed by the above-named )

[transferee] )

in the presence of: )

FORM NO. 6	Registration No. EC20808
CERTIFICATE OF INCORPORATION
I hereby in accordance with the provisions of section 14 of the Companies Act, 1981, issue this Certificate of Incorporation and do certify that on the 29th day of May 19 95
PCI Engine Trading Ltd.
was registered by me in the Register maintained by me under the provisions of the said section and that the status of the said company is that of an exempted company.
Given under my hand this 29 ^th day of May 19 95
	/s/ for Registrar of Companies

FORM NO. 2
BERMUDA THE COMPANIES ACT 1981 MEMORANDUM OF ASSOCIATION OF COMPANY LIMITED BY SHARES (Section 7(1) and (2))
MEMORANDUM OF ASSOCIATION OF PCI Engine Trading Ltd. (hereinafter referred to as "the Company")
1.	The liability of the members of the Company is limited to the amount (if any) for the time being unpaid on the shares respectively held by them.
2.	We, the undersigned, namely,
NAME			ADDRESS	BERMUDIAN STATUS(Yes/No)		NATIONALITY	NUMBER OF SHARES SUBSCRIBED
C.F.A. Cooper			Clarendon House Church Street Hamilton Bermuda	Yes		British	One
D.H. Malcolm			"	No		British	One
J.C.R. Collis			"	Yes		British	One
do hereby respectively agree to take such number of shares of the Company as may be allotted to us respectively by the provisional directors of the Company, not exceeding the number of shares for which we have respectively subscribed, and to satisfy such calls as may be made by the directors, provisional directors or promoters of the Company in respect of the shares allotted to us respectively.
3.	The Company is to be an exempted Company as defined by the Companies Act 1981.
4.	The Company has power to hold land situated in Bermuda not exceeding in all, including the following parcels
	N/A
5.	The authorised share capital of the Company is US$12,000 divided into shares of US$1.00 each. The minimum subscribed share capital of the Company is US$12,000.
6.	The objects for which the Company is formed and incorporated are
	Please see attached
7.	Powers of the Company
	1.	The Company shall, pursuant to Section 42 of the Companies Act 1981,have the power to issue preference shares which are, at the option of the holder, liable to be redeemed.
Signed by each subscriber in the presence of at least one witness attesting the signature thereof
/s/ C. COOPER /s/ D. H. MALCOLM /s/ J. COLLIS (subscribers)					/s/ JOELINA REDDEN /s/ JOELINA REDDEN /s/ JOELINA REDDEN (Witnesses)
SUBSCRIBED this 22nd day of May, 1995.

THE COMPANIES ACT 1981 MEMORANDUM OF ASSOCIATION OF COMPANY LIMITED BY SHARES (Section 7(1) and (2))
-----------------------------------------------------------------------------------------------------------------
PCI Engine Trading Ltd.
Schedule to Form 2 Objects/Powers of the Company
6)	Objects of the Company
(i)	to finance or assist in financing the sale or letting on hire of any aircraft or any plants, machinery, equipment, goods or articles related thereto by way of leasing or hiring agreements, hire purchase or deferred payment, or similar transaction and to institute, enter into, carry on, subsidise, finance or assist in financing the sale, letting on hire and/or upkeep and maintenance of aircraft or any plant, machinery, equipment, goods or articles associated therewith upon any terms whatsoever, and to acquire leases, hiring, hire purchase or other agreements or any rights thereunder (whether proprietary or contractual);
(ii)	as set out in paragraphs (b) to (n) and (p) to (u) inclusive of the Second Schedule to the Companies Act 1981.

FORM NO. 1a

BERMUDA THE COMPANIES ACT 1981 CONSENT Pursuant to section 6 (1)

In exercise of the powers conferred upon him by section 6 (1) of the Companies Act 1981, the Minister of Finance hereby gives his consent to

PCI Engine Trading Ltd.

to be registered as an exempted Company under the Companies Act 1981, subject to the provisions of the said Act.

Dated this 26 ^th day of May 1995
	/s/ JOHN S. PEAMAN Minister of Finance
RC2	E.L.

THE COMPANIES ACT 1981 FIRST SCHEDULE
A company limited by shares may exercise all or any of the following powers subject to any provision of the law or its memorandum:
1.	[Deleted]
2.	to acquire or undertake the whole or any part of the business, property and liabilities of any person carrying on any business that he company is authorised to carry on;
3.	to apply for register, purchase, lease, acquire, hold, use, control, licence, sell, assign or dispose of patents, patent rights, copyrights, trade makers, formulae, licences, inventions, processes, distinctive makers and similar rights;
4.	to enter into partnership or into any arrangement for sharing of profits, union of interests, co-operation, joint venture, reciprocal concession or otherwise with any person carrying on or engaged in or about to carry on or engage in any business or transaction that the company is authorised to carry on or engage in or any business or transaction capable of being conducted so as to benefit the company;
5.	to take or otherwise acquire and hold securities in any other body corporate having objects altogether or in part similar to those of the company or carrying on any business capable of being conducted so as to benefit the company
6.	subject to section 96 to lend money to any employee or to any person having dealings with the company or with whom the company proposes to have dealings or to any other body corporate any of those shares are held by the company;
7.	to apply for, secure or acquire by grant, legislative enactment, assignment, transfer, purchase or otherwise and to exercise, carry out and enjoy any charter, licence, power, authority, franchise, concession, right or privilege, that any government or authority or any body corporation or other public body may be empowered to grant, and to pay for, aid in and contribute toward carrying it into effect and to assume any liabilities or obligations incidental thereto;
8.	to establish and support or aid in the establishment and support of associations, institutions, funds or trusts for the benefit of employees or former employees of the company or its predecessors, or the dependants or connections of such employees or former employees, and grant pensions and allowances, and make payments towards insurance or for any object similar to those set forth in this paragraph, and to subscribe or guarantee money for charitable, benevolent, educational and religious objects or for any exhibition or for any public, general or useful objects;
9.	to promote any company for the purpose of acquiring or taking over any of the property and liabilities of the company or for any other purpose that may benefit the company;
10.	to purchase, lease, take in exchange, hire or otherwise acquire any personal property and any rights or privileges that the company considers necessary or convenient for the purposes of its business;
11.	to construct, maintain, alter, renovate and demolish any buildings or works necessary or convenient for its objects;
12.	to take land in Bermuda by way of lease or letting agreement for a term not exceeding twenty-one years, being land "bona fide" required for the purposes of the business of the company and with the consent of the Minister granted in his discretion to take land in Bermuda by way of lease or letting agreement for a similar period in order to provide accommodation or recreational facilities for its officers and employees and when no longer necessary for any of the above purposes to terminate or transfer the lease or letting agreement;
13.	except to the extent, if any, as may be otherwise expressly provided in its incorporating Act or memorandum and subject to the provisions of this Act every company shall have power to invest the moneys of the Company by way of mortgage of real or personal property of every description in Bermuda or elsewhere and to sell, exchange, vary, or dispose of such mortgage as the company shall from time to time determine;
14.	to construct, improve, maintain, work, manage, carry out or control any roads, ways, tramways, branches or sidings, bridges, reservoirs, watercourses, wharves, factories, warehouses, electric works, shops, stores and other works and conveniences that may advance the interests of the company and contribute to, subsidize or otherwise assist or take part in the construction, improvement, maintenance, working, management, carrying out or control thereof;
15.	to raise and assist in raising money for, and aid by way of bonus, loan, promise, endorsement, guarantee or otherwise, any person and guarantee the performance or fulfillment of any contracts or obligations of any person, and in particular guarantee the payment of the principal of and interest on the debt obligations of any such person;
16.	to borrow or raise or secure the payment of money in such manner as the company may think fit;
17.	to draw, make, accept, endorse, discount, execute and issue bills of exchange, promissory notes, bills of lading, warrants and other negotiable or transferable instruments;
18.	when properly authorized to do so, to sell, lease, exchange or otherwise dispose of the undertaking of the company or any part thereof as an entirety or substantially as an entirety for such consideration as the company thinks fit;
19.	to sell, improve, manage, develop, exchange, lease, dispose of, turn to account or otherwise deal with the property of the company in the ordinary course of its business;
20.	to adopt such means of making known the products of the company as may seem expedient, and in particular by advertising, by purchase and exhibition of works of art or interest, by publication of books and periodicals and by granting prizes and rewards and making donations;
21.	to cause the company to be registered and recognised in any foreign jurisdiction, and designate persons therein according to the laws of that foreign jurisdiction or to represent the company and to accept service for and on behalf of the company of any process or suit;
22.	to allot and issue fully-paid shares of the company in payment or part payment of any property purchase or otherwise acquired by the company or for any past services performed for the company;
23.	to distribute among the members of the company in cash, kind, specie or otherwise as may be resolved, by way of dividend, bonus or in any other manner considered advisable, any property of the company, but not so as to decrease the capital of the company unless the distribution is made for the purpose of enabling the company to be dissolved or the distribution, apart from this paragraph, would be otherwise lawful;
24.	to establish agencies and branches;
25.	to take or hold mortgages, hypothecs, liens and charges to secure payment of the purchase price, or of any unpaid balance of the purchase price, of any part of the property of the company of whatsoever kind sold by the company, or for any money due to the company from purchasers and others and to sell or otherwise dispose of any such mortgage, hypothec, lien or charge;
26.	to pay all costs and expenses of or incidental to the incorporation and organisation of the company;
27.	to invest and deal with the moneys of the company not immediately required for the objects of the company in such manner as may be determined;
28.	to do any of the things authorised by this subsection and all things authorised by its memorandum as principals, agents, contractors, trustees or otherwise, and either alone or in conjunction with others;
29.	to do all such other things as are incidental or conducive to the attainment of the objects and the exercise of the powers of the company.
Every company may exercise its powers beyond the boundaries of Bermuda to the extent to which the laws in force where the powers are sought to be exercised permit.

THE COMPANIES ACT 1981 SECOND SCHEDULE
A company may by reference include in its memorandum any of the following objects that is to say the business of:
(a)	~~insurance and re insurance of all kinds;~~
(b)	packaging of goods of all kinds;
(c)	buying, selling and dealing in goods of all kinds;
(d)	designing and manufacturing of goods of all kinds;
(e)	mining and quarrying and exploration for metals, minerals, fossil fuels and precious stones of all kinds and their preparation for sale or use;
(f)	exploring for, the drilling for, the moving, transporting and re-fining petroleum and hydro carbon products including oil and oil products;
(g)	scientific research including the improvement, discovery and development of processes, inventions, patents and designs and the construction, maintenance and operation of laboratories and research centres;
(h)	land, sea and air undertakings including the land, ship and air carriage of passengers, mails and goods of all kinds;
(i)	ships and aircraft owners, managers, operators, agents, builders and repairers;
(j)	acquiring, owning, selling, chartering, repairing or dealing in ships and aircraft;
(k)	travel agents, freight contractors and forwarding agents;
(1)	dock owners, wharfingers, warehousemen;
(m)	ship chandlers and dealing in rope, canvas oil and ship stores of all kinds;
(n)	all forms of engineering;
~~(o)~~	~~developing, operating, advising or acting as technical consultants to any other enterprise or business;~~
(p)	farmers, livestock breeders and keepers, graziers, butchers, tanners and processors of and dealers in all kinds of live and dead stock, wool, hides, tallow, grain, vegetables and other produce;
(q)	acquiring by purchase or otherwise and holding as an investment inventions, patents, trade marks, trade names, trade secrets, designs and the like;
(r)	buying, selling, hiring, letting and dealing in conveyances of any sort; and
(s)	employing, providing, hiring out and acting as agent for artists, actors, entertainers of all sorts, authors, composers, producers, engineers and experts or specialists of any kind.
(t)	to acquire by purchase or otherwise hold, sell, dispose of and deal in real property situated outside Bermuda and in personal property of all kinds wheresoever situated.
(u)	to enter into any guarantee, contract of indemnity or suretyship and to assure, support or secure with or without consideration or benefit the performance of any obligations of any person or persons and to guarantee the fidelity of individuals filling or about to fill situations of trust or confidence.

BY-LAWS

OF

PCI EVER, INC.
(a Delaware Corporation)

APRIL 22, 1998

PCI EVER, INC.

BY-LAWS

Article I

OFFICES

Section 1. The registered office of PCI EVER, INC. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

          Section 1.      The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof, except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

          Section 2.      A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

          Section 3.      Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

          Section 1.      The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

          Section 2.      A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

          Section 3.       (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                               (b) Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof.

                               (c) Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

          Section 4.       (a) As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section of this Article.

                               (b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                               (c) The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                               (d) The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

          Section 5.      The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

          Section 6.      Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

          Section 7.      Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

          Section 8.      The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

          Section 9.      Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit hereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

          Section 1.      The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

          Section 2.      The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

          Section 3.      Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

          Section 1.      The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

          Section 2.      The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

          Section 3.      No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

          All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

          All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

          Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF PCI EVER, INC
FIRST: The name of the corporation is: PCI Ever, Inc. SECOND: The address of the Corporation's registered office in the State of Delaware is 1013 Centre Road, New Castle County, Delaware 19805. The registered agent is Corporation Service Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law ("DGCL"). FOURTH: The total number of shares of stock that the Corporation shall have authority to issue shall be One Thousand (1,000) shares of Common Stock, par value One Dollar ($1.00) per share. FIFTH: Unless required by the By-Laws, the election of the Board of Directors need not be by written ballot. SIXTH: The Board of Directors shall have the power to make, alter, or repeal the By-Laws of the Corporation. SEVENTH: The Corporation shall indemnify its officers and directors to the full extent permitted by the DGCL, as amended from time to time. EIGHTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, for any act or omission, except that a director may be liable (i) for breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. The elimination and limitation of liability provided herein shall continue after a director has ceased to occupy such position as to acts or omissions occurring during such director's term or terms of office. Any amendment, repeal or modification of this Article Eighth shall not adversely affect any right of protection of a director of the Corporation existing at the time of such repeal or modification. NINTH: Scott E. Waxman is the sole incorporator and his mailing address is 1313 North Market Street, Wilmington, Delaware 19801.
	/s/ Scott E. Waxman Scott E. Waxman Incorporator
DATED: April 21, 1998

BY-LAWS

OF

PCI HOLDINGS, INC.
(a Delaware Corporation)

APRIL 30, 1998

PCI HOLDINGS, INC.

BY-LAWS

Article I

OFFICES

Section 1. The registered office of PCI HOLDINGS, INC. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETINGS OF SHAREHOLDERS

               Section 1.      The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the Board) and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

               Section 2.      A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

               Section 3.      Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

               Section 1.      The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

               Section 2.      A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

               Section 3.       (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                                    (b) Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof.

                                    (c) Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

               Section 4.       (a) As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article.

                                    (b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                                    (c) The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                                    (d) The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

               Section 5.      The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

               Section 6.      Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

               Section 7.      Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

               Section 8.      The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

               Section 9.      Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

               Section 1.      The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

               Section 2.      The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

               Section 3.      Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

               Section 1.      The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

               Section 2.      The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

               Section 3.      No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

               All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

               All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to-time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

               Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF PCI HOLDINGS, INC.
The undersigned, for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:
ARTICLE I
The name of the corporation is PCI Holdings, Inc.
ARTICLE II
The address of its registered office In the State of Delaware is 1013 Centre Road, Wilmington, County of New Castle. The name of its registered agent at such address is Corporation Service Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is: To engage in any business approved by the Board of Directors for which corporations may be organized under the General Corporation Law of Delaware.
ARTICLE IV
The Corporation shall have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00).
ARTICLE V
The name and mailing address of the incorporator is as follows: NAME MAILING ADDRESS Leslie C. Zimberg 1801 K Street, N.W., Suite 900 Washington, D.C. 20006
ARTICLE VI
Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.
ARTICLE VII
The Corporation is to have perpetual existence.
ARTICLE VIII
In furtherance and not in limitation of the power conferred by statute, the Board of Directors shall have the power to adopt, amend, alter and repeal the By-Laws of the Corporation.
ARTICLE IX
Meetings of stockholders may be held within or without the State of Delaware. The books of the Corporation may be kept (subject to any provision contained in the Delaware statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
ARTICLE XI
No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article XI shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.
ARTICLE XII
The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware now existing or as such laws may hereafter be amended. I, THE UNDERSIGNED, being the incorporator hereinbefore named, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 15th day of April 1998.
	/s/ Leslie C. Zimberg Leslie C. Zimberg Incorporator

FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA AUG 04 1994 NO 12113-94 CHERYLA. LAU SECRETARY OF STATE
ARTICLES OF INCORPORATION OF PCI NETHERLANDS CORPORATION, a Nevada Corporation The undersigned natural person acting as an incorporator of a corporation under Chapter 78 of the Nevada Revised Statutes adopts the following articles of incorporation: ARTICLE I The name of the Corporation is PCI Netherlands Corporation , a Nevada corporation (the "Corporation"). ARTICLE II The address and location of the principal office of the Corporation in the State of Nevada is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501. ARTICLE III The name and address of the resident agent for the Corporation in the State of Nevada is Sierra Corporate Services, 241 Ridge Street, Fourth Floor, Reno, Nevada 89501. ARTICLE IV The purpose for which the Corporation is formed is to engage in any lawful activity. ARTICLE V Section 1 . The Corporation shall be authorized to issue 2,500 shares of capital stock with par value of ONE DOLLAR ($1.00) per share. Section 2 . All of the shares of stock shall be of the same class, without preference or distinction. Section 3 . The capital stock of the Corporation, after the amount of capital has been paid in money, property or services, as the board of directors shall determine, shall not be subject to assessment to pay the debts of the Corporation, nor for any other purpose, and no stock issued as fully paid shall ever be assessable or assessed and the articles of incorporation shall not be amended in this respect. Section 4 . Cumulative voting by any shareholder is denied. Section 5 . No shareholder shall, by reason of holding shares of any class of stock, have any preemptive or preferential right to purchase or subscribe for any shares of any class of stock now or hereafter authorized or any notes, debentures or bonds convertible into or carrying options or warrants to purchase shares of any class of stock now or hereafter authorized, whether or not the issuance of any shares, notes, debentures or bonds would adversely affect the dividend or voting rights of the shareholder . ARTICLE VI The period of existence of the Corporation is perpetual. ARTICLE VII The name and post office address of the incorporator is John B. Galvin, P. O. Box 2670, Reno, Nevada 89505. ARTICLE VIII The members of the governing board of the Corporation shall be designated as "directors". The board of directors shall consist of five (5) members. The number of directors of the Corporation may be increased or decreased from time to time as provided in the bylaws of the Corporation. The names and addresses of the members of the initial board of directors who shall serve as directors until his or her successors shall have been elected and qualified is as follows:
NAME H. Lowell Davis Paul F. Naughton William Dana Shapiro Robert W. Hollis Margie Vollmann	ADDRESS 506 Richards Lane Alexandria, Virginia 22302 1058 Harriman Street Great Falls, Virginia 22066 1033 Broad Branch Court McLean, Virginia 22101 900 19 ^th Street N.W., #600 Washington, D.C. 20006 2765 Edgewood Drive Reno, Nevada 89503
ARTICLE IX In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by Chapter 78 of the Nevada Revised Statutes or other statutes or laws of the State of Nevada, the board of directors is expressly authorized: (i) to make,amend, alter, or repeal the bylaws of the Corporation; (ii) to adopt from time to time bylaw provisions with respect to indemnification or directors, officers, employees, agents and other persons as it shall deem expedient and in the best interests of the Corporation and to the extent permitted by law; and (iii) to fix and determine designations, preferences, privileges, rights and powers and relative, participating, optional or other special rights, qualifications, limitations or restrictions on the capital stock of the Corporation as provided by Nev. Rev. Stat. Section 78.195, unless otherwise provided herein. ARTICLE X To the extent specified from time to time by the board of directors, no officer or director of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as an officer or director, excepting only (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of dividends in violation of Nev. Rev. Stat. Section 78.300. No amendment or repeal of this Article X applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and executed these Articles of Incorporation this first day of August, 1994.
	/s/ JOHN B. GALVIN John B. Galvin
STATE OF NEVADA ) ) ss. COUNTY OF WASHOE ) On this first day of August, 1994, personally appeared before the undersigned, a Notary Public, in and for the County of Washoe, State of Nevada, John B. Galvin, known to me to be the person described in and who executed the foregoing instrument freely and voluntarily and for the uses and purposes mentioned. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
MARIALICE BIGRIGG Notary Public - State of Nevada Appointment Recorded in Washoe County MY APPOINTMENT EXPIRES NOV. 20, 1994		/s/ MARIALICE BIGRIGG NOTARY PUBLIC

WAIVER OF SOLE INCORPORATOR

I, John B. Galvin, being the sole incorporator named in the articles of incorporation (the "Articles") of PCI NETHERLANDS CORPORATION, a Nevada corporation (the "Corporation"), which Articles were received and filed in the office of the Secretary of State of the State of Nevada on August 4, 1994, waive all my respective right, title and interest in and to any stock or property of the Corporation and any right of management thereof.

DATED : This 31 ^ST day of August, 1994

/s/ JOHN B. GALVIN
John B. Galvin

                FILED
      IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
          STATE OF NEVADA

                AUG 04 1994
CHERYL A LAU SECRETARY OF STATE

STATE OF NEVADA
SECRETARY OF STATE

CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
BY RESIDENT AGENT

In the Matter of PCI Netherlands Corporation, a Nevada corporation, Sierra Corporate Services, with address at 241 Ridge Street, 4th Floor, Reno, Nevada 89501, hereby accepts the appointment as Resident Agent of the above-entitled corporation in accordance with NRS Section 78.090.

FURTHERMORE , that the registered office in this state is located at 241 Ridge Street, 4th Floor, Reno, Nevada 89501.

IN WITNESS WHEREOF , I have hereunto set my hand this first day of August, 1994.

SIERRA CORPORATE SERVICES

By: /s/ JOHN B. GALVIN
John B. Galvin

SECRETARY OF STATE

BYLAWS

PCI NETHERLANDS CORPORATION

ARTICLE 1

Identification

Section 1.1. Name . The name of the Corporation is PCI Netherlands Corporation.

Section 1.2. Resident Office and Resident Agent . The address of the resident office of the Corporation is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501; and the name of the resident agent at this address is Sierra Corporate Services.

Section 1.3. Other Offices . Branch or subordinate offices may be established by the Board of Directors.

Section 1.4. Seal . The seal of the Corporation will be circular in form and mounted upon a metal die, suitable for impressing the same upon paper.

Section 1.5. Fiscal Year . The fiscal year of the Corporation will be determined by resolution of the Board of Directors.

ARTICLE 2

Capital Stock

Section 2.1. Consideration for Shares . The capital stock may be issued for such consideration, expressed in dollars, not less than the par value thereof, if any, as shall be fixed from time to time by the Board of Directors. Treasury shares may be disposed of by the Corporation for such consideration expressed in dollars as may be fixed from time to time by the Board of Directors.

Section 2.2. Payment for Shares . The consideration for the issuance of shares may be paid, in whole or in part, in cash, labor or services actually performed or personal property, or real estate or leases thereof; the term "personal property" may include the legally enforceable obligation of a subscriber to pay the balance of a subscription for the issuance of shares. Any shares issued shall be considered to be fully paid and nonassessable if (a) the entire amount, or (b) not less than the amount characterized as capital pursuant to NRS Section 78.270 accompanied by the legally enforceable obligation of the subscriber to pay the balance of the subscription has been received by the Corporation. The judgment of the Board of Directors as to the value of the consideration received for shares shall be conclusive as to all except the then existing shareholders for whom. it shall be conclusive in the absence of actual fraud in the transaction. No certificate shall be issued for any share until the share is fully paid.

Section 2.3. Certificates Representing Shares . Each holder of the capital stock of the Corporation is entitled to a certificate signed by the President or a Vice President, and the Secretary or an Assistant Secretary, certifying the number of shares owned by the shareholder in the Corporation.

Section 2.4. Transfer of Stock . The Corporation will register a transfer of a stock certificate presented to it for transfer if the following conditions have been fulfilled:

(a) Endorsement . The certificate is properly endorsed by the registered shareholder or by the shareholder's duly authorized agent;

(b) Witnessing . The endorsement or endorsements are witnessed by one witness unless this requirement is waived by the Secretary;

(c) Adverse Claims . The Corporation has no notice of any adverse claims or has discharged any duty to inquire into any adverse claims; and

(d) Collection of Taxes . There has been compliance with any applicable law relating to the collection of taxes.

ARTICLE 3

The Shareholders

Section 3.1. Place of Shareholder Meetings . Meetings of the shareholders of the Corporation shall be held at the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, or such other place as may be designated by the Chairman, the President or the Board of Directors, or by the written consent of all shareholders entitled to vote at the meeting given either before or after the meeting and filed with the Secretary.

Section 3.2. Annual Shareholder Meeting . Unless a written consent of all of the shareholders entitled to vote at the annual meeting is filed with the Secretary in lieu of an annual meeting, the annual shareholders' meeting shall be held at 10:00 o'clock a.m. in the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, on the fifteenth day of the third month following the end of the Corporation's fiscal year, if this day is not a legal holiday, and if a holiday, then on the first following day that is not a legal holiday. In the event the annual shareholder's meeting is not held at such time and place, the Board of Directors, the Chairman of the Board of Directors, the President or shareholders holding not less that one-tenth of all the shares entitled to vote at the meeting may call the annual meeting of the shareholders. The failure to hold the annual meeting or to file the written consent in lieu thereof will not cause a forfeiture or dissolution of the Corporation.

Section 3.3. Special Shareholder Meetings . Special shareholders' meetings may be called by the Board of Directors, the Chairman, the President or shareholders holding not less than one-tenth of all the shares entitled to vote at the meeting.

Section 3.4. Notice of Shareholder Meetings -- Waiver . Written notice stating the place, day and hour of a shareholders' meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered not less than ten (10) days, nor more than fifty (50) days before the date of the meeting, either personally, or by mail, or by other means of written communication, charges prepaid, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each registered shareholder entitled to vote at the meeting. If mailed, the notice shall be considered to be delivered when deposited in the United States mail addressed to the shareholder at the shareholder's address as it appears on the stock transfer books of the Corporation, with postage prepaid. If a shareholder gives no address, notice shall be deemed to have been given to the shareholder if sent by mail or other written communication addressed to the place where the Corporation's principal office is located, or if published at least once in some newspaper of general circulation in the county in which the Corporation's principal office is located. Waiver by a shareholder in writing of notice of a meeting, is equivalent to giving notice. Attendance by a shareholder, without objection to the notice, whether in person or by proxy, at a meeting is a waiver of notice of the meeting.

Section 3.5. Shareholder Quorum . A majority of the shares entitled to vote, represented in person or by proxy, is a quorum at a shareholders' meeting. The shareholders present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.

Section 3.6. Adjourned Shareholder Meetings and Notice Thereof . Any shareholders' meeting, whether annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy, but in the absence of a quorum no other business may be transacted at any shareholders' meeting.

When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. As to any adjournment of less than thirty (30) days, it shall not be necessary to give any notice or the time and place of the adjourned meeting or of the business to be transacted, other than by announcement at the meeting at which the adjournment is taken.

Section 3.7. Entry of Notice . An entry in the minutes of any meeting of shareholders, whether annual or special, to the effect that notice has been duly given shall be conclusive and-incontrovertible evidence that due notice of the meeting was given-to all shareholders as required by law and these Bylaws.

Section 3.8. Voting . Except as otherwise provided by law, only persons in whose names shares entitled to vote stand on the stock registry of the Corporation on the day three (3) days prior to any shareholders' meeting, or, if a record date for voting purposes is fixed as provided in Article 6, Section 6.1, of these Bylaws, then on that record date, shall be entitled to vote at the meeting. Voting may be viva voce or by ballot; provided, however, that all elections for Directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Except as otherwise provided by an express provision of the Articles of Incorporation or by an express provision of law, each full share is entitled to one vote and, when a quorum is present at the commencement of any shareholders' meeting, the vote of the holders of a majority of the shares entitled to vote present, in person or by proxy, shall decide any question brought before the shareholders' meeting. Fractional shares shall not be entitled to any voting rights whatsoever.

Section 3.9. Consent of Absentees . The transactions of any shareholders' meeting, either annual or special and however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes thereof, all such waivers, consents or approvals shall be filed with the Secretary or be made a part of the minutes of the meeting.

Section 3.10. Action or Ratification of Action Without Meeting . Any action which, under applicable provisions of law, may be taken or ratified at a meeting of the shareholders, may be taken or ratified without a meeting if authorized in writing by shareholders holding the percentage of the voting power required by law for taking the action by written consent and the written consent is filed with the Secretary.

Section 3.11. Proxies . Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by the person or by the person's duly authorized agent and filed with the Secretary of the Corporation; provided that no proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless the person executing it specified therein the length of time for which the proxy is to continue in force, which in no event shall exceed seven (7) years from the date of its execution.

Section 3.12. Definition of "Shareholder" . As used in these Bylaws, the term "shareholder", and any term of like import, shall include all persons entitled to vote the shares held by a shareholder, unless the context in which the term is used indicates that a different meaning is intended.

ARTICLE 4

The Board of Directors

Section 4.1. Number of Directors . The Board of Directors of the Corporation shall consist of five (5) members. The members of the Board of Directors need not be shareholders. The number of members of the Board of Directors may be increased or decreased from time to time as provided in Section 4.2 below.

Section 4.2. Increase or Decrease of Directors . The number of Directors of the Corporation may be increased or decreased from time to time, at a meeting of the shareholders or by the filing of a written consent, by the affirmative vote of a majority of the issued and outstanding shares of stock of the Corporation. This section of the Bylaws may be amended only by the affirmative vote, at a meeting of the shareholders, of a majority or the issued and outstanding shares of stock of the Corporation.

Section 4.3. Election . Members of the initial Board of Directors shall hold office until the first annual shareholders' meeting or until their successors shall have been elected and qualified. At the first annual shareholder's meeting and at each annual meeting thereafter, or by a written consent filed in lieu of an annual meeting, the shareholders shall elect Directors to hold office until the time for the next succeeding annual meeting. If any annual shareholders' meeting is not held and a written consent in lieu of an annual meeting is not filed, or the Directors are not elected, the Directors may be elected at any special shareholders' meeting held for that purpose or by the filing of a special written consent. Each Director shall hold office for the term for which the Director is elected or until the Director's successor shall be elected and qualified.

Section 4.4. Vacancies . Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors was present, or by a sole remaining Director. A Director elected to fill a vacancy shall be elected for the unexpired term of the Director's predecessor in office.

A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any Director or Directors are elected to elect the full authorized number of Directors to be voted for at that meeting, or if a vacancy is declared by the Board of Directors for any reason permitted by law.

The shareholders may elect a Director or Directors at any time to fill any vacancy or vacancies not filled by the Directors. If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board or the shareholders shall have power to elect a successor to take office when the resignation is to become effective.

No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of the Director's term of office.

Section 4.5. Place of Meetings . Immediately after the annual meeting of the shareholders, at the same place as the meeting of the shareholders, the Board of Directors shall meet each year for the purpose of organization, election of officers, and consideration of any other business that may properly be brought before the meeting. No notice of any kind to either old or new members of the Board of Directors for this annual meeting shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.7.

Section 4.6. Regular Meetings . Regular meetings of the Board of Directors shall be held at the times and places within or without the State of Nevada as may be designated from time to time by resolution of the Board or by written consent of all members of the Board. No notice of any kind to members of the Board for these regular meetings shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.7.

Section 4.7. Other Meetings . Other meetings of the Board of Directors for any purpose or purposes may be held at any time upon call by the President or, if the President is absent or unable or refuses to act, by any Vice President or by any two (2) Directors. The other meetings may be held at any place within or without the State of Nevada as may be designated from time to time by resolution of the Board of Directors or by written consent of all Directors.

Written notice of the time and place of other meetings shall be delivered personally to each Director or sent to each Director by mail or other form of written communication, charged prepaid, addressed to the Director at the Director's address as it is shown upon the records of the Corporation or, if it is not so shown on the Corporation's records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case the notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the place in which the principal office if the Corporation is located at least seventy-two (72) hours prior to the time of the holding of the meeting. In case the notice is delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. The mailing, telegraphing or delivery as above provided shall constitute due, legal and personal notice to the Director.

Section 4.8. Notice of Adjourned Meetings . Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place be fixed at the meeting adjourned.

Section 4.9. Entry of Notice . An entry in the minutes of any special meeting of the Board of Directors to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the special meeting was given to all Directors as required by law and by these Bylaws.

Section 4.10. Waiver of Notice . The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the Directors not present signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 4.11. Quorum . A majority of the authorized number of Directors, or, in the event that a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a majority of the exact authorized number of Directors, shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number be required by law or by the Articles of Incorporation. If the number of Directors pursuant to the Articles of Incorporation is one or two, the unanimous consent of said Directors shall be necessary for Board of Directors' action.

Section 4.12. Adjournment . A quorum of the Directors may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board.

Section 4.13. Action Without Meeting . Any action required or permitted to be taken by the Board of Directors under the Articles of Incorporation, these Bylaws, or under applicable law, may be taken without a meeting if all members of the Board of Directors shall individually or collectively consent, in writing, to the action. Any action by written consent shall have the same force and effect as a unanimous vote of all Directors. All written consents must be filed with the Secretary.

Section 4.14. Fees and Compensation . Directors shall not receive any stated salary for their services as Directors or as members of committees, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed to Directors for the Director's services. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor.

Section 4.15. Indemnification of Directors and Officers .

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

(b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for misfeasance or nonfeasance in the performance of the person's duty to the Corporation unless and only to the extent that, despite the adjudication of liability but in view of all circumstances of the case, such person fairly and equitably merits indemnification.

(c) To the extent that a person who may be entitled to indemnification by the Corporation under this section is or has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection therewith.

(d) Any indemnification under subsections (a) and (b) shall be made by the Corporation only as authorized in the specific -case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsection (a) or (b). Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs, by either independent legal counsel in a written opinion, or the stockholders, or (iii) if required by law, by the court in which such action, suit or proceeding was brought or another court of competent jurisdiction.

(e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding if such payment is authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Corporation as authorized in this section.

(f) The indemnification provided by this section shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person.

(g) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the Corporation would have the power to indemnify the person against such liability under the provisions of this section.

(h) For the purposes of this section, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity.

(i) The provisions of this section shall apply to the estate, executors, administrators, heirs, legatees or devisees of a person entitled to indemnification hereunder and the term "person," where used in the section shall include the estate, executors, administrators, heirs, legatees or devisees of such person.

Section 4.16. Powers of Directors . Subject to limitations of the Articles of Incorporation, of these Bylaws, and of applicable law as to action to be authorized or approved by the shareholders and subject to the duties of Directors as prescribed by these Bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be controlled by, the Board of Directors. Without prejudice to these general powers, but subject to the same limitations, it is hereby expressly declared that the Directors shall have the following powers:

First: To select and remove all officers, agents and employees of the Corporation, to delegate the power to remove any or all officers, agents and employees of the Corporation to an officer or officer, prescribe such powers and duties for them as may not be inconsistent with law, with the Articles of Incorporation or the Bylaws, fix their compensation, and require from them security for faithful service.

Second: To conduct, manage and control the affairs and business of the Corporation and to make such rules and regulations therefor not inconsistent with law, with the Articles of Incorporation or these Bylaws, as they may deem best.

Third: To change the principal office of the Corporation from one location to another within the same county as provided in Article 1, Section 1.2, hereof; to fix and locate from time to time one or more subsidiary offices of the Corporation, within or without the State of Nevada as provided in Article 1, Section 1.3, hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of the seal and of the certificates from time to time, as in their judgment they may deem best, provided the seal and the certificates shall at all times comply with the provisions of law.

Fourth: To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor.

Fifth: To authorize the issue of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, tangible or intangible property actually received or such other consideration as may be authorized by law.

Sixth: To adopt and administer, or provide for the administration of, employee stock purchase plans, employee stock option plans and any other plans or arrangements whereby Directors, officers, employees or agents of the Corporation or any other entity may be entitled to acquire authorized but unissued or treasury stock or other securities of the Corporation, upon such terms and conditions as may from time to time be permitted by law.

Seventh: To appoint an Executive Committee and other committees, and to delegate to the Executive Committee any of the powers and authority of the Board in the management of the business and affairs of the Corporation except the power to declare dividends and to adopt, amend or repeal Bylaws. The Board of Directors shall have the power to prescribe the manner in which proceedings of the Executive Committee and other committees shall be conducted. The committees shall keep regular minutes of their meetings and report the same to the Board when required. The Executive Committee must be composed of two (2) or more Directors.

Eighth: To lend money in furtherance of any of the purposes of the Corporation; to invest the funds of the Corporation from time to time; and to take and hold any property as security for the payment of funds so loaned or invested.

Ninth: To lend money to employees, officers and Directors, and to otherwise assist employees, officers and Directors. Loans to members of the Board of Directors shall be made only upon the approval of a majority of the Board of Directors excluding the Director to whom the loan is to be made.

Tenth: To declare dividends upon the capital stock of the Corporation in cash, in property, or in shares of the capital stock, subject to the limitation of the Articles of Incorporation and of applicable law. Before payment of any dividend, there may be set aside out of the funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interests of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE 5

The Officers

Section 5.1. Officers . The officers of the Corporation shall be a President, a Vice President, a Secretary and a Treasurer, and each of them shall be appointed by the Board of Directors. The Corporation may also have such other executive officers, including one (1) or more Vice Presidents, one (1) or more Assistant Secretaries and one (1) or more Assistant Treasurers, and other subordinate officers as may be appointed in accordance with the provisions of Section 5.3 of this Article 5. Officers need not be Directors. One person may hold two (2)or more offices, except those of President and Vice President. However, if the Corporation only has one shareholder, then one person may hold the offices of both President and Vice President.

Section 5.2. Election . The officers of the Corporation, except those officers as may be appointed in accordance with the provisions of Section 5.3 or Section 5.5 of this Article, shall be chosen annually by the Board of Directors, and each shall hold office until the officer shall resign or shall be removed or otherwise disqualified to serve, or the officer's successor shall be elected and qualified; provided that officers may be appointed at any time by the Board of Directors, or, as permitted by Section 5.3 of this Article, by the President, for the purpose of initially filling an office or filling a newly created or vacant office.

Section 5.3. Subordinate Officers . The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the Corporation may require, each of whom shall hold office for the term, have the authority and perform the duties as are provided in these Bylaws or as the Board of Directors may from time to time determine.

Section 5.4. Removal and Resignation . Any officer may, subject to any contractual arrangements between the officer and the Corporation, be removed, either with or without cause, by a majority of the Directors in office at the time, at any regular or special meeting of the Board, or by any officer upon whom the power of removal may be conferred by the Board of Directors.

Any officer may resign at any time by giving written notice to the Board of Directors, to the President, or to the Secretary of the Corporation. Any resignation shall take effect at the date of the receipt of the notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective.

Section 5.5. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to that office.

Section 5.6. President . Subject to the control of the Board of Directors, the President shall have general supervision, direction and control of the business and officers of the Corporation. In the absence of a Chairman of the Board, the President shall preside at all meetings of the shareholders and at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing committees, including the Executive Committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a Corporation, and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.

Section 5.7. Vice Presidents . In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other 'powers and perform such other duties as may be prescribed for them respectively by the Board of Directors, the President, or these Bylaws.

Section 5.8. Secretary . The Secretary shall keep or cause to be kept, at the principal office or such other place as the Board of Directors may order, a book of minutes of all meetings of Directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof.

The Secretary shall keep or cause to be kept, in any form permitted by law, at the principal office or at the office of the Corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for shares, and the number and date of cancellation of every certificate surrendered for cancellation.

The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board of Directors required by these Bylaws or by law to be given, and shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws.

Section 5.9. Treasurer . The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any Director.

The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and Directors, whenever they request it, an account of all transactions as Treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of office of Treasurer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation.

Section 5.10. Corporate Bank Accounts . Bank accounts in the name of the Corporation may be opened without the approval of the Board of Directors if opened with the consent of the President and the Treasurer of the Corporation. The Treasurer shall inform the Board of Directors of any bank account opened by the Corporation pursuant to the authority granted in this section at the next meeting of the Board of Directors.

Section 5. 11. Transfers of Authority . in case of the absence of any officer of the Corporation, or for any reason that the Board of Directors may consider sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer or to any Director or employee of the Corporation, provided a majority of the full Board of Directors concurs.

ARTICLE 6

Miscellaneous

Section 6. 1. Record Date and Closing Stock Books . The Board of Directors may fix a time in the future, as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders, or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall not be more than sixty (60) days prior to the date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record on that date shall be entitled to notice of and to vote at the meeting, or to receive the dividend, distribution or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. The Board of Directors may close the books of the Corporation against transfers of shares during the whole or any part of the sixty (60) day period.

Section 6.2. Inspection of Corporate Records . The share register or duplicate share register shall be open to inspection upon at least five (5) days written demand of any shareholder who has been a shareholder for at least six (6) months preceding his demand or any person holding, or authorized in writing by the holders of, at least five percent (5%) of all of the Corporation's- outstanding shares, at any reasonable time. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection is not desired for any purpose which is in the interest of a business or object other than the business of the Corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose.

Unless the Corporation furnishes a detailed annual financial statement, the books of account and all financial records of the Corporation shall be open to inspection upon at least five (5) days written demand of any stockholder of record and who owns not less than fifteen percent (15%) of all of the Corporation's issued and outstanding shares, at any reasonable time, and shall include the right to audit the same. The stockholder shall pay, in advance, for the cost for making extracts and conducting an audit. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection, extracts or audit is not desired for any purpose not related to his interest in the Corporation as a stockholder.

Any inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand for any inspection shall be made in writing upon the President of the Corporation.

Section 6.3. Checks, Drafts, etc . All checks, drafts, bonds, bills of exchange, or other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors.

Section 6.4. Contracts. etc., How Executed . The Board of Directors, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument or document in the name of and on behalf of the Corporation, and the authority may be general or confined to specific instances. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust, mortgages and corporate instruments or documents requiring the corporate seal, and certificates for shares of stock owned by the Corporation shall be executed, signed or endorsed by the President or any Vice President and by the Secretary (or any Assistant Secretary) or the Treasurer (or any Assistant Treasurer). The Board of Directors may, however, authorize any one (1) of these officers to sign any of such instruments, for and on behalf of the Corporation, without necessity of countersignature; may designate officers or employees of the Corporation, other than those named above, who may, in the name of the Corporation, sign such instruments; and may authorize the use of facsimile signatures or any of such persons. No officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit to render it liable for any purpose or to any amount except as specifically authorized in these Bylaws or by the Board of Directors in accordance with these Bylaws.

Section 6.5. Certificates of Stock . A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares are fully paid up. All certificates shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and Secretary or by a facsimile of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Before it becomes effective, every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust company, either domestic or foreign, as registrar of transfers, as required or permitted by law.

In case any officer or, officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any certificate or certificates shall cease to be an officer or officers of the Corporation, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of the Corporation.

Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or these Bylaws may provide; provided, however, that any certificate so issued prior to full payment shall state the amount remaining unpaid and the terms of payment thereof.

Section 6.6. Lost Certificates of Stock. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates, or the shareholder's legal representative, to advertise the same in any manner as it shall require or give the Corporation a bond in any sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed, or both.

Section 6.7. Representation of Shares of Other Corporations . The President or any Vice President and the Secretary or any Assistant Secretary of this Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to these officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other corporation or corporations may be exercised either by these officers in person or by any persons authorized so to do by proxy or power of attorney duly executed by these officers.

Section 6.8. Inspection of Bylaws . The Corporation shall keep in its principal business office the original or a copy of the Bylaws as amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours.

ARTICLE 7

Amendments

Section 7. 1. Power of Shareholders . New Bylaws may be adopted or these Bylaws may be amended or repealed by the vote or written assent of shareholders entitled to exercise a majority of the voting power of the Corporation, unless a greater number is required by law, by the Articles of Incorporation or by these Bylaws.

Section 7.2. Power of Directors . Subject to the right of shareholders as provided in Section 7.1 of this Article 7 to adopt, amend or repeal Bylaws, Bylaws may be adopted, amended, or repealed by the Board of Directors; provided, however, that a Bylaw or amendment thereof changing the authorized number of Directors may be adopted, amended or repealed only by the shareholders, except that if a flexible number of Directors is authorized by the Articles of incorporation or these Bylaws, a Bylaw or amendment thereof fixing the exact number of Directors within the limits specified in the Articles of Incorporation or these Bylaws may be adopted, amended or repealed by the Board of Directors.

I, the undersigned, being the Secretary of PCI Netherlands Corporation , do hereby certify the foregoing to be the Bylaws of said corporation, as adopted at a meeting of the Board of Directors held on the 31st day of August, 1994.

/s/ WM. SHAPIRO
WILLIAM DANA SHAPIRO
Secretary to the Corporation

AGREEMENT OF PARTNERSHIP

THIS AGREEMENT, dated as of April 22, 1998 between Potomac Capital Joint Leasing Corporation, a Delaware corporation ("PCJL") and Potomac Nevada Corporation, a Nevada corporation ("PNC") (PCJL and PNC being hereinafter sometimes referred to singly, as a "Venturer," and collectively, as the "Venturers").

W I T N E S S E T H :

WHEREAS, PCJL and PNC desire to form a joint venture under the laws of the State of Delaware, upon the terms and conditions and for the purposes hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement:

" Advance " means any transfer of money or other property, in the nature of a loan, by a Venturer to the Joint Venture or any amount paid for or on behalf of the Joint Venture by a Venturer for which such Venturer is entitled to be reimbursed by the Joint Venture including any interest or other amount payable in respect of such money or property as agreed upon in accordance with Section 3.7. Contributions to the capital of the Joint Venture pursuant to the terms of this Agreement shall not be deemed to be Advances.

" Capital Account " means the account established and maintained for each Venturer pursuant to Section 3.4.

" Distribution " means transfer of money or other property to a Venturer, in its capacity as a Venturer, from the Joint Venture, other than reimbursement of expenses of such Venturer in accordance with the terms of this Agreement or a payment in respect of an Advance. Property transferred to a Venturer as part of a Distribution shall be valued at its fair market value on the date of transfer.

" Equipment " means commercial aircraft or other equipment satisfactory to the Venturers.

" Effective Date " is defined in Section 8.9 hereof.

" Fiscal Period " means a calendar month, provided that the Fiscal Period during which the Effective Date occurs shall be deemed to commence on such Effective Date and the Fiscal Period in which the Joint Venture is dissolved pursuant to Section 5.1 shall be deemed to end on the date of such dissolution.

" Fiscal Year " means the period commencing on January 1 and ending on December 31 in each year; provided that the Fiscal Period during which the Effective Date occurs shall be deemed to commence on such Effective Date and the Fiscal Period in which the Joint Venture is dissolved pursuant to Section 5.1 shall be deemed to end on the date of such dissolution.

" Joint Venture " means the venture formed by this Agreement.

" Laws " means all ordinances, statutes, rules, regulations, orders, injunctions, writs or decrees of any government or political subdivision or agency thereof, or any court or similar entity established by any thereof

" Net Cash Flow " means for any Fiscal Period, all cash receipts of the Joint Venture in such Fiscal Period reduced by the sum of the following items paid or reserved in such Fiscal period: (i) all expenses and other duly incurred obligations of the Joint Venture; (ii) the repayment of any Advances or other amounts borrowed by the Joint Venture; (iii) any other expenditure authorized by this Agreement; and (iv) such reserves as the Venturers deem reasonably necessary to the proper operation of the business of the Joint Venture.

" Net Income or Net Loss " means, for any Fiscal Period, the difference between the gross receipts of the Joint Venture during such period and all expenses and deductions of the Joint Venture for such period determined in accordance with the Generally Accepted Accounting Principles for financial reporting.

" Person " means an individual, a corporation, a partnership, a trust, an unincorporated organization or a government or agency or political subdivision thereof.

" Pro Rata Share " means that portion of all Capital Accounts represented by the Capital Account of the applicable venturer, which shall initially be ninety-five percent (95%) for PCJL and five percent (5%) for PNC.

" Related Person " means any Person that is a Venturer or that controls, is controlled by or is under common control with, a Venturer.

ARTICLE II

FORMATION

Section 2.1 Formation . PCJL and PNC hereby enter into a joint venture pursuant to the Laws of the State of Delaware and specifically the Delaware Uniform Partnership Law.

Section 2.2 Name . The business of the Joint Venture shall be conducted under the name of PCI Nevada Investments.

Section 2.3 Place of Business . The place of business of the Joint Venture shall be located at 1575 Delucchi Lane, Suite 115, Reno, NV. 89502, or at such other place or places as the Venturers may from time to time designate.

Section 2.4 Term . The Joint Venture shall commence on the Effective Date and shall continue, unless earlier dissolved in accordance with the terms of Section 5.1, until December 31, 2018 or extended by unanimous written agreement of the Venturers.

Section 2.5 Purpose . The Joint Venture is formed to directly or indirectly purchase, lease, and finance Equipment and to engage in financial transactions. The Joint Venture shall only be limited by contractual restrictions of the Venturers in structuring any lease or financing. The Joint Venture shall, in connection with any lease, financing or other transaction, conduct such other activities as may be related to such activities during the term of the Joint Venture. In furtherance thereof, the Joint Venture may take any action and execute and deliver any documents or instruments necessary or appropriate in connection with such purposes or as otherwise contemplated in this Agreement. The Joint Venture shall not engage in any business or activity or enter into any transaction other than as authorized in this section or as unanimously agreed to by the Venturers.

ARTICLE III

FINANCIAL ARRANGEMENTS

Section 3.1 Capital Contributions.

(a) On the date hereof PCJL shall make an initial capital contribution of 9,900 shares of common stock of Aircraft International Management Company and PNC shall make an initial capital contribution of $12,558,038 cash. From time to time hereafter, if the Venturers so agree, in their sole discretion, the Venturers shall make equal additional contributions to the capital of the Joint Venture in proportion to each Venturer's Pro-Rata Share to purchase Equipment to be leased to others in the conduct of the business of the Joint Venture, to satisfy the liabilities and obligations of the Joint Venture, and for such other uses, consistent with the purpose set forth in Section 2.5 hereof, as to which the Venturers shall agree. Neither Venturer shall be obligated to make such additional contributions to the capital of the Joint Venture, but if an additional contribution is agreed to by the Venturers, each Venturer shall pay into the Joint Venture its Pro Rata Share of such contribution.

(b) Except as noted in Section 7.6 or otherwise agreed by the Venturers, no portion of any capital contribution to the Joint Venture shall bear interest.

Section 3.2 Net Income or Net Loss . Each Venturer's interest in the Joint Venture shall be expressed as a percentage equal to the ratio on any date of such Venturer's Capital Account on such date to the aggregate Capital Accounts of all Venturers on such date, such Capital Accounts to be determined after giving effect to all contributions of property or money, distributions and allocations for all periods ending on or prior to such date (as to any Venturer, its "Percentage Interest"). Net Income or Net Loss for each Fiscal Period of the Joint Venture shall be allocated to each Venturer in accordance with its Percentage Interest as of the end of such Fiscal Period. Every item of income, gain, loss, deduction, credit or tax preference entering into the computation of Net Income or Net Loss, or attributable to any Fiscal Period during which Net Income or Net Loss was realized, shall be allocated to each Venturer in the same proportion and at the same time as such Net Income or Net Loss is allocated to such Venturer.

Section 3.3 Distributions . The Net Cash Flow of the Joint Venture may be distributed to the Venturers from time to time in such amounts and at such times as shall be agreed to by the Venturers. Each Venturer shall receive in each such Distribution an amount equal to its Pro Rata Share of the total amount of such Distribution.

Section 3.4 Capital Accounts . A separate capital account shall be established and maintained for each Venturer in accordance with the rules of Section 704 of the Internal Revenue Code of 1986 and Treasury Regulations Section 1.704-1(b). The Capital Account for each Venturer shall initially be credited with the amount of its initial contribution to the capital of the Joint Venture, and thereafter shall be increased by the amount of (i) any additional contributions to the capital of the Joint Venture made by such Venturer pursuant to Section 3.1 (a) and (ii) any Net Income allocated to such Venturer pursuant to Section 3.2, and shall be decreased by the amount of (x) any Distribution to such Venturer made pursuant to Section 3.3 and (y) any Net Loss allocated to such Venturer pursuant to Section 3.2.

Section 3.5 Rights to Capital Accounts and Distributions . No Venturer shall have the right to demand the return of or to withdraw any portion of its contributions to the capital of the Joint Venture. No Venturer shall have any right to priority over the other Venturer as to any Distribution.

Section 3.6 Expenses . The Joint Venture shall pay (or shall reimburse a Venturer who shall-have paid) all expenses incurred in connection with the organization, qualification and conduct of business of the Joint Venture, including without limitation the reasonable fees and expenses of legal counsel, accountants or others retained pursuant to Section 7.2. PCJL will provide accounting, bookkeeping and cash management services to the Joint Venture and will act as the Tax Matters partner for tax preparation, filing and administration.

Section 3.7 Advances . A Venturer may, with the consent of the other Venturer, make Advances from time to time to the Joint Venture on such terms and conditions as to which the Venturers may agree. No such advance shall either increase the lending Venturer's interest in the capital of the Joint Venture or entitle such Venturer to any increased share in the Joint Venture's Net Income, Net Loss, or Net Cash Flow.

ARTICLE IV

MANAGEMENT

Section 4.1 Business of the Joint Venture . Each Venturer shall have equal rights in the management and conduct of the business of the Joint Venture. All decisions regarding the management and affairs of the Joint Venture shall be made by unanimous consent of both Venturers.

Section 4.2 Restrictions on Rights and Powers . Without the consent of both Venturers, neither Venturer shall have the right to:

(a) Do any act in contravention of this Agreement;

(b) Do any act that would make it impossible to carry on the ordinary business of the Joint Venture or would be outside the ordinary course of its business;

(d) Possess Joint Venture property, or assign its interests or rights in specific Joint Venture property, for other than a Joint Venture purpose;

(e) Borrow money or give any guaranty on behalf or in the name of the Joint Venture, or mortgage, pledge, grant a security interest in or otherwise encumber any property of the Joint Venture;

(f) On behalf or in the name of the Joint Venture, make, execute, deliver, accept or endorse (except for collection) any promissory note or commercial paper belonging to the Joint Venture;

(g) Assign, transfer, pledge, compromise or release any claim or debt due the Joint Venture, except upon payment in full thereof, or arbitrate or consent to the arbitration of any dispute or controversy to which the Joint Venture is a party or in which it has an interest;

(h) On behalf or in the name of the Joint Venture, make, execute, or deliver any assignment for the benefit of creditors or any bond, confession of judgment, warrant of attorney, power of attorney, indemnity bond or surety bond;

(i) Cause the Joint Venture to do business in or otherwise become subject to the taxing powers of any jurisdiction other than the United States, Delaware and Nevada;

(j) Purchase, sell, lease or enter into any written or oral contract for the purchase, sale or lease of Equipment or interest in Equipment or other property;

(k) On behalf or in the name of the Joint Venture, make any obligation or enter into any undertaking for the accommodation of any other Person, whether as endorser, surety, guarantor, or otherwise;

(l) On behalf or in the name of the Joint Venture, enter into any contract, lease, agreement or undertaking with the exception that PCJL has been designated by both Venturers to open a bank account in the name of the Joint Venture;

(m) Make, execute or deliver any assignment for the benefit of creditors or any contract to sell or contract of sale of all or substantially all of the Joint Venture's property; or

(n) On behalf or in the name of the Joint Venture, employ any Person.

Section 4.3. Liability . No Venturer shall incur any liability for any mistake or error in judgment made in good faith and in the exercise of due care in connection with the conduct of the business of the Joint Venture, and no Venturer shall be deemed to have violated any of the provisions of the Agreement for any such mistake or error.

Section 4.4 Right to Admit Venturers . There shall be no right to admit additional Venturers to the Joint Venture.

Section 4.5 Indemnification by Venturer Acting Unilaterally. As provided in Sections 4.1 and 4.2 hereof, all contracts, which inure to the benefit of, or impose obligations upon, the Joint Venture or either of the Venturers must be agreed to by both Venturers. Should either Venturer, through its unilateral action, without the consent of the other Venturer having been first obtained, cause the Joint Venture to become obligated or indebted for any amount whatsoever through contract, lease, sale, purchase or otherwise, said contracting Venturer agrees to indemnify and hold the other Venturer harmless for all losses, costs, expenses, and subsequent charges, costs, liabilities incurred by the Joint Venture as a result of any such unilateral action by said Venturer which is binding upon the Joint Venture.

ARTICLE V

DISSOLUTION

Section 5.1 Events of Dissolution . The Joint Venture shall be dissolved if:

(a) Proceedings in bankruptcy, or for the reorganization, of a Venturer, or for the adjustment of any or all of its debts, under the Federal Bankruptcy Code, or any part thereof, or under any other laws, whether state or Federal, for the relief of debtors, now or hereafter existing, shall be commenced by a Venturer, or shall be commenced against a Venturer and shall not be discharged within thirty (30) days of its commencement, or a receiver or trustee shall be appointed for a Venturer or any part of its assets, or any proceeding shall be instituted for the dissolution or the full or partial liquidation of a Venturer, and such receiver or trustee shall not be discharged within thirty (30) days of his appointment, or such proceeding shall not be discharged within thirty (30) days of its commencement; or

(b) The Venturers shall unanimously consent to dissolve the Joint Venture; or

(c) All Equipment owned by the Joint Venture shall be sold, destroyed or otherwise disposed of and the Joint Venture is no longer pursuing further activity within the scope of this Agreement; or

(d) Expiration of its terms on December 31, 2018, unless extended by written agreement of all the Venturers; or

(e) The occurrence of any other event which, under applicable law, would result in dissolution.

Section 5.2 Liquidation . In the event that the Joint Venture shall be dissolved for any reason whatsoever (including, without limitation, termination of the Joint Venture pursuant to Section 2.4 hereof), a full and general account of its assets, liabilities and transactions shall be taken. The assets of the Joint Venture shall be sold and turned into cash as soon as possible and all debts and other amounts due the Joint Venture shall be collected. The proceeds thereof shall thereupon:

(a) First, be applied to discharge the debts and liabilities of the Joint Venture (including all Advances not theretofore repaid) and the expenses of liquidation;

(b) Second, be disbursed as a Distribution in liquidation to the Venturers, ratably in accordance with the respective amounts of their Capital Accounts, until such Capital Accounts have been reduced to zero or such proceeds fully disbursed; and

(c) Third, be disbursed as a Distribution in liquidation to the Venturers to the extent of their positive Capital Account balance in accordance with their respective Percent Interests, until such balances are reduced to zero and then the balance shall be distributed to each such Venturer in accordance with their respective Pro Rata Share. If a Venturer's Capital Account has a deficit balance (after giving effect to all previous contributions, distributions and allocations), such Venturer shall contribute to its Capital Account of the Joint Venture the amount necessary to restore such deficit balance to zero in compliance with Treasury Regulation Section 1.704-1 (b)(2)(ii)(b)(3).

No Venturer shall have the right to demand or receive property in kind as part of its Distribution in liquidation of the Joint Venture, or to enjoy any right to priority over the other Venturer as to such Distribution.

ARTICLE VI

DEADLOCK

Section 6.1 Deadlock Conditions . In the event that at any time the Venturers are unable to agree on the management and conduct of the Joint Venture, each Venturer shall be entitled to initiate the "Buy-Sell" procedure hereinafter set forth, provided the Venturer desiring to initiate the "Buy-Sell" procedure (hereinafter called the "Initiating Venturer") shall notify the other Venturer (hereinafter in this Section called the "Other Venturer"), referring to this Section requesting that the Joint Venture adopt proposed resolutions set forth in such notice at a meeting of the Venturers to be held at the principal office of the Initiating Venturer at a date and time, which shall be specified in such notice, during normal business hours and not less than 20 or more than 30 days following the giving of such notice. Such notice shall be in writing and shall be mailed certified mail, return receipt requested to the Other Venturer. The Venturers shall hold a meeting at the date and time so specified. If by reason of any failure by the Other Venturer to attend such meeting or to waive notice of the same or vote in favor of such proposed resolutions the Joint Venture does not adopt such resolutions at such meeting substantially in the form set forth in such notice, then the Initiating Venturer may proceed in the manner and subject to the conditions set forth below in this Section. The Other Venturer's receipt of the notice described in this Section shall prevent the Other Venturer from initiating the "Buy-Sell" procedure, the Venturer who first notifies the other Venturer of its intention to initiate the "Buy-Sell" procedure shall be deemed the Initiating Venturer.

Section 6.2 Buy-Sell Procedure . (a) Subject to Section 6.1, the Initiating Venturer may submit to the Other Venturer within 30 days after the date of the meeting of the Venturers described in Section 6.1 two irrevocable offers in writing, the first shall be an offer to purchase the interest of the Other Venturer in the Joint Venture and the second shall be an offer to sell to the Other Venturer the Initiating Venturer's interest in the Joint Venture. The price to be contained in the offer to purchase shall be such amount of cash as the Initiating Venturer shall determine. The price to be specified in the offer to sell shall be in the same amount and cash form as the offer to purchase. Upon due submission of irrevocable offers as aforesaid until termination of the "Buy-Sell" procedure, neither Venturer shall thereafter have the right to submit other offers pursuant to this Section 7.2 or to otherwise dispose of its interest in the Joint Venture. Upon submission of such offers, the Joint Venture shall make no further Distributions. If such submission does not coincide with the close of a monthly accounting period, earnings and profits of that period shall be prorated as of the date of submission.

(b) Upon due submission of said irrevocable offers, the Other Venturer must accept one such offer and may not reject both offers (the acceptance of one such offer to constitute a rejection of the other and is to be made in writing within 60 days following the submission of the offers). If the Other Venturer has not accepted in writing one of the offers in such 60-day period, the Initiating Venturer shall have the option to purchase the Other Venturer's interest in the Joint Venture or sell its interest in the Joint Venture to the Other Venturer in accordance with the terms of the related offer and shall give the Other Venturer written notice within 30 days of the completion of such 60-day period of its election to buy or sell an interest in the Joint Venture under the terms of the related offer. If the Initiating Venturer fails to give such notice, the "Buy-Sell" procedure initiated by the Initiating Venturer shall terminate and be of no further effect.

(c) Within 10 days after the acceptance of any offer is made or deemed to have been made, the purchasing Venturer shall give the selling Venturer written notice, specifying (i) the time and place of the closing for the purchase, and (ii) the closing date for the purchase, which closing date shall be not more than 60 days after the date of the purchasing Venturer's notice or the date on which deemed acceptance occurs, as the case may be; provided. however , that if there is any litigation or governmental requirements relating to such purchase and sale, the closing date shall be postponed until a date not more than 20 days after the termination of such litigation or satisfaction of such governmental requirements. At such closing, the selling Venturer will deliver or cause to be delivered to the purchasing Venturer all documents necessary to effect the sale of its interest in the Joint Venture with all necessary transfer and documentary stamps, if any, affixed, to the purchasing Venturer against payment of the purchase price in immediately available funds.

ARTICLE VII

MISCELLANEOUS SUBSTANTIVE PROVISIONS

Section 7.1 Books and Records . Full and accurate books and records of cash transactions shall be maintained by the Joint Venture at the location referred to in Section 2.3 or at another location the Venturers may from time to time designate. Each Venturer shall have access to such records and shall be entitled to examine them at any time during ordinary business hours.

Section 7.2 Agents . In connection with the Joint Venture's day to day activity, the Venturers shall have the power jointly to employ investment counsel, brokers, accountants and attorneys to act in the Joint Venture's behalf, as may be deemed necessary, incidental or convenient to the proper administration of the Joint Venture property and business. The Joint Venture shall have the power to regularly retain independent certified public accountants, with a nationally recognized standing and reputation reasonably satisfactory to both Venturers, to audit the financial statements of the Joint Venture pursuant to Section 7.1.

Section 7.3 Insufficient Joint Venture Assets . In the event that upon the dissolution of the Joint Venture the assets of the Joint Venture are insufficient to pay and discharge all unsecured obligations and liabilities of the Joint Venture authorized in accordance with this Agreement and upon which recourse may be had against a Venturer personally by Persons other than a Venturer, each Venturer shall contribute in cash to the capital of the Joint Venture a percentage of the aggregate amount required by the Joint Venture to pay and discharge in full all of such Joint Venture obligations and liabilities equal to the Pro Rata Share of such Venturer.

Section 7.4 Conflicts of Interest . A Venturer may engage in or possess interests in other business ventures of any kind or description for its own account, including without limitation engagement in, or holding interest in other ventures engaged in the purchasing or leasing of Equipment, and no Venturer shall be obligated to provide the Joint Venture or the other Venturer with any prior notice of or opportunity to participate in any such activity or other venture but may take advantage of those opportunities for its own account or for the accounts of other partnerships, Venturers or enterprises with which they are associated. Neither the Joint Venture nor the other Venturer shall have any rights by virtue of this Agreement in such independent business ventures or to the income or profits derived therefrom. The Joint Venture, with the consent of both Ventures, may acquire property or services from, and may enter into leases and other contracts with, Related Persons.

Section 7.5 Use of Name . The name of the Joint Venture shall belong to and may be used by the Joint Venture, and shall not be sold or otherwise disposed of, so long as the Joint Venture shall continue in existence.

Section 7.6 Bank Accounts . The Joint Venture shall maintain a bank account or bank accounts in the Joint Venture's name in one or more national or state banks. All checks, demands for money and notes of the Joint Venture shall be signed by such person or persons as the Venturers jointly may from time to time designate. Checks and drafts shall be drawn on the Joint Venture's bank accounts for the Joint Venture's purposes only. Available funds of the Joint Venture may be invested for such time as they are not needed in the ordinary course of the business of the Joint Venture, in such investments as the Venturers shall jointly designate.

The Venturers shall agree how to invest any funds on a short term basis with any overnight investment program or other short term investment program established by any parent, subsidiary or affiliate of either Venturer.

ARTICLE VIII

MISCELLANEOUS PROCEDURAL PROVISIONS

Section 8.1 Notices . All notices, offers, acceptances, approvals, waivers, requests, demands and other communications hereunder or under any instrument, certificate or other instrument delivered in connection with the transactions described herein shall be in writing, shall be addressed as provided below and shall be considered as properly given (a) if delivered in person, (b) if sent by overnight delivery service (including, without limitation, Federal Express, ETA, Emory, Purolater, DHL, AirBorne, and other similar overnight delivery service), (c) in the event overnight delivery services are not readily available, mailed by first class United States mail, postage pre-paid, registered or certified with return receipt requested, or (d) if sent by facsimile and confirmed. Notice so mailed shall be effective upon delivery if by hand, or otherwise upon deposit. Notice given in any other manner shall be effective upon receipt by the addressee; provided. however , that if any notice is tendered to an addressee and the delivery thereof is refused by such addressee, such notice shall be effective upon such tender. For the purposes of notice, the addresses of the parties shall be as set forth below; provided, however , that any party shall have the right to change its address for notice hereunder to any other location within the continental United States by giving thirty (30) days' notice to the other party in the manner set forth hereinabove. The initial addresses of the parties hereto are as follows:

                                        (a)     if to PCJL

                                                  Potomac Capital Joint Leasing Corporation
                                                  1575 Delucchi Lane
                                                  Suite 115
                                                  Reno, NV. 89502
                                                  ATTN: Treasurer

                                        (b)     if to PNC

                                                  Potomac Nevada Corporation
                                                  1575 Delucchi Lane
                                                  Suite 115
                                                  Reno, NV. 89502
                                                  ATTN: Treasurer

or such other address as may be specified in a notice.

Section 8.2 Amendments and Modifications . This Agreement may be amended or modified only upon the execution by each Venturer of a writing setting forth such amendment or modification.

Section 8.3 Binding Effect: Assignment: Entire Agreement . This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assigns of the Venturers. No Venturer shall have the right to assign any of its rights or obligations under this Agreement, or its interest in the Joint Venture, except to a corporation that is a Related Person as to such Venturer, or to any other Person upon the prior written consent of the other Venturer; provided, that (i) such assignment will not constitute a dissolution or a termination of the Joint Venture for Federal income tax purposes, or cause any portion of any investment tax credit or depreciation in respect of any Equipment to be recaptured or disallowed for Federal income tax purposes, and (ii) such Person may lawfully become a Venturer. No Person entitled to become a Venturer under this Section by virtue of an assignment shall become a Venturer until this Agreement, or a separate agreement by which such Person agrees to be bound by the terms of this Agreement, shall have been signed by such Person, and all registrations, filings and other acts required to record the assignment to such Person of an interest as a Venturer in the Joint Venture shall have been completed. This Agreement constitutes the entire agreement between the Venturers as to the subject matter hereof.

Section 8.4 Further Assurances . Each Venturer hereby agrees, for itself and its respective successors and assigns, to execute any and all instruments and to take any and all actions that are or may become necessary or proper to carry out the intent of this Agreement. Whenever a consent of a Venturer is required such consent shall be in the sole discretion of such Venturer and shall be in writing.

Section 8.5 Severability . If any provision of this Agreement shall be held invalid under any applicable Laws, such invalidity shall not affect any other provisions of this Agreement that can be given effect without the invalid provision and, to this end, the provisions hereof are severable.

Section 8.6 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be taken to be the original, but all of which, together, shall be taken to be but one instrument.

Section 8.7 Waiver . No waiver of any provision of this Agreement shall be valid unless in writing and signed by the person or party against whom charged.

Section 8.8 Applicable Law . This Agreement shall be subject to and governed by the Laws of the State of Delaware and specifically the Delaware Uniform Partnership Law, without regard to the rules of conflicts of law.

Section 8.9 Effective Date . This Agreement shall be effective as of April 22, 1998.

Section 8.10 Headings . Headings of the Articles and Sections of this Agreement have been included-for convenience of reference only and shall not to any extent have the effect of modifying, amending or changing the express terms and provisions of this Agreement.

Section 8.11 Gender and Number . As used herein, unless the context clearly indicates the contrary, the singular number shall include the plural, the plural the singular and the use of any gender shall be applicable to all genders.

IN WITNESS WHEREOF, the undersigned have executed this Joint Venture Agreement on the date set forth on the first page hereof

Date: 4/2/98	POTOMAC CAPITAL JOINT LEASING CORPORATION By: /s/
Date: 4/2/98	POTOMAC NEVADA CORPORATION By: /s/ LESLIE C.ZIMBERG

NEW CASTLE COUNTY REGISTRATION OF TRADE NAMES, PARTNERSHIPS & ASSOCIATIONS
TRADE NAME:	PCI Nevada Investments, a general partnership
Business Address:	1575 Delucchi Lane, Suite 115 Reno, Nevada 89502
Telephone Number:	(702) 825-6080
Title of Person, Firm or Association:
Names and addresses of all owners, members, or partners comprising the firm:
NAME Potomac Capital Joint Leasing Corporation Potomac Nevada Corporation		ADDRESS 1575 Delucchi Lane, Suite 115 Reno, Nevada 89502 1575 Delucchi Lane, Suite 115 Reno, Nevada 89502
Date of Formation:	April 15, 1998
Nature of Business: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
DISTRICT OF COLUMBIA ) ) SS.: CITY OF WASHINGTON ) BEFORE ME, the Subscriber, a Notary Public in and for the District of Columbia, personally appeared Leslie C. Zimberg, Vice President of Potomac Capital Joint Leasing Corporation, a principal in the business described in the foregoing Certificate, who, having first been sworn by me according to law did depose and say as follows: 1. She is Vice President of a principal in the business described in the foregoing certificate. 2. That the foregoing information provided in the foregoing certificate is true, correct and complete.
Sworn and subscribed before me this 15th day of April, 1998. /s/ KIM B.JONES Notary Public My Commission Expires May 14,2000		/s/ LESLIE C. ZIMBERG Affiant CERTIFIED AS A TRUE COPY ATTEST :SHARON AGNEW PROTHONOTARY BY /s/ DEIRDRE SADLER-CREW

FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA AUG 24 1995 NO 14611-95 DEAN HELLER SECRETARY
ARTICLES OF INCORPORATION OF PCI QUEENSLAND CORPORATION, a Nevada Corporation The undersigned natural person acting as an incorporator of a corporation under Chapter 78 of the Nevada Revised Statutes adopts the following articles of incorporation: ARTICLE I The name of the Corporation is PCI Queensland Corporation, a Nevada corporation (the "Corporation"). ARTICLE II The address and location of the principal office of the Corporation in the State of Nevada is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501. ARTICLE III The name and address of the resident agent for the Corporation in the State of Nevada is Sierra Corporate Services, 241 Ridge Street, Fourth Floor, Reno, Nevada 89501. ARTICLE IV The purpose for which the Corporation is formed is to engage in any lawful activity. ARTICLE V Section 1 . The Corporation shall be authorized to issue 2,500 shares of capital stock with par value of ONE DOLLAR ($1.00) per share. Section 2 . Al of the shares of stock shall be of the same class, without preference or distinction. Section 3 . The capital stock of the Corporation, after the amount of capital has been paid in money, property or services, as the board of directors shall determine, shall not be subject to assessment to pay the debts of the Corporation, nor for any other purpose, and no stock issued as fully paid shall ever be assessable or assessed and the articles of incorporation shall not be amended in this respect. Section 4 . Cumulative voting by any shareholder is denied. Section 5 . No shareholder shall. by reason of holding shares of any class of stock have any preemptive or preferential right to purchase or subscribe for any shares of any class of stock now or hereafter authorized or any notes, debentures or bonds convertible into or carrying options or warrants to purchase shares of any class of stock now or hereafter authorized. Whether or not the issuance of any shares, notes, debentures or bonds would adversely affect the dividend or voting rights of the shareholder. ARTICLE VI The period of existence of the Corporation is perpetual. ARTICLE VII The name and post office address of the incorporator is John B. Galvin, P. O. Box 2670, Reno, Nevada 89505. ARTICLE VIII The members of the governing board of the Corporation shall be designated as "directors". The board of directors shall consist of five (5) members. The number of directors of the Corporation may be increased or decreased from time to time as provided in the bylaws of the Corporation. The names and addresses of the members of the initial board of directors who shall serve as directors until his or her successors shall have been elected are qualified is as follows:
NAME H. Lowell Davis Paul F. Naughton William Dana Shapiro Robert W. Hollis MargieVollmann	ADDRESS 506 Richards Lane Alexandria, Virginia 22302 1058 Harriman Street Great Falls, Virginia 22066 1033 Broad Branch Court McLean, Virginia 22101 900 19th Street N.W., #600 Washington, D.C. 20006 2765 Edgewood Drive Reno, Nevada 89503
ARTICLE IX In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by Chapter 78 of the Nevada Revised Statutes or other statutes or laws of the State of Nevada, the board of directors is expressly authorized: (i) to make amend, alter, or repeal the bylaws of the Corporation; (ii) to adopt from time to time bylaw provisions with respect to indemnification of directors, officers, employees, agents and other persons as it shall deem expedient and in the best interests of the Corporation and to the extent permitted by law; and (iii) to fix and determine designations, preferences, privileges rights and powers and relative, participating, optional or other special rights, qualifications limitations or restrictions on the capital stock of the Corporation as provided by Nev. Rev. Stat. Section 78.195. unless otherwise provided herein. ARTICLE X No officer or director of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as an officer or director, excepting only (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of dividends in violation of Nev. Rev. Stat. Section 78.300. No amendment or repeal of this Article X applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and executed these Articles of Incorporation this 23 ^rd day of August, 1995.
	/s/ JOHN B.GALVIN John B. Galvin
STATE OF NEVADA ) ) ss COUNTY OF WASHOE ) On this 23 ^rd day of August, 1995, personally appeared before the undersigned, a Notary Public, in and for the County of Washoe, State of Nevada, John B. Galvin, known to me to be the person described in and who executed the foregoing instrument freely and voluntarily and for the uses and purposes mentioned. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
MARIALICE BIGRIGG Notary Public - State of Nevada Appointment Recorded in Washoe County MY APPOINTMENT EXPIRES NOV. 20 1998	/s/ MARIALICE BIGRIGG NOTARY PUBLIC

                 FILED
       IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
          STATE OF NEVADA
                AUG 24 1995
NO. 14611-94
     DEAN HELLER, SECRETARY

STATE OF NEVADA
SECRETARY OF STATE

CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
BY RESIDENT AGENT

In the Matter of PCI Queensland Corporation , a Nevada corporation, Sierra Corporate Services , with address at 241 Ridge Street, 4th Floor, Reno, Nevada 89501, hereby accepts the appointment as Resident Agent of the above-entitled corporation in accordance with NRS Section 78.090.

FURTHERMORE , that the registered office in this state is located at 241 Ridge Street, 4th Floor, Reno, Nevada 89501.

IN WITNESS WHEREOF , I have hereunto set my hand this 23 ^rd day of August, 1995

SIERRA CORPORATE SERVICES

By: /s/ JOHN B. GALVIN
John B. Galvin

BYLAWS OF PCI QUEENSLAND CORPORATION ARTICLE 1 Identification Section 1.1. Name . The name of the Corporation is PCI Queensland Corporation. Section 1.2. Resident Office and Resident Agent . The address of the resident office of the Corporation is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501; and the name of the resident agent at this address is Sierra Corporate Services. Section 1.3. Other Offices . Branch or subordinate offices may be established by the Board of Directors. Section 1.4. Seal . The seal of the Corporation will be circular in form and mounted upon a metal die, suitable for impressing the same upon paper. Section 1.5. Fiscal Year . The fiscal year of the Corporation will be determined by resolution of the Board of Directors. ARTICLE 2 Capital Stock Section 2.1. Consideration for Shares . The capital stock may be issued for such consideration, expressed in dollars, not less than the par value thereof, if any, as shall be fixed from time to time by the Board of Directors. Treasury shares may be disposed of by the Corporation for such consideration expressed in dollars as may be fixed from time to time by the Board of Directors. Section 2.2. Payment for Shares . The consideration for the issuance of shares may be paid, in whole or in part, in cash, labor or services actually performed or personal property, or real estate or leases thereof; the term "personal property" may include the legally enforceable obligation of a subscriber to pay the balance of a subscription for the issuance of shares. Any shares issued shall be considered to be fully paid and nonassessable if (a) the entire amount, or (b) not less than the amount characterized as capital pursuant to NRS Section 78.270 accompanied by the legally enforceable obligation of the subscriber to pay the balance of the subscription has been received by the Corporation. The judgment of the Board of Directors as to the value of the consideration received for shares shall be conclusive as to all except the then existing shareholders for whom it shall be conclusive in the absence of actual fraud in the transaction. No certificate shall be issued for any share until the share is fully paid. Section 2.3. Certificates Representing Shares . Each holder of the capital stock of the Corporation is entitled to a certificate signed by the President or a Vice President, and the Secretary or an Assistant Secretary, certifying the number of shares owned by the shareholder in the Corporation. Section 2.4. Transfer of Stock . The Corporation will register a transfer of a stock certificate presented to it for transfer if the following conditions have been fulfilled:
	(a) Endorsement . The certificate is properly endorsed by the registered shareholder or by the shareholder's duly authorized agent; (b) Witnessing . The endorsement or endorsements are witnessed by one witness unless this requirement is waived by the Secretary; (c) Adverse Claims . The Corporation has no notice of any adverse claims or has discharged any duty to inquire into any adverse claims; and (d) Collection of Taxes . There has been compliance with any applicable law relating to the collection of taxes.
ARTICLE 3 The Shareholders Section 3.1. Place of Shareholder Meetings . Meetings of the shareholders of the Corporation shall be held at the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, or such other place as may be designated by the Chairman, the President or the Board of Directors, or by the written consent of all shareholders entitled to vote at the meeting given either before or after the meeting and filed with the Secretary. Section 3.2. Annual Shareholder Meeting . Unless a written consent of all of the shareholders entitled to vote at the annual meeting is filed with the Secretary in lieu of an annual meeting, the annual shareholders' meeting shall be held at 10:00 o'clock a.m. in the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, on the fifteenth day of the third month following the- end of the Corporation's fiscal year, if this day is not a legal holiday, and if a holiday, then on the first following day that is not a legal holiday. In the event the annual shareholder's meeting is not held at such time and place, the Board of Directors, the Chairman of the Board of Directors, the President or shareholders holding not less that one-tenth of all the shares entitled to vote at the meeting may call the annual meeting of the shareholders. The failure to hold the annual meeting or to file the written consent in lieu thereof will not cause a forfeiture or dissolution of the Corporation. Section 3.3. Special Shareholder Meetings . Special shareholders' meetings may be called by the Board of Directors, the Chairman, the President or shareholders holding not less than one-tenth of all the shares entitled to vote at the meeting. Section 3.4. Notice of Shareholder Meetings -- Waiver . Written notice stating the place, day and hour of a shareholders' meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered not less than ten (10) days, nor more than fifty (50) days before the date of the meeting, either personally, or by mail, or by other means of written communication, charges prepaid, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each registered shareholder entitled to vote at the meeting. If mailed, the notice shall be considered to be delivered when deposited in the United States mail addressed to the shareholder at the shareholder's address as it appears on the stock transfer books of the Corporation, with postage prepaid. If a shareholder gives no address, notice shall be deemed to have been given to the shareholder if sent by mail or other written communication addressed to the place where the Corporation's principal office is located, or if published at least once in some newspaper of general circulation in the county in which the Corporation's principal office is located. Waiver by a shareholder in writing of notice of a meeting, is equivalent to giving notice. Attendance by a shareholder, without objection to the notice, whether in person or by proxy, at a meeting is a waiver of notice of the meeting. Section 3.5. Shareholder Quorum . A majority of the shares entitled to vote, represented in person or by proxy, is a quorum at a shareholders' meeting. The shareholders present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 3.6. Adjourned Shareholder Meetings and Notice Thereof . Any shareholders' meeting, whether annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy, but in the absence of a quorum no other business may be transacted at any shareholders' meeting. When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. As to any adjournment of less than thirty (30) days, it shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted, other than by announcement at the meeting at which the adjournment is taken. Section 3.7. Entry of Notice . An entry in the minutes of any meeting of shareholders, whether annual or special, to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the meeting was given to all shareholders as required by law and these Bylaws. Section 3.8. Voting . Except as otherwise provided by law, only persons in whose names shares entitled to vote stand on the stock registry of the Corporation on the day three (3) days prior to any shareholders' meeting, or, if a record date for voting purposes is fixed as provided in Article 6, Section 6.1, of these Bylaws, then on that record date, shall be entitled to vote at the meeting. Voting may be viva voce or by ballot; provided, however, that all elections for Directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Except as otherwise provided by an express provision of the Articles of Incorporation or by an express provision of law, each full share is entitled to one vote and, when a quorum is present at the commencement of any shareholders' meeting, the vote of the holders of a majority of the shares entitled to vote present, in person or by proxy, shall decide any question brought before the shareholders' meeting. Fractional shares shall not be entitled to any voting rights whatsoever. Section 3.9. Consent of Absentees . The transactions of any shareholders' meeting, either annual or special and however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes thereof, all such waivers, consents or approvals shall be filed with the Secretary or be made a part of the minutes of the meeting. Section 3.10. Action or Ratification of Action Without Meeting . Any action which, under applicable provisions of law, may be taken or ratified at a meeting of the shareholders, may be taken or ratified without a meeting if authorized in writing by shareholders holding the percentage of the voting power required by law for taking the action by written consent and the written consent is filed with the Secretary. Section 3.11. Proxies . Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by the person or by the person's duly authorized agent and filed with the Secretary of the Corporation; provided that no proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless the person executing it specified therein the length of time for which the proxy is to continue in force, which in no event shall exceed seven (7) years from the date of its execution. Section 3.12. Definition of "Shareholder" . As used in these Bylaws, the term "shareholder", and any term of like import, shall include all persons entitled to vote the shares held by a shareholder, unless the context in which the term is used indicates that a different meaning is intended. ARTICLE 4 The Board of Directors Section 4.1. Number of Directors . The Board of Directors of the Corporation shall consist of five (5) members. The members of the Board of Directors need not be shareholders. The number of members of the Board of Directors may be increased or decreased from time to time as provided in Section 4.2 below. Section 4.2. Increase or Decrease of Directors . The number of Directors of the Corporation may be increased or decreased from time to time, at a meeting of the shareholders or by the filing of a written consent, by the affirmative vote of a majority of the issued and outstanding shares of stock of the Corporation. This section of the Bylaws may be amended only by the affirmative vote, at a meeting of the shareholders, of a majority of the issued and outstanding shares of stock of the Corporation. Section 4.3. Election . Members of the initial Board of Directors shall hold office until the first annual shareholders' meeting or until their successors shall have been elected and qualified. At the first annual shareholder's meeting and at each annual meeting thereafter, or by a written consent filed in lieu of an annual meeting, the shareholders shall elect Directors to hold office until the time for the next succeeding annual meeting. If any annual shareholders' meeting is' not held and a written consent in lieu of an annual meeting is not filed, or the Directors are not elected, the Directors may be elected at any special shareholders' meeting held for that purpose or by the filing of a special written consent. Each Director shall hold office for the term for which the Director is elected or until the Director's successor shall be elected and qualified. Section 4.4. Vacancies . Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors was present, or by a sole remaining Director. A Director elected to fill a vacancy shall be elected for the unexpired term of the Director's predecessor in office. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any Director or Directors are elected to elect the full authorized number of Directors to be voted for at that meeting, or if a vacancy is declared by the Board of Directors for any reason permitted by law. The shareholders may elect a Director or Directors at any time to fill any vacancy or vacancies not filled by the Directors. If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board or the shareholders shall have power to elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of the Director's term of office. Section 4.5. Place of Meetings . Immediately after the annual meeting of the shareholders, at the same place as the meeting of the shareholders, the Board of Directors shall meet each year for the purpose of organization, election of officers, and consideration of any other business that may properly be brought before the meeting. No notice of any kind to either old or new members of the Board of Directors for this annual meeting shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.7. Section 4.6. Regular Meetings . Regular meetings of the Board of Directors shall be held at the times and places within or without the State of Nevada as may be designated from time to time by resolution of the Board or by written consent of all members of the Board. No notice of any kind to members of the Board for these regular meetings shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.7. Section 4.7. Other Meetines . Other meetings of the Board of Directors for any purpose or purposes may be held at any time upon call by the President or, if the President is absent or unable or refuses to act, by any Vice President or by any two (2) Directors. The other meetings may be held at any place within or without the State of Nevada as may be designated from time to time by resolution of the Board of Directors or by written consent of all Directors. Written notice of the time and place of other meetings shall be delivered personally to each Director or sent to each Director by mail or other form of written communication, charged prepaid, addressed to the Director at the Director's address as it is shown upon the records of the Corporation or, if it is not so shown on the Corporation's records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case the notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the place in which the principal office of the Corporation is located at least seventy-two (72) hours prior to the time of the holding of the meeting. In case the notice is delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. The mailing, telegraphing or delivery as above provided shall constitute due, legal and personal notice to the Director. Section 4.8. Notice of Adjourned Meetings . Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place be fixed at the meeting adjourned. Section 4.9. Entry of Notice . An entry in the minutes of any special meeting of the Board of Directors to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the special meeting was given to all Directors as required by law and by these Bylaws. Section 4.10. Waiver of Notice . The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the Directors not present signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 4.11. Quorum . A majority of the authorized number of Directors, or, in the event that a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a majority of the exact authorized number of Directors, shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number be required by law or by the Articles of Incorporation. If the number of Directors pursuant to the Articles of Incorporation is one or two, the unanimous consent of said Directors shall be necessary for Board of Directors' action. Section 4.12. Adjournment . A quorum of the Directors may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board. Section 4.13. Action Without Meeting . Any action required or permitted to be taken by the Board of Directors under the Articles of Incorporation, these Bylaws, or under applicable law, may be taken without a meeting if all members of the Board of Directors shall individually or collectively consent, in writing, to the action. Any action by written consent shall have the same force and effect as a unanimous vote of all Directors. All written consents must be filed with the Secretary. Section 4.14. Fees and Compensation . Directors shall not receive any stated salary for their services as Directors or as members of committees, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed to Directors for the Director's services. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor. Section 4.15. Indemnification of Directors and Officers . (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid or owed in settlement actually and reasonably paid or incurred by the person or rendered or levied against the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for misfeasance or nonfeasance in the performance of the person's duty to the Corporation unless and only to the extent that, despite the adjudication of liability but in view of all circumstances of the case, such person fairly and equitably merits indemnification. (c) To the extent that a person who may be entitled to indemnification by the Corporation under this section is or has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection therewith. (d) Any indemnification under subsections (a) and (b) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsection (a) or (b). Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs, by either independent legal counsel in a written opinion, or the stockholders, or (iii) if required by law, by the court in which such action, suit or proceeding was brought or another court of competent jurisdiction. (e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding if such payment is authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Corporation as authorized in this section. (f) The indemnification provided by this section shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. (g) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the Corporation would have the power to indemnify the person against such liability under the provisions of this section. (h) For the purposes of this section, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity. (i) The provisions of this section shall apply to the estate, executors, administrators, heirs, legatees or devisees of a person entitled to indemnification hereunder and the term "person," where used in the section shall include the estate, executors, administrators, heirs, legatees or devisees of such person. Section 4.16. Powers of Directors . Subject to limitations of the Articles of Incorporation, of these Bylaws, and of applicable law as to action to be authorized or approved by the shareholders and subject to the duties of Directors as prescribed by these Bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be controlled by, the Board of Directors. Without prejudice to these general powers, but subject to the same limitations, it is hereby expressly declared that the Directors shall have the following powers: First: To select and remove all officers, agents and employees of the Corporation, to delegate the power to remove any or all officers, agents and employees of the Corporation to an officer or officers, prescribe such powers and duties for them as may not be inconsistent with law, with the Articles of Incorporation or the Bylaws, fix their compensation, and require from them security for faithful service. Second: To conduct, manage and control the affairs and business of the Corporation and to make such rules and regulations therefor not inconsistent with law, with the Articles of Incorporation or these Bylaws, as they may deem best. Third: To change the principal office of the Corporation from one location to another within the same county as provided in Article 1, Section 1.2, hereof; to fix and locate from time to time one or more subsidiary offices of the Corporation, within or without the State of Nevada as provided in Article 1, Section 1.3, hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of the seal and of the certificates from time to time, as in their judgment they may deem best, provided the seal and the certificates shall at all times comply with the provisions of law. Fourth: To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor. Fifth: To authorize the issue of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, tangible or intangible property actually received or such other consideration as may be authorized by law. Sixth: To adopt and administer, or provide for the administration of, employee stock purchase plans, employee stock option plans and any other plans or arrangements whereby Directors, officers, employees or agents of the Corporation or any other entity may be entitled to acquire authorized but unissued or treasury stock or other securities of the Corporation, upon such terms and conditions as may from time to time be permitted by law. Seventh: To appoint an Executive Committee and other committees, and to delegate to the Executive Committee any of the powers and authority of the Board in the management of the business and affairs of the Corporation except the power to declare dividends and to adopt, amend or repeal Bylaws. The Board of Directors shall have the power to prescribe the manner in which proceedings of the Executive Committee and other committees shall be conducted. The committees shall keep regular minutes of their meetings and report the same to the Board when required. The Executive Committee must be composed of two (2) or more Directors. Eighth: To lend money in furtherance of any of the purposes of the Corporation; to invest the funds of the Corporation from time to time; and to take and hold any property as security for the payment of funds so loaned or invested. Ninth: To lend money to employees, officers and Directors, and to otherwise assist employees, officers and Directors. Loans to members of the Board of Directors shall be made only upon the approval of a majority of the Board of Directors excluding the Director to whom the loan is to be made. Tenth: To declare dividends upon the capital stock of the Corporation in cash, in property, or in shares of the capital stock, subject to the limitation of the Articles of Incorporation and of applicable law. Before payment of any dividend, there may be set aside out of the funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interests of the Corporation, and the Directors may modify or abolish any such reserve in the mannerin which it was created. ARTICLE 5 The Officers Section 5.1. Officers . The officers of the Corporation shall be a President, a Vice President, a Secretary and a Treasurer, and each of them shall be appointed by the Board of Directors. The Corporation may also have such other executive officers, including one (l)- Or more Vice Presidents, one (1) or more Assistant Secretaries and one (1) or more Assistant Treasurers, and other subordinate officers as may be appointed in accordance with the provisions of Section 5.3 of this Article 5. Officers need not be Directors. One person may hold two (2) or more offices, except those of President and Vice President. However, if the Corporation only has one shareholder, then one person may hold the offices of both President and Vice President. Section 5.2. Election . The officers of the Corporation, except those officers as may be appointed in accordance with the provisions of Section 5.3 or Section 5.5 of this Article, shall be chosen annually by the Board of Directors, and each shall hold office until the officer shall resign or shall be removed or otherwise disqualified to serve, or the officer's successor shall be elected and qualified; provided that officers may be appointed at any time by the Board of Directors, or, as permitted by Section 5.3 of this Article, by the President, for the purpose of initially filling an office or filling a newly created or vacant office. Section 5.3. Subordinate Officers . The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the Corporation may require, each of whom shall hold office for the term, have the authority and perform the duties as are provided in these Bylaws or as the Board of Directors may from time to time determine. Section 5.4. Removal and Resignation . Any officer may, subject to any contractual arrangements between the officer and the Corporation, be removed, either with or without cause, by a majority of the Directors in office at the time, at any regular or special meeting of the Board, or by any officer upon whom the power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving written notice to the Board of Directors, to the President, or to the Secretary of the Corporation. Any resignation shall take effect at the date of the receipt of the notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 5.5. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to that office. Section 5.6. President . Subject to the control of the Board of Directors, the President shall have general supervision, direction and control of the business and officers of the Corporation. In the absence of a Chairman of the Board, the President shall preside at all meetings of the shareholders and at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing committees, including the Executive Committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a Corporation, and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws. Section 5.7. Vice Presidents . In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other 'powers and perform such other duties as may be prescribed for them respectively by the Board of Directors, the President, or these Bylaws. Section 5.8. Secretary . The Secretary shall keep or cause to be kept, at the principal office or such other place as the Board of Directors may order, a book of minutes of all meetings of Directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof. The Secretary shall keep or cause to be kept, in any form permitted by law, at the principal office or at the office of the Corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for shares, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board of Directors required by these Bylaws or by law to be given, and shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. Section 5.9. Treasurer . The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any Director. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and Directors, whenever they request it, an account of all transactions as Treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of office of Treasurer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation. Section 5.10. Corporate Bank Accounts . Bank accounts in the name of the Corporation may be opened without the approval of the Board of Directors if opened with the consent of the President and the Treasurer of the Corporation. The Treasurer shall inform the Board of Directors of any bank account opened by the Corporation pursuant to the authority granted in this section at the next meeting of the Board of Directors. Section 5.11. Transfers of Authority . In case of the absence of any officer of the Corporation, or for any reason that the Board of Directors may consider sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer or to any Director or employee of the Corporation, provided a majority of the full Board of Directors concurs. ARTICLE 6 Miscellaneous Section 6.1. Record Date and Closing Stock Books . The Board of Directors may fix a time in the future, as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders, or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall not be more than sixty (60) days prior to the date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record on that date shall be entitled to notice of and to vote at the meeting, or to receive the dividend, distribution or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. The Board of Directors may close the books of the Corporation against transfers of shares during the whole or any part of the sixty (60) day period. Section 6.2. Inspection of Corporate Records . The share register or duplicate share register shall be open to inspection upon at least five (5) days written demand of any shareholder who has been a shareholder for at least six (6) months preceding his demand or any person holding, or authorized in writing by the holders of, at least five percent (5%) of all of the Corporation's outstanding shares, at any reasonable time. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection is not desired for any purpose which is in the interest of a business or object other than the business of the Corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose. Unless the Corporation furnishes a detailed annual financial statement, the books of account and all financial records of the Corporation shall be open to inspection upon at least five (5) days written demand of any stockholder of record and who owns not less than fifteen percent (15 %) of all of the Corporation's issued and outstanding shares, at any reasonable time, and shall include the right to audit the same. The stockholder shall pay, in advance, for the cost for making extracts and conducting an audit. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection, extracts or audit is not desired for any purpose not related to his interest in the Corporation as a stockholder. Any inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand for any inspection shall be made in writing upon the President of the Corporation. Section 6.3. Checks, Drafts, etc . All checks, drafts, bonds, bills of exchange, or other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors. Section 6.4. Contracts, etc., How Executed . The Board of Directors, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument or document in the name of and on behalf of the Corporation, and the authority may be general or confined to specific instances. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust, mortgages and corporate instruments or documents requiring the corporate seal, and certificates for shares of stock owned by the Corporation shall be executed, signed or endorsed by the President or any Vice President and by the Secretary (or any Assistant Secretary) or the Treasurer (or any Assistant Treasurer). The Board of Directors may, however, authorize any one (1) of these officers to sign any of such instruments, for and on behalf of the Corporation, without necessity of countersignature; may designate officers or employees of the Corporation, other than those named above, who may, in the name of the Corporation, sign such instruments; and may authorize the use of facsimile signatures or any of such persons. No officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit to render it liable for any purpose or to any amount except as specifically authorized in these Bylaws or by the Board of Directors in accordance with these Bylaws. Section 6.5. Certificates of Stock . A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares are fully paid up. All certificates shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and Secretary or by a facsimile of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Before it becomes effective, every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust company, either domestic or foreign, as registrar of transfers, as required or permitted by law. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any certificate or certificates shall cease to be an officer or officers of the Corporation, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of the Corporation. Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or these Bylaws may provide; provided, however, that any certificate so issued prior to full payment shall state the amount remaining unpaid and the terms of payment thereof. Section 6.6. Lost Certificates of Stock . The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates, or the shareholder's legal representative, to advertise the same in any manner as it shall require or give the Corporation a bond in any sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed, or both. Section 6.7. Representation of Shares of Other Corporations . The President or any Vice President and the Secretary or any Assistant Secretary of this Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to these officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other corporation or corporations may be exercised either by these officers in person or by any persons authorized so to do by proxy or power of attorney duly executed by these officers. Section 6.8. Inspection of Bylaws . The Corporation shall keep in its principal business office the original or a copy of the Bylaws as amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours. ARTICLE 7 Amendments Section 7.1. Power of Shareholders . New Bylaws may be adopted or these Bylaws may be amended or repealed by the vote or written assent of shareholders entitled to exercise a majority of the voting power of the Corporation, unless a greater number is required by law, by the Articles of Incorporation or by these Bylaws. Section 7.2. Power of Directors . Subject to the right of shareholders as provided in Section 7.1 of this Article 7 to adopt, amend or repeal Bylaws, Bylaws may be adopted, amended, orore repealed by the Board of Directors; provided, however, that a Bylaw or amendment thereof changing the authorized number of Directors may be adopted, amended or repealed only by the shareholders, except that if a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a Bylaw or amendment thereof fixing the exact number of Directors within the limits specified in the Articles of Incorporation or these Bylaws may be adopted, amended or repealed by the Board of Directors. I, the undersigned, being the Secretary of PCI Queensland Corporation, do hereby certify the foregoing to be the Bylaws of said corporation, as adopted by consent to action taken without meeting by the Board of Directors of the Corporation.
		/s/ WM. SHAPIRO WILLIAM DANA SHAPIRO, Secretary to the Corporation

JOINT VENTURE AGREEMENT
THIS AGREEMENT, dated as of September 1, 1984 between BT BALTIMORE, INC., a Delaware corporation ("BT Baltimore"), and BALTIMORE CAPITAL RESOURCES, INC., a Maryland corporation ("Baltimore Capital") (BT Baltimore and Baltimore Capital being hereinafter sometimes referred to, singly, as a "Venturer" and, collectively, as the "Venturers").
W I T N E S S E T H :
WHEREAS, BT Baltimore and Baltimore Capital desire to form a joint venture under the laws of the State of Delaware, upon the terms and conditions and for the purposes hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants. Herein after contained, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
As used in this Agreement:
" Advance " means any transfer of money or other property, in the nature of a loan, by a Venturer to the Joint Venture or any amount paid for or on behalf of the Joint Venture by a Venturer for which such Venturer is entitled to be reimbursed by the Joint Venture. Contributions to the capital of the Joint Venture pursuant to the terms of this Agreement shall not be deemed to be Advances.
" Affiliated Person " means any Person that is a Venturer or that controls, is controlled by or is under common control with, a Venturer.
" Capital Account " means the account established and maintained for each Venturer pursuant to Section 3.4.
" Distribution " means transfer of money or other property to a Venturer, in its capacity as a Venturer, from the Joint Venture, other than reimbursement of expenses of such Venturer in accordance with the terms of this Agreement or a payment in respect of Advances. Property transferred to a Venturer as part of a Distribution shall be valued at its fair market value on the date of transfer.
" Equipment " means commercial aircraft or other equipment satisfactory to the Venturers.
" Effective Date " is defined in Section 7.9 hereof.
" Fiscal Period " means the period commencing on January 1 and ending on December 31 in each year; provided that the Fiscal Period during which the Effective Date occurs shall be deemed to commence on such Effective Date and the Fiscal Period in which the Joint Venture is dissolved pursuant to Section 5.1 shall be deemed to end on the date of such dissolution.
" Joint Venture " means the single purpose venture formed by this Agreement.
" Laws " means all ordinances, statutes, rules, regulations, orders, injunctions, writs or decrees of any government or political subdivision or agency thereof, or any court or similar entity established by any thereof.
" Net Cash Flow " means, for any Fiscal Period, all cash receipts of the Joint Venture in such Fiscal Period derived from the conduct of business in accordance with the terms of this Agreement, reduced by the sum of the following items paid or reserved in such Fiscal Period: (i) all expenses, not including depreciation, of the Joint Venture; (ii) the repayment of any Advances or other amounts borrowed by the Joint Venture; (iii) any other expenditures authorized by this Agreement; and (iv) such reserves for accrued cash operating expenses as the Venturers deem reasonably necessary to the proper operation of the business of the Joint Venture.
" Net Income or Net Loss " means, for any Fiscal Period, the difference between the gross receipts of the Joint Venture during such period and all expenses and deductions of the Joint Venture for such period determined in accordance with the generally accepted accounting principles for financial reporting.
" Person " means an individual, a corporation, a partnership, a trust, an unincorporated organization or a government or agency or political subdivision thereof.
" Pro Rata Share " means one-ninth (1/9) for BT Baltimore and eight-ninths (8/9) for Baltimore Capital.
ARTICLE II FORMATION
Section 2.1 Formation . BT Baltimore and Baltimore Capital hereby enter into a joint venture pursuant to the Laws of the State of Delaware and specifically the Delaware Uniform Partnership Law.
Section 2.2 Name . The business of the Joint Venture shall be conducted under the name of BCR-BT Ventures.
Section 2.3 Place of Business . The principal office and place of business of the Joint Venture shall be located at 100 West Tenth Street, Wilmington, Delaware 19801, or at such other place or places as the Venturers may from time to time designate.
Section 2.4 Term . The Joint Venture shall commence on the Effective Date and shall continue, unless earlier dissolved in accordance with the terms of Section 5.1,until December 31, 2009.
Section 2.5 Purpose . The Joint Venture is formed to purchase and lease Equipment during the term of the Joint Venture to lessees approved by the Venturers and, in furtherance thereof, to take any action and to execute and deliver any documents or instruments necessary or appropriate in connection with such purposes or as otherwise contemplated in this Agreement. The Joint Venture shall not engage in any business or activity or enter into any transaction other than as authorized in this Section.
ARTICLE III FINANCIAL ARRANGEMENTS
Section 3.1 Capital Contributions . (a) Each Venturer agrees to contribute to the initial capital of the Joint Venture cash in the amounts set forth in the proposed Participation Agreement dated as of September 1, 1984 among Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), the Joint Venture, PCI-BT Ventures, the Venturers, the Loan Participants named therein, Mercantile-Safe Deposit and Trust Company, as Indenture Trustee and Wilmington Trust Company, as Owner Trustee, subject to the satisfaction of the conditions set forth in such Participation Agreement.
(b) From time to time hereafter, if the Venturers so agree, the Venturers shall contribute additional cash amounts to the capital of the Joint Venture to purchase Equipment to be leased to others in the conduct of the business of the Joint Venture, to satisfy the liabilities and Obligations of the Joint Venture, and for such other uses, consistent with the purpose set forth in Section 2.5 hereof, as to which the Venturers shall agree. Neither Venturer shall be obligated to make additional contributions to the capital of the Joint Venture, but if an additional contribution is agreed to by the Venturers, each Venturer shall pay into the Joint Venture its Pro Rata Share of such contribution.
(c) Except as otherwise agreed by the Venturers, no portion of any capital contribution to the Joint Venture shall bear interest.
Section 3.2 Net Income or Net Loss . Net Income or Net Loss for each Fiscal Period of the Joint Venture shall be allocated to each Venturer in accordance with its respective Pro Rata Share. Every item of income, gain, loss, deduction, credit or tax preference entering into the computation of Net Income or Net Loss, or attributable to any Fiscal Period during which Net Income or Net Loss was realized, shall be allocated to each Venturer in the same proportion and at the same time as such Net Income or Net Loss is allocated to such Venturer.
Section 3.3 Distributions . The Net Cash Flow of the Joint Venture shall be distributed to the Venturers as received. Each Venturer shall receive in each such Distribution an amount equal to its Pro Rata Share of the total amount of such Distribution.
Section 3.4 Capital Accounts . A Capital Account shall be established and maintained for each Venturer. The Capital Account for each Venturer shall initially be credited with the amount of its initial contribution to the capital of the Joint Venture, and thereafter shall be increased by the amount of (i) any additional contributions to the capital of the Joint Venture made by such Venturer pursuant to Section 3.1(b) and (ii) any Net Income allocated to such Venturer pursuant to Section 3.2, and shall be decreased by the amount of (x) any Distribution to such Venturer made pursuant to Section 3.3 and (y) any Net Loss allocated to such Venturer pursuant to Section 3.2.
Section 3.5 Rights to Capital Accounts and Distributions . No Venturer shall have the right to demand the return of or to withdraw any portion of its contributions to the capital of the Joint Venture, except to the extent capital is required to be distributed pursuant to Section 3.3. No Venturer shall have any right to priority over the other Venturer as to any Distribution.
Section 3.6 Expenses . The Joint Venture shall pay (or shall reimburse a Venturer who shall have paid) all expenses incurred in connection with the organization, qualification and conduct of business of the Joint Venture, including without limitation the reasonable fees and expenses of legal counsel, accountants or others retained pursuant to Section 6.2, and shall reimburse each Venturer for the actual amount or fair market value of services and facilities contributed to the Joint Venture in connection with the maintenance of books and records of the Joint Venture or the furnishing of financial statements pursuant to Section 6.1 hereof, and the provision of office space, supplies and clerical and other services relating to the Joint Venture and its business.
Section 3.7 Advances . A Venturer may, with the consent of the other Venturer, make Advances from time to time to the Joint Venture on such terms and conditions as to which the Venturers may agree.
ARTICLE IV MANAGEMENT
Section 4.1 Business of the Joint Venture . Each Venturer shall have equal rights in the management and conduct of the business of the Joint Venture.
Section 4.2 Restrictions on Rights and Powers . Without the consent of both Venturers, neither Venturer shall have the right to:
(a)	Do any act in contravention of this Agreement;
(b)	Do any act that would make it impossible to carry on the ordinary business of the Joint Venture;
(c)	Confess judgment against the Joint Venture;
(d)	Possess Joint Venture property, or assign its interests or rights in specific Joint Venture property, for other than a Joint Venture purpose;
(e)	Borrow money or give any guaranty on behalf or in the name of the Joint Venture, or mortgage, pledge, grant a security interest in or otherwise encumber any property of the Joint Venture;
(f)	On behalf or in the name of the Joint Venture, make, execute, deliver, accept or endorse (except for collection) any promissory note or commercial paper belonging to the Joint Venture;
(g)	Assign, transfer, pledge, compromise or release any claim or debt due the Joint Venture, except upon payment in full thereof, or arbitrate or consent to the arbitration of any dispute or controversy to which the Joint Venture is a party or in which it has an interest;
(h)	On behalf or in the name of the Joint Venture, make, execute, or deliver any assignment for the benefit of creditors or any bond confession of judgment, warrant of attorney, power of attorney, indemnity bond or surety bond;
(i)	Cause the Joint Venture to do business in or otherwise become subject to the taxing powers of any jurisdiction other than the United States and Delaware;
(j)	Purchase, sell or lease or enter into any written or oral contract for the purchase, sale or lease of Equipment or other property;
(k)	On behalf or in the name of the Joint Venture, make any obligation or enter into any undertaking for the accommodation of any other Person, whether as endorser, surety, guarantor, or otherwise;
(l)	On behalf or in the name of the Joint Venture, enter into any contract, lease, agreement or undertaking; or
(m)	On behalf or in the name of the Joint Venture, employ any Person.
Section 4.3 Liability . No Venturer shall incur any liability for any mistake or error in judgment made in good faith and in the exercise of due care in connection with the conduct of the business of the Joint Venture, and no Venturer shall be deemed to have violated any of the provisions of the Agreement for any such mistake or error.
Section 4.4 Right to Admit Venturers . There shall be no right to admit additional Venturers to the Joint Venture.
Section 4.5 Indemnification by Venturer Acting Unilaterally . As provided in Sections 4.1 and 4.2 hereof, all contracts which inure to the benefit of, or impose obligations upon, the Joint Venture or either of the Venturers must be agreed to by both Venturers. Should either Venturer, through its unilateral action, without the consent of the other Venturer having been first obtained, cause the Joint Venture to become obligated or indebted for any amount whatsoever through contract, lease, sale, purchase or otherwise, said contracting Venturer agrees to indemnify and hold the other Venturer harmless for all losses, costs, expenses, and subsequent charges, costs, and liabilities incurred by the Joint Venture as a result of any such unilateral action by said Venturer which is binding upon the Joint Venture.
ARTICLE V, DISSOLUTION
Section 5.1 Events of Dissolution . The Joint Venture shall be dissolved if:
	(a) Proceedings in bankruptcy, or for the reorganization, of a Venturer, or for the adjustment of any or all of its debts, under the Federal Bankruptcy Code, or any part thereof, or under any other laws, whether state or Federal, for the relief of debtors, now or hereafter existing, shall be commenced by a Venturer, or shall be commenced against a Venturer and shall not be discharged within thirty (30) days of its commencement, or a receiver or trustee shall be appointed for-a Venturer or any part of its assets, or any proceeding shall be instituted for the dissolution or the full or partial liquidation of a Venturer, and such receiver or trustee shall not be discharged within thirty (30) days of his appointment, or such proceeding shall not be discharged within thirty (30) days of its commencement; or
	(b) The Venturers shall unanimously consent to dissolve the Joint Venture; or
	(c) All Equipment owned by the Joint Venture shall be sold, destroyed or otherwise disposed of.
Section 5.2 Liquidation . In the event that the Joint Venture shall be dissolved for any reason whatsoever (including, without limitation, termination of the Joint Venture pursuant to Section 2.4 hereof), a full and general accounting of its assets, liabilities and transactions shall be taken. The assets of the Joint Venture shall be sold and turned into cash as soon as possible and all debts and other amounts due the Joint Venture shall be collected. The proceeds thereof shall thereupon:
	(a) First, be applied to discharge the debts and liabilities of the Joint Venture (including all Advances not theretofore repaid) and the expenses of liquidation;
	(b) Second, be disbursed as a Distribution in liquidation to the Venturers, ratably in accordance with the respective amounts of their Capital Accounts, until such Capital Accounts have been reduced to zero or such proceeds fully disbursed; and
	(c) Third, be disbursed as a Distribution in liquidation to the Venturers in accordance with their respective Pro Rata Shares, until all such proceeds remaining are disbursed.
No Venturer shall have the right to demand or receive property in kind as part of its Distribution in liquidation of the Joint Venture, or to enjoy any right to priority over the other Venturer as to such Distribution.
ARTICLE VI MISCELLANEOUS SUBSTANTIVE PROVISIONS
Section 6.1 Books and Records; Financial Statements . Full and accurate books of account shall be maintained for the Joint Venture, showing the condition of the business and finances of the Joint Venture, and shall be kept at such place as the Venturers may from time to time designate. Each Venturer shall have access to such books of account and shall be entitled to examine them at any time during ordinary business hours. As soon as practicable after the close of each Fiscal Period, the independent public accountants retained by the Joint Venture pursuant to Section 6.2 shall prepare, in accordance with generally accepted accounting principles consistently applied to such Fiscal Period except as otherwise noted, financial statements setting forth the financial position of the Joint Venture as of the end of such Fiscal Period and the results of operations of the Joint Venture for such Fiscal Period. A true and complete copy of such financial statements, together with the report of the independent public accountants on the audit of such financial statements, shall be provided to each Venturer as soon as they are available. Such independent public accountants shall prepare the income tax returns applicable to the Joint Venture. Such tax returns shall be provided to the Ventures within 45 days before the same are required to be -filed without regard to applicable extensions, and the Venturers shall be entitled to give comments to the Joint Venture related to the preparation thereof until 15 days before such tax returns are required to be filed without regard to applicable extensions.
The Joint Venture books shall be kept on the cash basis for Federal income tax purposes and in accordance with generally accepted accounting principles for financial reporting.
Section 6.2 Agents . In connection with the Joint Venture's day to day activity, the Venturers shall have the power to employ investment counsel, brokers, accountants and attorneys to act in the Joint Venture's behalf, as may be deemed necessary, incidental or convenient to the proper administration of the Joint Venture property and business. The Joint Venture shall regularly retain independent public accountants, with a nationally recognized standing and reputation reasonably satisfactory to both Venturers, to audit and prepare the financial statements of the Joint Venture pursuant to Section 6.1.
Section 6.3 Checks and Notes . All checks, demands for money and notes of the Joint Venture shall be signed by such person or persons as the Venturers may from time to time designate.
Section 6.4 Conflicts of Interest . A Venturer may engage in or possess interests in other business ventures of any kind or description for its own account, including without limitation ventures engaged in the purchasing or leasing of Equipment. Neither the Joint Venturer nor the other Venturer shall have any rights by virtue of this Agreement in such independent business ventures or to the income or profits derived therefrom. The Joint Venture may acquire property or services from, and may enter into leases and other contracts with, Affiliated Persons.
Section 6.5 Use of Name . The name of the Joint Venture shall belong to and may be used by the Joint Venture, and shall not be sold or otherwise disposed of, so long as the Joint Venture shall continue in existence.
Section 6.6 Bank Accounts . The Joint Venture shall maintain a bank account or bank accounts in the Joint Venture's name in one or more national or state banks in the State of Delaware. Checks and drafts shall be drawn on the Joint Venture's bank accounts for the Joint Venture' s purposes only. Available funds of the Joint Venture may be invested for such time as they are not needed in the ordinary course of the business of the Joint Venture, in such investments as the Venturers shall designate.
ARTICLE VII MISCELLANEOUS PROCEDURAL PROVISIONS
Section 7.1 Notices . Any and all notices provided for herein shall be given in writing, by registered or certified mail, return receipt requested, addressed to each Venturer as follows:
(a)	if to BT Baltimore: 280 Park Avenue New York, New York 10017 Attention: Officer-in-Charge Lease Financing Group
(b)	if to Baltimore Capital: Gas and Electric Building Charles Center Baltimore, Maryland 21201 Attention: Secretary
A notice given hereunder shall be deemed to have been given on the date set forth on the return receipt as the date of receipt by the Venturer to whom such notice is given.
Section 7.2 Amendments and Modifications . This Agreement may be amended or modified only upon the execution by each Venturer of a writing setting forth such amendment or modification.
Section 7.3 Binding Effect; Assignment; Entire Agreement . This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assigns of the Venturers. No Venturer shall have the right to assign any of its rights or obligations under this Agreement, or its interest in the Joint Venture, except to a corporation that is an Affiliated Person as to such Venturer, or to any other Person upon the prior written consent of the other Venturer; provided, that (i) such assignment will not constitute a dissolution or a termination of the Joint Venture for Federal income tax purposes, or cause any portion of any investment tax credit or depreciation in respect of any Equipment to he recaptured or disallowed for Federal income tax purposes, and (ii) such Person may lawfully become a Venturer. No Person entitled to become a Venturer under this Section by virtue of an assignment shall become a Venturer until this Agreement, or a separate agreement by which such Person agrees to be bound by the terms of this Agreement, shall have been signed by such Person, and all registrations, filings and other acts required to record the assignment to such Person of an interest as a Venturer in the Joint Venture shall have been completed. This Agreement constitutes the entire agreement between the Venturers as to the subject matter hereof.
Section 7.4 Further Assurances . Each Venturer hereby agrees, for itself and its respective successors and assigns, to execute any and all instruments and to take any and all actions that are or may become necessary or proper to carry out the intent of this Agreement.
Section 7.5 Severability . If any provision of this Agreement shall be held invalid under any applicable Laws, such invalidity shall not affect any other provision of this Agreement that can be given effect without the invalid provision and, to this end, the provisions hereof are severable.
Section 7.6 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be taken to be an original, but all of which, together, shall be taken to be but one instrument.
Section 7.7 Waiver . No waiver of any provision of this Agreement shall be valid unless in writing and signed by the person or party against whom charged.
Section 7.8 Applicable Law . This Agreement shall be subject to and governed by the Laws of the State of Delaware and specifically the Delaware Uniform Partnership Law, without regard to the rules of conflicts of law.
Section 7.9 Effective Date . This Agreement shall be effective on the date it is executed by the Venturers. For convenience of reference, this Agreement is dated as of September 1, 1984 but the actual date of execution by the parties hereto is the date set forth opposite their signatures.
Section 7.10 Headings . Headings of the Articles and Sections of this Agreement have been included for convenience of reference only and shall not to any extent have the effect of modifying, amending or changing the express terms and provisions of this Agreement.
Section 7.11 Gender and Number . As used herein, unless the context clearly indicates the contrary, the singular number shall include the plural,' the plural the singular and the use of any gender shall be applicable to all genders.
IN WITNESS WHEREOF, the undersigned have executed this Joint Venture Agreement on the date set forth on the first page hereof.
Date: September 13, 1984		BT BALTIMORE, INC. By /s/ JAMES J. CONROY
Date: September 13, 1984		BALTIMORE CAPITAL RESOURCES, INC. By /s/

CERTIFICATE OF FORMATION OF PCI-BT INVESTING, L.L.C.
This Certificate of Formation of PCI-BT Investing, L.L.C. (the "LLC") dated as of January 12, 1998, is being duly executed and filed by PCI Air Management Corporation, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C. Section 18-101, et seq . FIRST: The name of the LLC formed hereby is: PCI-BT Investing, L.L.C. SECOND: The address of the registered office of the LLC in the State of Delaware is: 1013 Centre Road New Castle County Wilmington, Delaware 19805 THIRD: The name and address of the registered agent for service of process on the LLC in the State of Delaware are: Corporation Service Company 1013 Centre Road New Castle County Wilmington, Delaware 19805 IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be executed as of the date first above written.
	PCI AIR MANAGEMENT CORPORATION An Authorized person By: /s/ John D. McCallum Name: John D. McCallum Title: President

EXECUTION COPY
OPERATING AGREEMENT OF PCI-BT INVESTING, L.L.C.
TABLE OF CONTENTS
SECTION 1
	THE COMPANY
	1.1			Formation						1
	1.2			Name						1
	1.3			Purpose; Powers						2
	1.4			Principal Place of Business; Registered Office						3
	1.5			Term						3
	1.6			Filings; Agent for Service of Process						3
	1.7			Title to Property						4
	1.8			Payments of Individual Obligations						4
	1.9			Independent Activities; Transactions with Affiliates						4
	1.10			Definitions						5
SECTION 2
	MEMBERS' INTERESTS AND CAPITAL CONTRIBUTIONS									13
	2.1			Shares						13
	2.2			Contributions						13
SECTION 3
	DISTRIBUTIONS									14
	3.1			Priority						15
	3.2			Preferred Return on Class A Preferred Shares						15
	3.3			Distributions						16
	3.4			Special Payment						16
	3.5			Recapitalization						17
	3.6			Determination of Fair Market Value						18
	3.7			Distributions and Payments to Members						20
	3.8			Conversion of Class A Preferred Shares						21
	3.9			Cancellation of Recapitalized or Converted Class A Preferred Share						21
SECTION 4
	MANAGEMENT
	4.1			Managing Members						22
	4.2			Term						22
	4.3			Removal; Termination of Status						22
	4.4			Managing Members						23
	4.5			Managing Member Powers						24
	4.6			Duties and Obligations of the Managing Member						27
	4.7			Limitations						27
	4.8			Compensation; Expenses						28
	4.9			Indemnification of the Managing Member						28
	4.10			Managing Member's Liability						29
SECTION 5
	ROLE OF MEMBERS									30
	5.1			Rights or Powers						30
	5.2			Voting Rights						30
	5.3			Meetings and Consents of the Members						30
	5.4			Procedure for Consent						31
	5.5			Members' Liability						31
	5.6			Partition						32
	5.7			Transactions Between a Member or Managing Member and the Company						32
	5.8			Other Instruments						32
	5.9			Withdrawal						32
SECTION 6
	REPRESENTATIONS AND WARRANTIES									33
	6.1			In General						33
	6.2			Representations and Warranties						33
	6.3			Subsidiary Representation						36
SECTION 7
	ACCOUNTING, BOOKS AND RECORDS									36
	7.1			Accounting Books and Records						36
	7.2			Reports						38
SECTION 8
	AMENDMENTS									38
	8.1			Amendments						38
SECTION 9
	TRANSFERS									39
	9.1			Transfer of Shares						39
	9.2			Legend						39
	9.3			Notice of Proposed Transfer						40
	9.4			Non-Applicability of Restrictions on Transfer						41
	9.5			Admission of Members						41
	9.6			Effect of Transfer on Company						42
	9.7			Five Members						42
SECTION 10
	POWER OF ATTORNEY									43
	10.1			Managing Member as Attorney-In-Fact						43
	10.2			Nature of Special Power						44
SECTION 11
	DISSOLUTION AND WINDING UP									44
	11.1			Dissolution Events						44
	11.2			Winding Up						45
	11.3			Rights of Members						46
	11.4			Notice of Dissolution/Termination						46
	11.5			The Liquidation						46
	11.6			Form of Liquidating Distributions						47
SECTION 12
	MISCELLANEOUS									47
	12.1			Notices						47
	12.2			Binding Effect						48
	12.3			Certificates for Shares						48
	12.4			Lost Certificates						48
	12.5			Construction						48
	12.6			Time						49
	12.7			Headings						49
	12.8			Severability						49
	12.9			Incorporation by Reference						49
	12.10			Variation of Terms						49
	12.11			Governing Law						49
	12.12			Waiver of Jury Trial						50
	12.13			Counterpart Execution						50
	12.14			Specific Performance						50
	12.15			Engagement in Bank Eligible Activities and Investment in Bank Eligible Assets						50
	12.16			No Material Impairment						51
	12.17			Jurisdiction; Service of Process						51
EXHIBITS
Exhibit A					-		Form of London Branch Contribution Agreement
Exhibit B					-		Form of Promissory Note
Exhibit C					-		Form of PCI Note
Exhibit D					-		Form of Recapitalization Note
Exhibit E					-		Addresses of Members and Holders of Debt Securities for Notice Purposes
Exhibit F					-		Schedule Values for Leased Equipment
Exhibit G					-		Transferee Certificate
EXECUTION COPY
OPERATING AGREEMENT OF PCI-BT INVESTING, L.L.C.
This OPERATING AGREEMENT is entered into and shall be effective as of the 12th day of January, 1998, by and among the Persons who are identified as Members in Section 2.2 hereof and who have executed a counterpart of this Agreement as Members pursuant to the provisions of the Act, on the following terms and conditions:
SECTION 1 THE COMPANY
1.1 Formation. The Members hereby agree to form the Company as a limited liability company under and pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. The fact that the Certificate is on file in the office of the Secretary of State, State of Delaware, shall constitute notice that the Company is a limited liability company. Simultaneously with the execution of this Agreement and the formation of the Company, each of the Members shall be admitted as members of the Company. The rights and liabilities of the Members shall be as provided under the Act, the Certificate, and this Operating Agreement. The Members intend that the Company be taxed as an association taxable as a corporation for federal income tax purposes, and the Company shall file Form 8832 evidencing such intent within 75 days from the date the Certificate was filed with the Secretary of State, State of Delaware. 1.2 Name. The name of the Company shall be PCI-BT Investing, L.L.C. and all business of the Company shall be conducted in such name. The Managing Member may change the name of the Company upon ten (10) Business Days notice to the Members. 1.3 Purpose; Powers. (a) The purposes of the Company are to:
			(i) Acquire the cash contributed to the Company by the Members pursuant to Section 2.2 hereof, (ii) Acquire the London Branch Residual Interests contributed to the Company by London Branch pursuant to Section 2.2 hereof and the London Branch Contribution Agreement; (iii) Issue to London Branch the Debt Securities of the Company; (iv) Make Permitted Investments; (v) Execute and perform the REMIC Administration Agreement, the Aircraft Interest Purchase Agreement, and the Assignment and Assumption Agreement; (vi) Perform such other activities as are specifically provided in this Operating Agreement; and (vii) Engage in any activity and exercise any powers permitted to limited liability companies under the laws of the State of Delaware which are necessary or incidental to the foregoing, provided that any asset acquired, investment made or activity engaged in by the Company shall be Bank Eligible, and the Members hereby acknowledge that each of the Permitted Investments and each of the activities set forth in this Section 1.3(a) is Bank Eligible.
(b) In no event shall the Company accept demand deposits, including, without limitation, demand deposits that the depositor may withdraw by check or similar means for payment to third parties. (c) The Company has the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to and in furtherance of the purposes of the Company set forth in this Section 1.3 and has, without limitation, any and all powers that may be exercised on behalf of the Company by the Managing Member pursuant to Section 4 hereof. 1.4 Principal Place of Business; Registered Office. The principal place of business of the Company shall be at .1575 Delucchi Lane, Suite 115, Reno, Nevada 89502. The Managing Member may change the principal place of business of the Company to any other place within or without the State of Nevada with notice to the Members. The registered office of the Company in the State of Delaware is initially located at Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805. 1.5 Term The term of the Company shall commence on the date hereof, also being the date the Certificate is filed in the office of the Secretary of State of the State of Delaware in accordance with the Act. The Members-intend that the existence of the Company shall continue until the dissolution and the completion of the winding up of the Company and its business is completed following a Dissolution Event, as provided in Section 11 hereof. Prior to the time that the Certificate is filed, no Person shall represent to third parties the existence of the Company or hold itself out as a Member or Managing Member. 1.6 Filings; Agent for Service of Process. (a) The Managing Member is hereby authorized to and shall execute and cause the Certificate to be filed in the office of the Secretary of State of the State of Delaware as an authorized person within the meaning of the Act. The Managing Member shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware, including the preparation and filing of such amendments to the Certificate and such other assumed name certificates, documents, instruments, and publications as may be required by law, including, without limitation, action to reflect:
			(i) A change in the Company name; or (ii) A correction of false or erroneous statements in the Certificate or the desire of the Managing Member to make a change in any statement therein in order that it shall accurately represent the agreement among the Members.
(b) The Managing Member shall execute and cause to be filed original or amended certificates and shall 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 or similar type of entity under the laws of any other jurisdictions in which the Company engages in business. (c) The registered agent for service of process on the Company in the State of Delaware shall be the Corporation Service Company or any successor as appointed by the Members. (d) Upon the dissolution and completion of the winding up of the Company in accordance with Section 11, the Liquidator, as an authorized person within the meaning of the Act, shall promptly execute and cause to be filed a Certificate of Cancellation in accordance with the Act and the laws of any other jurisdictions in which the Liquidator deems such filing necessary or advisable. 1. 7 Title to Property All Property owned by the Company shall be owned by the Company as an entity and no Member shall have any ownership interest in such Property in its individual name, and each Member's interest in the Company shall be personal property for all purposes. At all times after the Effective Date, the Company shall hold title to all of its Property in the name of the Company and not in the name of any Member. 1.8 Payments of Individual Obligations. The Company's credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be transferred or encumbered for, or in payment of, any individual obligation of any Member. 1.9 Independent Activities; Transactions with Affiliates. (a) The Managing Member shall be required to devote such time to the affairs of the Company as may be necessary to manage and operate the Company and its subsidiaries, and shall be free to serve any other Person or enterprise in any capacity that such Managing Member may deem appropriate in his, her or its discretion. (b) Insofar as permitted by applicable law, neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Member or its Affiliates from engaging in whatever activities they choose, whether the same are competitive with the Company or otherwise, and any such activities may be undertaken without having or incurring any obligation to offer any interest in such activities to the Company or any Member, or require any Member to permit the Company or any other Member or its Affiliates to participate in any such activities, and as a material part of the consideration for the execution of this Agreement by each Member, each Member hereby waives, relinquishes, and renounces any such right or claim of participation. (c) To the extent permitted by applicable law and subject to the provisions of this Agreement, in furtherance of the purposes of the Company set forth in Section 1.3, the Managing Member is hereby authorized to cause the Company to purchase property (other than real property) from, sell such property to, or otherwise deal with any Member, acting on its own behalf, or any Affiliate of any Member, provided that any such purchase, sale, or other transaction shall be made on terms and conditions which are no less favorable to the Company than if the sale, purchase, or other transaction had been made with an independent third party. (d) The Members hereby agree that the transactions evidenced by the REMIC Administration Agreement, the Aircraft Interest Purchase Agreement, the Assignment and Assumption Agreement, the London Branch Contribution Agreement, any Permitted Investments, the Debt Securities, and any Recapitalization Note satisfy the standard set forth in Section 1.9(c) hereof and specifically authorize the Managing Member to enter into said agreements, all without any further action, consent, or approval of any other Person. (e) Each Member and any Affiliate thereof may also lend money to, borrow money from, act as a surety, guarantor or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, and transact other business with the Company and, subject to other applicable law, has the same rights and obligations with respect thereto as a Person who is not a Member. If a Member or any Affiliate thereof is a lender, in exercising its rights as a lender, including making its decision on whether to foreclose on Property of the Company, such lender will have no duty to consider (i) its status as a Member, Managing Member, or an Affiliate of a Member or Managing Member, (ii) the interests of the Company, or (iii) any duty it may have to the Company or any other Person. 1.10 Definitions. Capitalized words and phrases used in this Agreement have the following meanings: "Accrual Period" means the applicable period from a Start Date up to the first Start Date to occur thereafter, provided, that the first Accrual Period for any Class A Preferred Share shall mean the period commencing on the date of the original issuance of such Share up to the first Start Date to occur thereafter. "Act" means the Delaware Limited Liability Company Act, 6 Del. C. 118-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law). "Affiliate" means, with respect to any Person (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any officer, director, manager, general partner, managing member, or trustee of such Person, or (iii) any Person who is an officer, director, manager, general partner, managing member, or trustee of any Person described in clauses (i) or (ii) of this sentence. For purposes of this definition, the terms "controlling," "controlled by," or "under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. "Agreement" or "Operating Agreement" means this Operating Agreement of PCI-BT Investing, L.L.C., as amended from time to time, and which shall constitute the limited liability company agreement of the Company for all purposes of the Act. Words such as "herein," "hereinafter," "hereof," "hereto," and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires. "Aircraft Interest Purchase Agreement" means the Aircraft Interest Purchase Agreement of even date herewith between BTNY and the Company. "American Energy" means American Energy Corporation, a Delaware corporation. "Assignment and Assumption Agreement" means the Assignment and Assumption Agreement of even date herewith between BTNY and the Company. "Bank Eligible" means, in respect of any asset or activity, that such asset is eligible for acquisition by, or such activity may be engaged in, by BTCo at a location where BTCo is authorized to maintain such asset or engage in such activity under applicable law, including without limitation: (i) the banking laws of the State of New York, (ii) the Federal Reserve Act, as amended, 12 USC Section 221, et seq., (iii) the Bank Holding Company Act of 1956, as amended, 12 USC Section 1941, et seq., and (iv) the Federal Deposit Insurance Act, as amended, 12 USC Section 1811, et seq. "Bankruptcy" means, with respect to any Person, a "Voluntary Bankruptcy" or an "Involuntary Bankruptcy. " A "Voluntary Bankruptcy" means, with respect to any Person (i) the inability of such Person generally to pay its debts as such debts become due, or an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors, (ii) the filing of any petition or answer by such Person seeking to adjudicate itself as bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian, or other similar official for such Person or for any substantial part of its property or (iii) corporate action taken by such Person to authorize any of the actions set forth above. An "Involuntary Bankruptcy" means, with respect to any Person, without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or other similar relief under any present or future bankruptcy, insolvency, or similar statute, law, or regulation, or the filing of any such petition against such Person which petition shall not be dismissed within ninety (90) days, or without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver, or liquidator of such Person or of all or any substantial part of the property of such Person which order shall not be dismissed within ninety (90) days. The foregoing is intended to supersede and replace the events listed in Sections 18-304(a) and (b) of the Act. "Beneficial Interest" means the beneficial interest in the Trust acquired from BTNY by the Company pursuant to the Aircraft Interest Purchase Agreement. "BTCo" means Bankers Trust Company, a New York banking corporation organized under the banking laws of the State of New York. "BT Florida" means BT Florida, Inc., a Delaware corporation, and a wholly owned subsidiary of BTCo. "BTNY" means Bankers Trust New York Corporation, a New York corporation. "Business Day" means a day of the year on which banks are not required or authorized to close in New York, New York. "Certificate" means the certificate of formation filed with the Secretary of State of the State of Delaware pursuant to the Act to form the Company, as originally executed and as amended, modified, supplemented, or restated from time to time, as the context requires. "Certificate of Cancellation" means a certificate filed in accordance with 6 Del. C.Section 18-203. "Class A Preferred Shares means the class of Shares described in Section 2. 1 (a) (i). "Class B Preferred Shares shall have the meaning provided in Section 3.4. "Code" means the Internal Revenue Code of 1986, as amended. "Common Shares" means the class of Shares described in Section 2.1(a)(ii). "Company" means the limited liability company formed pursuant to this Agreement and the Certificate. "Consolidated Retained Earnings" means-as of any date, the retained earnings of the Company as of such date determined (i) on a consolidated basis taking into account the results of only the Company and any of its subsidiaries and (ii) under generally accepted accounting principles, consistently applied. "Debt" means (i) any indebtedness for borrowed money or the deferred purchase price of property as evidenced by a note, bonds, or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien, or charge of any kind existing on any asset owned or held by the Company whether or not the Company has assumed or become liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement, (v) accounts payable, and (vi) obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii), (iv), and (v), above, provided that Debt shall not include obligations in respect of any accounts payable that are incurred in the ordinary course of the Company's business and are not delinquent or are being contested in good faith by appropriate proceedings. "Debt Securities" means the note issued by the Company to London Branch in the form attached hereto as Exhibit B. Dissolution Event" shall have the meaning provided in Section 11.1. "Effective Date" means the date first set forth above. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "First Appraiser" shall have the meaning provided in Section 3.6(b). "Involuntary Bankruptcy" shall have the meaning set forth in the definition of Bankruptcy. "Leased Equipment" means the assets held by the Trust at the time of the purchase of the Beneficial Interest by the Company pursuant to the Aircraft Interest Purchase Agreement. "Leased Equipment Profit or Loss" means (i) on any given date on which the Company owns the Beneficial Interest or the Leased Equipment, an amount equal to the fair market value on such date of the Leased Equipment minus the Schedule Value, as shown on Exhibit F, for such date, and (ii) on any given date on which the Company does not own the Beneficial Interest or the Leased Equipment, the amount realized by the Company on the disposition of the Beneficial Interest or the Leased Equipment minus the Schedule Value, as shown on Exhibit F, for the date of such disposition. "Liquidation Preference" means, for each Class A Preferred Share on any given date, the Preferred Return Base as of such date increased (if positive) or decreased (if negative) by 0.000211 percent (0.000211%) of the Leased Equipment Profit or Loss as of such date, provided, however; that the amount by which the Preferred Return Base is increased or decreased shall not exceed $16.59. "Liquidator" shall have the meaning provided in Section 11.5(a) hereof. "London Branch" means BTCo acting through its branch office in London, England. "London Branch Contribution Agreement" means the Contribution Agreement of even date herewith in the form attached hereto as Exhibit A pursuant to which London Branch is making certain contributions to the Company. "London Branch Residual interests" means the REMIC residual interests contributed to the Company by London Branch pursuant to the London Branch Contribution Agreement. "Managing Member" shall have the meaning provided in Section 4.1(a) hereof. "Member" means any Person (i) who is referred to as such in Section 2.2 to this Agreement, or who has become a Member pursuant to the terms of this Agreement and (ii) who has not ceased to be a Member. "Members" means all such Persons. "Moody's" means Moody's Investors Services, Inc. "Net Tax Payment" means, as of any day, the excess, if any, of Tax Payments made on or after January 12, 1998 and on or before such day over Tax Receipts received on or after January 12, 1998 and on or before such day. "Non preference Distributions" shall have the meaning provided in Section 3.3(b). "Officers" shall have the meaning provided in Section 4.4(e). "Payment Date" shall have the meaning provided in Section 3.3(a). "PCI" means Potomac Capital Investment Corporation, a Delaware corporation. "PCI Air" means PCI Air Management Corporation, a Nevada corporation. "PCI Note" shall have the meaning provided in clause (i) of the definition of "Permitted Investments." "Permitted Investments" means:
		(i) A debt obligation ("PCI Note") of PCI or a direct or indirect wholly owned subsidiary of PCI fully and unconditionally guaranteed by PCI that (x) provides for interest-only payments at an interest rate equal to PCI's then current borrowing rate for equivalent maturity securities, (y) is either a demand obligation or has a maturity no later than January 12, 2003, and (z) is substantially in the form of the PCI Note attached hereto as Exhibit C, provided that PCI's senior unsecured debt is rated at least Baa3 by Moody's or BBB- by S&P on the date such obligation is acquired by the Company; (ii) A debt obligation of any issuer other than PCI or its Affiliates rated at least Baa3 by Moody's or BBB- by S&P with a maturity no later than January 12, 2003; (iii) The London Branch Residual Interests; (iv) The Beneficial Interest; (v) REMIC residual interests that are similar in form and substance to the London Branch Residual Interests; (vi) Temporary Investments; (vii) Property of a type similar to the Leased Equipment which is held directly or through an owner trust similar to the Trust and which. is acquired from the proceeds of the disposition of the Leased Equipment or the Beneficial Interest; and (viii) Office equipment and supplies and such other personal property as may be reasonably required to maintain an office for and conduct the operations of the Company.
"Person" means any individual, partnership (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity. "Potomac Nevada" means Potomac Nevada Corporation, a Nevada corporation. "Preferred Return" and "Preferred Return Rate" shall have the meanings provided in Section 3.2(a). "Preferred Return Base" means, for each Class A Preferred Share on any given date, $79 plus the amount of any Undistributed Preferred Return for such Share as of such date. "Property" means all property acquired by the Company, including cash, and any improvements thereto, and shall include both tangible and intangible property. "Quarterly Start Date" means any of March 31, June 30, September 30, and December 31. "Recapitalization" shall have the meaning provided in Section 3.5(a). "Recapitalization Date" shall have the meaning provided in Section 3.5(b). "Recapitalization Notes" shall have the meaning provided in Section 3.5(a). "REMIC" means a real estate mortgage investment conduit within the meaning of Section 860D of the Code. "REMIC Administration Agreement" means the letter agreement of even date herewith between the Company and BTCo relating to the administration of the London Branch Residual Interests. "Second Appraiser" shall have the meaning provided in Section 3.6(b). "Securities Act" means the Securities Act of 1933, as amended. "Selecting Member" means, on any date, any Member that is a holder or an Affiliate of a holder of Debt Securities. "Selecting Members" means all such Members. "S&P" means Standard & Poor's Corporation. "Share" or "Shares" refers to the Shares representing the Members' limited liability company interests in the Company as provided for in this Agreement, including any interests issued pursuant to Section 3.4 hereof, plus any additional limited liability company interests in the Company authorized by the Company in an amendment to this Agreement, and any and all benefits to which the holder of such interests may be entitled as provided in this Agreement, together with all obligations of such holder to comply with the terms and provisions of this Agreement. "Special Payment Amount" shall have the meaning provided in Section 3.4. "Special Payment Date" means January 12, 2002, or if such day is not a Business Day, the first Business Day thereafter. "Start Date" means any Quarterly Start Date, any Payment Date, the Special Payment Date, and the Recapitalization Date; "Tax Payments" means the amount of any federal, state, and local income taxes (including, without limitation, payments of estimated taxes) paid by the Company, including (without limitation) payments made directly or indirectly to a taxing authority and payments made to an Affiliate under a tax sharing agreement, increased by the amount of liabilities for such taxes or for tax sharing payments taken into account under clause (vii)(B)(x) of Section 3.6(a) on the date on which the determination of the amount of Tax Payments is relevant. "Tax Receipts" means the amounts refunded or otherwise paid to the Company with respect to federal, state, and local income taxes, including (without limitation) payments made to the Company directly or indirectly by a taxing authority and payments made to the Company by an Affiliate under a tax sharing agreement, increased by the amount of any asset reflecting a receivable for such tax refunds or tax sharing payments taken into account under clause (vii)(A) of Section 3.6(a) on the date on which the determination of the amount of Tax Receipts is relevant. "Temporary Investments" means all cash or cash equivalents including, without limitation, cash on deposit in financial institutions, certificates of deposit, commercial paper treasury bills and other high quality short-term debt obligations rated at least A-1 by S&P and P-1 by Moody's and having a maximum maturity of one year or less together with money market mutual funds the assets of which consist solely of such instruments. "Third Appraiser" shall have the meaning provided in Section 3.6(b). "Trust" means the trust created under the Trust Agreement dated as of December 31, 1997 between BTNY and First Security Bank, National Association. "Undistributed Preferred Return" means, for each Class A Preferred Share on any given date, the excess of the cumulative accrued Preferred Return with respect to such Share through the day before such date over the cumulative distributions of Preferred Return pursuant to Section 3.3 or Section 3.4 with respect to such Share through such date (or, if such date is not a Business Day, through the next Business Day thereafter). "Voluntary Bankruptcy" shall have the meaning set forth in the definition of "Bankruptcy."
SECTION 2 MEMBERS' INTERESTS AND CAPITAL CONTRIBUTIONS
2.1 Shares. (a) Interests in the Company shall be evidenced by Shares, of which there shall initially be only two classes, each of which shall have the rights and preferences specified in this Agreement as attaching to such class.
			(i) Class A Preferred. The total number of Class A Preferred Shares that may be issued by the Company is 93,558.10. All of the Class A Preferred Shares shall be issued and outstanding on the Effective Date. (ii) Common. The total number of Common Shares that may be issued by the Company is 500,000, of which 280,674.25 shall be issued and outstanding on the Effective Date. Additional Common Shares may only be issued in connection with a conversion of Class A Preferred Shares pursuant to Section 3.8.
(b) The Company has the power to issue a third class of Shares (the Class B Preferred Shares) as described in Section 3.4 hereof, which shall have the rights and preferences established by the terms thereof and as specified in this Agreement as attaching to such class. (c) The Company covenants that the Class A Preferred Shares and the Common Shares to be issued in connection with the contributions of the Members described in Section 2.2 hereof shall be duly and validly issued and fully paid and non assessable and free from all taxes, liens, and charges arising out of or by reason of the issue thereof. 2.2 Contributions. On the Effective Date, the Members shall make the following contributions and the name and address of, and the class and number of Shares and amount of Debt Securities held by, each of the Members shall be as follows:
Member's Name and Address								Contribution	Number and Class of Shares
Potomac Capital Investment Corporation 1801 K Street, N.W. Suite 900 Washington, D.C. 20006								$11,725,934 in cash	24,948.76 Class A Preferred Shares and 92,310.58 Common Shares
American Energy Corporation 1801 K Street, N.W. Suite 900 Washington, D.C. 20006								$11,725,944 in cash	24,948.86 Class A Preferred Shares and 92,310.58 Common Shares
Potomac Nevada Corporation 1575 Delucchi Lane Suite 115 Reno, Nevada 89502								$11,725,944 in cash	24,948.86 Class A Preferred Shares and 92,310.58 Common Shares
PCI Air Management 575 Delucchi Lane Suite 115 Reno, Nevada 89502								$374,251 in cash	3,742.51 Common Corporation Shares
Bankers Trust Company 1 Appold Street, Broadgate London EC2A 2HE, England								$3,413,083 in cash and 18,711.62 Class A $100,000 of London Branch Residual Interests	18,711.62 Class A Preferred Shares (representing an equity contribution of $1,871,162) and Debt Securities having a fair market value of $1,641,921
SECTION 3 DISTRIBUTIONS
In addition to the other rights granted under this Agreement, including without limitation, Sections 5.2 and 11.2 hereof, the rights and preferences of the Shares shall be as set forth below: 3.1 Priority. (a) Class B Preferred Shares. With respect to distributions with respect to the Shares, including the distribution of the assets of the Company upon dissolution, the Class B Preferred Shares, if any are issued, shall be senior to the Class A Preferred Shares and the Common Shares. (b) Class A Preferred Shares. With respect to distributions with respect to the Shares, including the distribution of the assets of the Company upon dissolution, the Class A Preferred Shares shall be (i) junior to the Class B Preferred Shares, if any are issued and (ii) senior to all other classes and series of Shares of the Company, whether such classes and series are now existing or are created in the future, to the extent, in the case of distributions other than upon dissolution, of the aggregate Undistributed Preferred Return on such Shares and to the extent, in the case of distributions in dissolution, of the aggregate of the Liquidation Preferences of such Shares. (c) Common Shares. Except as otherwise expressly provided in this Operating Agreement, all outstanding Common Shares shall be identical and shall entitle the holders thereof to the same rights and privileges. When, as and if distributions are declared by the Managing Member on outstanding Common Shares, whether payable in cash or property or in securities of the Company, the Common Shares shall be entitled to share equally, Share for Share, in such distributions. 3.2 Preferred Return on Class A Preferred Shares. (a) Preferred Return. From the date of issuance, preferred rights to distributions (the "Preferred Return'") shall accrue from time-to-time on the Preferred Return Base of each Class A Preferred Share at an annual rate (the "Preferred Return Rate") which shall, except as otherwise provided in Section 3.2(c), equal six percent (6%). (b) Accrual and Payment Commencing on the date of original issuance of a Class A Preferred Share, Preferred Return on such Class A Preferred Share shall accrue for each Accrual Period on the last day of such Accrual Period, and shall be cumulative. All accruals of Preferred Return shall be computed at the Preferred Return Rate per annum based on a 360-day year of twelve 30-day months. (c) Failure to Make Distributions. In the event that, on two consecutive Quarterly Start Dates (or, if such day is not a Business Day, on the first Business Day thereafter), the Managing Member fails to make distributions in an amount at least equal to the lesser of Consolidated Retained Earnings and the Undistributed Preferred Return on such first day, then as of such date, and until such failure is cured, the Preferred Return Rate shall be seven and one-quarter percent (7.25%). 3.3 Distributions. (a) Except as otherwise provided in Section 3.4, distributions shall be made in cash, at such times and in such amounts as the Managing Member declares and determines, to the holders of record as they appear on the books of the Company on such record date, not exceeding five (5) days preceding the date of the distribution (a "Payment Date"), as may be determined by the Managing Member in advance of the payment of the particular distribution. The Members intend that the Managing Member will make a good faith effort to distribute the Company's excess cash flow as determined by the Managing Member from time-to-time. (b) Except to the extent that the Company issues Shares in accordance with Section 3.4, all distributions shall be applied first to satisfy any Undistributed Preferred Return. The Common Shares shall be entitled to share equally, Share for Share alike, in 93.457943% (or such other percentage as may be determined in accordance with Section 3.8) of any distributions ("Nonpreference Distributions") of amounts in excess of that required to satisfy the rights of the Class B Preferred, if any, and any Undistributed Preferred Return, and the Class A Preferred Shares shall be entitled to share equally, Share for Share alike, in 6.542057% (or such other percentage as may be determined in accordance with Section 3.8) of any Nonpreference Distributions, provided that after the Recapitalization Date, the Common Shares shall be entitled to share equally, Share for Share alike, in 100% of all Nonpreference Distributions. (c) Except as otherwise provided in Section 3.4, no distributions shall be made under this Section 3 in an amount in excess of the Consolidated Retained Earnings on the date of such distribution. 3.4 Special Payment On the Special Payment Date, the Managing Member shall make a distribution to the Members, in accordance with Section 3.3, in an amount (the "Special Payment Amount") equal to the excess of the net fair market value of the Company over $43,065,156. At the option of each Member, the Managing Member shall satisfy the Special Payment Amount with respect to such Member in cash or by the issuance of preferred interests in the Company ("Class B Preferred Shares"), the terms of which shall be consistent with Section 3.1 (a) hereof and otherwise commercially reasonable as determined in good faith by the Managing Member at such time, provided, however, that the liquidation preference of a Class B Preferred Share on the date of issuance shall not exceed the portion of the Special Payment Amount satisfied by the receipt of such Share. 3.5 Recapitalization. (a) Recapitalization Option.
			(i) On or after January 12, 2003, at the option of the Managing Member or any Member holding Class A Preferred Shares, the Company shall be recapitalized (the "Recapitalization") by an exchange of all of the Class A Preferred Shares and all of the Debt Securities then outstanding for notes (the "Recapitalization Notes") (the form of which is attached hereto as Exhibit D). The exchange shall be made such that each holder of Class A Preferred Shares and/or Debt Securities receives one or more Recapitalization Notes having an aggregate fair market value on the date of the exchange equal to the aggregate fair market value on the date of the exchange of the Class A Preferred Shares and/or Debt Securities surrendered by such holder. (ii) At the request of any Member holding Class A Preferred Shares, the Company may issue multiple notes, each with a denomination of two hundred fifty thousand dollars ($250,000) or more, to such Member, provided that if compliance with all requests from Selecting Members to receive multiple Recapitalization Notes would result in the issuance of more than ten (10) Recapitalization Notes in the aggregate to Selecting Members, then the Company may treat all such requests as withdrawn, and provided further that all costs, fees, and expenses of any paying agent shall be borne jointly and severally by the Member or Members that received multiple Recapitalization Notes. In the event that the Company issues more than one Recapitalization Note to any Member, then the Company shall appoint a paying agent, which shall be a bank or trust company selected by a majority vote of the Selecting Members that received multiple Recapitalization Notes, provided that such paying agent shall be reasonably acceptable to the Managing Member. The Members holding Class A Preferred Shares and the Managing Member agree that Wilmington Trust Company shall be considered a reasonably acceptable paying agent for this purpose. (iii) The recapitalization rights provided in this Section 3.5 are important to each of the Members herein, and in particular, (A) with respect to PCI, American Energy, Potomac Nevada and PCI Air, such rights provide the ability, after an initial period, to remove Members having a minority interest in the Company, to limit any further capital appreciation to such Members, and/or to remove the prohibition on investing in assets that are not Bank Eligible and (B) with respect to London Branch, such rights provide the ability, after an initial period, to obtain a stable return on its invested assets.
(b) Recapitalization Procedures. The Recapitalization shall occur on the date ("Recapitalization Date') selected by the Person exercising the option described in Section 3.5(a). A Member-exercising the option described in Section 3.5(a) shall give notice ("Member Notice") of such exercise at least forty (40) days prior to the proposed Recapitalization Date, by registered mail (return receipt requested), postage prepaid, to the Managing Member. The Managing Member shall give notice of its own exercise of the option described in Section 3.5(a) or of any Member Notice at least thirty (30) days prior to the proposed Recapitalization Date, by registered mail (return receipt requested), postage prepaid, to each holder of Class A Preferred Shares and each holder of Debt Securities as they appear on the books of the Company on such record date, not exceeding sixty (60) days preceding the proposed Recapitalization Date, as may be determined by the Managing Member. Such notice shall be addressed to the holders of Class A Preferred Shares and the holders of Debt Securities at the addresses as they appear on Exhibit E attached hereto, as the same shall be amended, and shall identify the Recapitalization Date. (c) Effect of Notice. Notice having been mailed as provided in Section 3.5(b), from and after the close of business on the Recapitalization Date (unless default shall be made by the Company in issuance of the Recapitalization Notes), the Class A Preferred Shares and the Debt Securities to be recapitalized shall no longer be deemed to be outstanding, all rights of the holders with respect to Class A Preferred Shares (including any right to receive payments under Section 18-604 of the Act, but excluding the right to receive from the Company the Recapitalization Notes) and all rights of holders with respect to Debt Securities (excluding the right to receive from the Company the Recapitalization Notes) shall cease. Upon surrender in accordance with said notice of (i) the certificates representing the Class A Preferred Shares (properly endorsed or assigned for transfer, if required by the Managing Member and the notice of Recapitalization so states) and (ii) the Debt Securities, such Shares and Debt Securities shall be exchanged by the Company for the Recapitalization Notes provided for herein. The Class A Preferred shares and Debt Securities so recapitalized shall, upon such Recapitalization, be canceled and thereafter shall not be reissued. Any Member all of whose Shares have been exchanged pursuant to this Section 3.5 shall be deemed to have withdrawn from the Company, which withdrawal is hereby consented to by all of the Members. (d) Effect of Recapitalization on Company. Notwithstanding the withdrawal of a Member following the Recapitalization of its Class A Preferred Shares, the Members agree that in furtherance of Section 1.5 of this Agreement, the Company shall continue and be continued after the Recapitalization Date. 3.6 Determination of Fair Market Value. (a) Fair Market Value. For purposes of this Agreement:
			(i) The fair market value of a Recapitalization Note on the Recapitalization Date shall be the principal amount of such note; (ii) The fair market value of each Class A Preferred Share on any date shall be a proportionate amount of the fair market value of such Shares in the aggregate and the fair market value of the Class A Preferred Shares in the aggregate on such date shall be an amount equal to the aggregate of the Liquidation Preferences of all such Shares outstanding on such date plus 6.542057% (or such other percentage as may be determined in accordance with Section 3.8) of the excess of (i) the net fair market value of the Company on such date over (ii) the aggregate of the Liquidation Preferences of all of the Class A Preferred Shares outstanding on such date; (iii) The fair market value of each Common Share on any date shall be a proportionate amount of the fair market value of such Shares in the aggregate and the fair market value of the Common Shares in the aggregate on such date shall be an amount equal to the excess of (i) the net fair market value of the Company on such date over (ii) the fair market value of the Class A Preferred Shares in the aggregate on such date; (iv) The fair market value, as of any day, of the Debt Securities, the Leased Equipment, and any asset described in clause (v) or clause (vii) of the definition of Permitted Investments shall be determined in accordance with the appraisal process set forth in Section 3.6(b) below; (v) The fair market value of the London Branch Residual Interests as of any day shall be an amount equal to (A) $100,000, minus (B) an amount equal to the accumulated amortization through such day on $100,000 amortized on a straight line basis over a 20 year period beginning on January 12, 1998, plus (C) an amount equal to the excess, if any, of the amount of the Net Tax Payment as of such day over the amount of what would have been the Net Tax Payment as of such day if the London Branch Residual Interests had not produced any phantom income or phantom deductions while held by the Company; (vi) The fair market value of any other asset held by the Company shall be as determined by the Managing Member, provided that any Member may request that the fair market value of any such asset be determined in accordance with the appraisal process set forth in Section 3.6(b) below; (vii) The net fair market value ("net fair market value') of the Company as of any day shall mean an amount equal to (A) the sum of the fair market values of all of the assets held by the Company on such day, determined in accordance with this Section 3.6(a), minus (B) the sum of (x) the aggregate liabilities of the Company as of such day (the amount of the liability for the Debt Securities being its fair market value on such day), and(y)the aggregate liquidation preference of the Class B Preferred Shares, if any, outstanding as of the beginning of such day.
(b) Appraisal. In the event that an appraisal is necessary to determine the fair market value of any asset held by the Company and/or the fair market value of the Debt Securities on any day, the Managing Member shall appoint an appraiser (the "First Appraiser") and, within fifteen (15) Business Days of receiving notice designating the First Appraiser, the Selecting Members shall, by majority vote of the Shares held by the Selecting Members, appoint a second appraiser (the "Second Appraiser'): If the Second Appraiser is not timely designated, the determination of the fair market value shall be made by the First Appraiser. The First Appraiser, or each of the First Appraiser and the Second Appraiser, shall submit its determination of the fair market value to the Company and the Members (and, in the case of a Recapitalization, all holders of the Debt Securities) within twenty (20) days of the date of its selection (or the selection of the Second Appraiser, as applicable). If there are two appraisers and their respective determinations of the fair market value vary by less than ten percent (10%) of the higher determination, the fair market value shall be the average of the two determinations. If such determinations vary by ten percent (10%) or more of the higher determination, the two appraisers shall promptly designate a third appraiser (the "Third Appraiser"). Neither the Company nor the holder whose interest is being exchanged shall provide, and the First Appraiser and the Second Appraiser shall be instructed not to provide, any information to the Third Appraiser as to the determinations of the First Appraiser and the Second Appraiser or otherwise influence the Third Appraiser in any way. The Third Appraiser shall submit its determination of fair market value to the Company and the Members (and, in the case of a Recapitalization, all holders of the Debt Securities) within twenty (20) days of the date of its selection. The fair market value shall be equal to the average of the two closest of the three determinations, provided that, if the difference between the highest and the middle determination is no more than 105% and no less than 95% of the difference between the middle and the lowest determinations, then the fair market value shall equal the middle determination. (c) Status of Appraiser. Each appraiser selected pursuant to this Section 3.6 shall be disinterested and must be a nationally recognized appraiser qualified to appraise the property being appraised. 3. 7 Distributions and Payments to Members. (a) It is the intent of the Members that no distribution or payment to any Member shall be deemed a return of money or other property in violation of the Act. The payment or distribution of any such money or property to a Member shall be deemed to be a compromise within the meaning of Section 18-502(b) of the Act, and the Member receiving any such money or property shall not be required to return any such money or property to the Company, any creditor of the Company or any other Person. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to return such money or property, such obligation shall be the obligation of such Member and not of the Managing Member or the Company or any other Member. (b) Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to any Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other applicable law. 3.8 Conversion of Class A Preferred Shares. On or after January 12, 1999, at the option of any Member holding Class A Preferred Shares, the Company shall convert all of the Class A Preferred Shares held by such Member into Common Shares. Appropriate adjustments, if any, to the sharing and distribution ratios set forth herein with respect to the Class A Preferred Shares and the Common Shares shall be made in connection with any such conversion to maintain the relative economic benefits and burdens of the remaining Class A Preferred Shares, such that each Class A Preferred Share does not entitle the holder thereof to a larger or smaller distribution (whether on dissolution or otherwise) than if such conversion had not occurred, with the balance being payable on the Common Shares, Share for Share alike. The conversion shall be made such that each holder of Class A Preferred Shares electing to convert such shares shall receive Common Shares having an aggregate fair market value on the date of the conversion equal to the aggregate fair market value on the date of the conversion of the Class A Preferred Shares surrendered by such holder. The determination of the fair market value of the Class A Preferred Shares and the Common Shares as of the conversion date shall be determined in accordance with the procedures and methodology set forth in Section 3.6. Any Member who elects to convert its Class A Preferred Shares pursuant to this Section 3.8 shall be deemed to have withdrawn from the Company with respect to its Class A Preferred Shares and shall be deemed to be admitted with respect to the Common Shares received in connection with such conversion. 3.9 Cancellation of Recapitalized or Converted Class A Preferred Shares. Any Class A Preferred Shares recapitalized pursuant to Section 3.5 or converted into Common Shares pursuant to Section 3.8 shall be canceled by the Company upon such recapitalization or conversion and shall not be reissued. Upon conversion in accordance with Section 3.8, the Member converting its Class A Preferred Shares shall tender its Class A Preferred Share certificates to the Company, and the Managing Member shall thereafter issue Common Share certificates to such Member pursuant to Section 12.3 hereof.
SECTION 4 MANAGEMENT
4.1 Managing Member. (a) The Members intend that the Company be managed by one member (the "Managing Member'). The Managing Member shall be elected by a vote of the Members. (b) Simultaneously with the execution hereof, PCI, American Energy, Potomac Nevada, PCI Air, and London Branch hereby elect PCI Air as the initial Managing Member, to serve until its successor shall have been elected and qualified, and PCI Air hereby accepts such position. (c) The Managing Member must be a Member of the Company and must be, and remain as long as it is the Managing Member, a "citizen of the United States" within the meaning of Section 40102(a)(15) of Title 49 of the United States Code and shall notify the Members upon becoming aware of any fact or circumstance-that would lead reasonably to the conclusion that such Managing Member is at risk of losing such citizenship. 4.2 Term. The Managing Member shall be designated for a one year term and shall hold office until his, her or its term expires and until his, her or its successor shall be elected and shall qualify to serve, subject to prior death, resignation, retirement, disqualification, or removal from office. Upon the vacancy of the Managing Member position, the Members shall elect a successor who satisfies the criteria set forth in Section 4.1 hereof. 4.3 Removal; Termination of Status. The Managing Member may be removed with or without cause by a vote of the Members. The Managing Member shall cease to be the Managing Member upon the first to occur of (i) the removal of such Managing Member pursuant to this Section 4.3, (ii) the Bankruptcy of such Managing Member, or (iii) the occurrence of any event that causes such Managing Member to fail to satisfy the criteria set forth in Section 4.1 hereof. No such removal or termination of status of a Managing Member shall, in and of itself, affect the status of such Managing Member as a Member. 4.4 Managing Member. (a) The management of the Company shall be vested in the Managing Member. The Managing Member shall manage and control the business of the Company, subject to the limitations and restrictions set forth in this Agreement, by conducting, in the name of, and on behalf of, the Company the business and affairs of the Company, and in so doing may exercise in the name of, and on behalf of, the Company all the rights and powers which may be possessed by the Members under the Act including, without limitation the rights and powers provided in this Agreement. (b) Any Person dealing with the Company may rely (without duty of further inquiry) upon a certificate signed by the Managing Member as to:
			(i) The identity of any Managing Member, Member, or Officer; (ii) The existence or nonexistence of any fact or facts which constitute a condition precedent to acts by the Managing Member or which are in other matters germane to the affairs of the Company; (iii) The Persons who are authorized to execute and deliver any instrument or document of the Company; or (iv) Any act or failure to act by the Company or any other matter whatsoever involving the Company or any Member.
(c) The signature of the Managing Member shall be necessary and sufficient to convey title to any Property owned by the Company or to execute any promissory notes, trust deeds, mortgages, or other instruments of hypothecation, and all of the Members agree that a copy of this Agreement may be shown to the appropriate parties in order to confirm the same, and further agree that the signature of the Managing Member shall be sufficient to execute any document necessary to effectuate this or any other provision of this Agreement. All of the Members, pursuant to Section 10, do hereby appoint the Managing Member as their attorney-in- fact for the execution of any or all of the documents described in this Section 4.4(c). (d) The Managing Member shall have the power to delegate authority to such committees, employees, agents and representatives of the Company, as it may from time to time deem appropriate. Any delegation of authority to take any action must be approved in the same manner as would be required for the Managing Member to approve such action directly. The Managing Member is hereby authorized to execute all agreements and other documents necessary for or incidental to the formation of the Company, including, without limitation, those agreements set forth in Sections 1.3, 1.9(d), and 4.5(r), (u), and (v). (e) The Managing Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the "Officers") and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Managing Member explicitly provides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section 4.4(e) may be revoked at any time by the Managing Member. An Officer may be removed with or without cause by the Managing Member. (f) A Managing Member shall not be liable under a judgment, decree, or order of court, or in any other manner, for a debt, obligation, or liability of the Company solely by virtue of such Managing Member serving as the Managing Member of the Company. 4.5 Managing Member Powers. Subject to any restrictions set forth in the Certificate or this Operating Agreement, including without limitation, those set forth in Section 4.7 hereof, all powers to control and manage the business and affairs of the Company shall be exclusively vested in the Managing Member and the Managing Member may exercise all powers of the Company and do all such lawful acts as are not by statute, the Certificate, or this Operating Agreement directed or required to be exercised or done by the Members and in so doing shall have the right and authority to take all actions which the Managing Member deems necessary, useful, or appropriate for the management and conduct of the Company's business and affairs and in the pursuit of the purposes of the Company, including (without limitation) exercising the following specific rights and powers in the name and on behalf of the Company: (a) Conduct its business, carry on its operations, and have and exercise the powers granted by the Act in any state, territory, district, or possession of the United States, or in any foreign country which may be necessary or convenient to effect any or all of the purposes for which it is organized; (b) Acquire by purchase, lease, or otherwise any personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Company, which property may be held directly or through an ownership trust; (c) Operate, maintain, finance, improve, construct, own, grant options with respect to, sell, convey, assign, and lease any personal property necessary, convenient, or incidental to the accomplishment of the purposes of the Company; (d) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of the Property, or in connection with managing the affairs of the Company, including, executing amendments to this Operating Agreement and the Certificate in accordance with the terms of this Operating Agreement, both as Managing Member and, if required, as attorney-in-fact for the Members pursuant to any power of attorney granted by the Members to the Managing Member; (e) Borrow money and issue evidences of indebtedness necessary, convenient, or incidental to the accomplishment of the purposes of the Company, and secure the same by pledge or other lien on any Company assets; (f) Execute, in furtherance of any or all of the purposes of the Company, any lease, promissory note, bill of sale, contract, or other instrument purporting to convey or encumber any or all of the Company's assets; (g) Prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the assets of the Company and in connection therewith execute any extensions or renewals of encumbrances on any or all of such assets; (h) Care for and distribute funds to the Members by way of cash income, return of capital, or otherwise, and declare distributions all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Company or this Agreement; (i) Contract on behalf of the Company for the employment and services of employees and/or independent contractors, including (but not limited to) lawyers and accountants, and delegate to such Persons the duty to manage or supervise any of the assets or operations of the Company, and to cause the Company to pay the fees associated therewith; (j) Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Company assets and Managing Member liability) necessary or incidental to, or in connection with, the accomplishment of the purposes of the Company, as may be lawfully carried on or performed by a limited liability company under the laws of each state in which the Company is then formed or qualified; (k) Take, or refrain from taking, all actions, not expressly prescribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Company; (l) Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Company, the Members, or any Managing Member in connection with activities arising out of, connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith; (m) Purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use, employ, sell, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign companies, associations, general or limited partnerships, other limited liability companies, or individuals or direct or indirect obligations of the United States or of any government, state, territory, government district, or municipality or of any instrumentality of any of them; (n) Indemnify a Member, the Managing Member, a former Member, or a former Managing Member, in accordance with this Operating Agreement and to make any other indemnification that is authorized by this Agreement in accordance with the Act; (o) Acquire the London Branch Residual Interests and cash contributed by the Members; (p) Issue the Debt Securities to London Branch; (q) Act as an "authorized person" on behalf of the Company, as that term is used in the Act. (r) Enter into leases and renewals thereof of the Leased Equipment or similar assets to PCI or its Affiliates; (s) Make Permitted Investments and, in the event that any income received with respect to, or the proceeds of the sale of, any Permitted Investments is paid to the Company in non-cash consideration which is not itself a Permitted Investments, the Managing Member shall cause the Company to sell or otherwise dispose of such consideration in a commercially reasonable manner within ninety (90) days of its acquisition; (t) Execute, in connection with any Recapitalization, one or more Recapitalization Notes; (u) Execute and deliver on behalf of the Company the London Branch Contribution Agreement and any other documents or instruments to be delivered in connection therewith; and (v) Execute and deliver on behalf of the Company each of the REMIC Administration Agreement, the Aircraft Interest Purchase Agreement, and the Assignment and Assumption Agreement and cause the Company to perform its respective obligations thereunder. 4.6 Duties and Obligations of the Managing Member. (a) The Managing Member shall take all actions which may be necessary or appropriate (i) for the continuation of the Company's valid existence as a limited liability company under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Members or to enable the Company to conduct the business in which it is engaged, (ii) for the accomplishment of the Company's purposes, including the acquisition, development, maintenance, preservation, and operation of Property in accordance with the provisions of this Agreement and applicable laws and regulations, and (iii) to elect that the Company be taxed as an association taxable as a corporation for federal income tax purposes by filing Form 8832 within 75 days of the date of the filing of the Certificate and to reasonably satisfy any applicable reporting requirements with respect to the Company. (b) Except as otherwise provided in Section 1.9(b) hereof, the Managing Member shall be under a fiduciary duty to conduct the affairs of the Company in the best interests of the Company and of the Members, including the safekeeping and use of all of the Property and the use thereof for the exclusive benefit of the Company. 4.7 Limitations. Notwithstanding any other provision of this Operating Agreement, no action may be taken by the Company (whether by the Managing Member or otherwise) in connection with the following matters: (a) Causing or permitting the Company to engage in any activity that is not consistent with the purposes of the Company as set forth in Section 1.3 hereof, (b) Knowingly doing any act in contravention of this Operating Agreement; (c) Causing the Company to merge or consolidate with another Person; (d) Knowingly doing any act, which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Operating Agreement; (e) Possessing Property, or assigning rights in specific Property, for other than a Company purpose; (f) Redeeming, retiring, exchanging property for, or otherwise acquiring Common Shares or Class A Preferred Shares, except as provided in Section 3.5 and Section 3.8. (g) Making any amendment, consent, waiver, or other modification with respect to this Operating Agreement or any PCI Note; (h) Causing the Company to invest in or acquire directly or indirectly any assets other than (i) those acquired by contribution of the Members pursuant to Section 2.2, (ii) Permitted Investments, and (iii) cash proceeds and ancillary rights arising from the transactions contemplated hereby; or (i) Causing the Company to issue additional Common Shares after the Effective Date other than pursuant to Section 3.8. 4.8 Compensation; Expenses. Except as otherwise provided in Section 4.9 and Section 11.5(b) hereof, the Managing Member shall receive an annual fee in the amount of fifty thousand dollars ($50,000) for services rendered to or on behalf of the Company or otherwise in its capacity as a Member including record keeping for REMIC residual interests, any portfolio management required, management of the Leased Equipment or similar assets and leases thereof, preparing tax returns and audited financial statements, cash management, and other maintenance of the Company's assets. Except as otherwise provided herein, the Managing Member shall not be reimbursed for any general or administrative expenses incurred by it on behalf of the Company. 4.9 Indemnification of the Managing Member. (a) Unless otherwise provided in Section 4.9(d), the Company, its receiver or its trustee (in the case of its receiver or trustee, to the extent of Company Property) shall indemnify, save harmless, and pay all expenses of any Managing Member, or any officers or directors of a Managing Member (individually, an "Indemnified Person" and collectively, the "Indemnified Persons") relating to any liability, damage, or expense incurred by reason of any act performed or omitted to be performed by any Indemnified Person in connection with the business of the Company, including reasonable attorneys' fees incurred by the Indemnified Person in connection with the defense of any action based on any such act or omission, which attorneys' fees shall be paid as incurred, including all such liabilities under federal and state securities laws (including the Securities Act and the Exchange Act) as permitted by law. (b) Unless otherwise provided in Section 4.9(d), in the event of any action by a Member against any Indemnified Person, including a Company derivative suit, the Company shall indemnify, save harmless, and pay all expenses of such Indemnified Person, including reasonable attorneys' fees incurred in the defense of such action. (c) Unless otherwise provided in Section 4.9(d), the Company shall indemnify, save harmless, and pay all expenses, costs, or liabilities of any Indemnified Person, if for the benefit of the Company and in accordance with this Agreement said Indemnified Person makes any deposit or makes any other similar payment or assumes any obligation in connection with any property proposed to be acquired by the Company and suffers any financial loss as the result of such action. (d) Notwithstanding the provisions of Sections 4.9(a), 4.9(b), and 4.9(c), such sections shall be enforced only to the maximum extent permitted by law and no Indemnified Person shall be indemnified from any liability for the fraud, intentional misconduct, gross negligence or a knowing violation of the law which was material to the cause of action. (e) Notwithstanding anything to the contrary in this Agreement, in no event will any indemnification obligation of the Company or a receiver or trustee to indemnify, save harmless, or pay all expenses set forth in this Section 4.9 subject any Member or Managing Member to personal liability. 4.10 Managing Member's Liability. Notwithstanding any other terms of this Agreement, whether expressed or implied, or an obligation or duty at law or in equity, none of the Managing Member or its officers or directors (individually, a "Covered Person" and collectively, the "Covered Persons") shall be liable to the Company or any Member for any act or omission (in relation to the Company, this Agreement, any related document, or any transaction or investment contemplated hereby or thereby) taken or omitted in good faith by a Covered Person that is within the scope of authority granted to such Covered Person by or in accordance with this Agreement, provided that such act or omission does not constitute fraud, bad faith, intentional misconduct, gross negligence, or a material failure to perform in accordance with this Agreement.
SECTION 5 ROLE OF MEMBERS
5.1 Rights or Powers. The Members, in their capacities as Members of the Company, shall not have any right or power to take part in the management or control of the Company or its business and affairs or to act for or bind the Company in any way. Notwithstanding the foregoing, the Members have all the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act. 5.2 Voting Rights. Unless otherwise provided by this Operating Agreement, or as required by applicable law, on all matters to be voted on by the Members, holders of Common Shares and Class A Preferred Shares shall vote together as a single class. Each Member shall be entitled to cast one vote for each Common Share or Class A Preferred Share registered in its name. Except as otherwise expressly provided in this Agreement, a majority vote, agreement, approval, or consent of the Members voting as a single class and by shares shall be required to constitute the act of the Members or the vote, agreement, approval, or consent of the Members. 5.3 Meetings and Consents of the Members. (a) The Company shall call an annual meeting of its Members on or about the first week of each April. Special meetings of the Members may be called by the Managing Member or upon the written request of any Member. The call for any meeting shall state the location of the meeting and the nature of the business to be transacted. Notice of any such meeting shall be given to all Members not less than ten (10) Business Days nor more than thirty (30) days prior to the date of such meeting. Members may vote in person, by proxy or by telephone at such meeting and may waive advance notice of such meeting. Whenever the vote, agreement, approval, or consent of Members is permitted or required under this Agreement, such vote, agreement, approval, or consent may be given at a meeting of the Members or may be given in accordance with the procedure prescribed in Section 5.4. (b) For the purpose of determining the Members entitled to vote on, or to vote at, any meeting of the Members or any adjournment thereof, the Managing Member or the Member requesting such meeting may fix, in advance, a date as the record dates for any such determination. Such date shall not be more than thirty (30) days nor less than ten (10) Business Days before any such meeting. (c) Each Member may authorize any Person or Persons to act for it by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it. 5.4 Procedure for Consent. In any circumstances requiring the vote, agreement, approval or consent of the Members specified in this Operating Agreement, such vote, agreement, approval or consent may, except where a standard for such vote, agreement, approval or consent is provided for expressly in this Operating Agreement, be given or withheld in the sole and absolute discretion of the Members, and each Member shall be entitled to consider only such factors and interests as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person. If the Managing Member receives the necessary vote, agreement, approval or consent of the Members to such action, the Managing Member shall be authorized and empowered to implement such action without further authorization by the Members. Such vote, agreement, approval or consent must be obtained in writing or by telephone or facsimile, if such telephone conversation or facsimile is followed by a written summary of the telephone conversation or facsimile communication sent by overnight courier, registered or certified mail, postage and charges prepaid, addressed as described in Section 12.1 hereof, provided, however, that such vote, agreement, approval or consent shall be deemed to have been given by a Member if such Member does not otherwise notify the Managing Member in writing within sixty (60) days after such Member is notified in writing by the Managing Member that such Member's vote, agreement, approval or consent is requested. 5.5 Members' Liability. No Member shall be liable under a judgment, decree, or order of a court, or in any other manner for the Debts or any other obligations or liabilities of the Company solely by reason of being a member of the Company. A Member shall be liable only to make the contributions described in Section 2.2 and, in the case of London Branch, pursuant to the London Branch Contribution Agreement, on the terms therein described, and shall not be required to lend any funds to the Company, or to make any other contributions, assessments or payments to the Company, provided that a Member may be required to repay distributions made to it as provided in Section 18-607 of the Act or Section 3.7 hereof. 5.6 Partition. While the Company remains in effect or is continued, each Member agrees not to have any Company Property partitioned or file a complaint or institute any suit, action or proceeding at law or in equity to have any Company Property partitioned, and each Member, on behalf of itself, its successors and its assigns hereby waives any such right. 5.7 Transactions Between a Member or Managing Member and the Company. Except as otherwise provided by applicable law, any Member or Managing Member may, but shall not be obligated to, enter into the transactions described in Sections 1.9(c), 1.9(d) and 1.9(e) and transact other business with the Company and has the same rights and obligations when transacting such business with the Company as a Person or entity who is not a Member or Managing Member. A Member or Managing Member, any Affiliate thereof or any employee, stockholder, agent, director, or officer of a Member or Managing Member or any Affiliate thereof, may also be an employee or be retained as an agent of the Company. 5.8 Other Instruments. Each Member hereby agrees to execute and deliver to the Company within five (5) Business Days after receipt of a written request therefor, such other and further documents and instruments, statements of interest and holdings, designations, powers of attorney, and other instruments and to take such other action as the Managing Member deems necessary, useful or appropriate to comply with any laws, rules, or regulations as may be necessary to enable the Company to fulfill its responsibilities under this Agreement. 5.9 Withdrawal. Except as otherwise provided in Section 3.5, Section 3.8, and Section 9, no member shall withdraw from the Company. If any Member withdraws from the Company in breach of this Section 5.9, without limiting any other liability as a result of such breach, such withdrawing Member shall not be entitled to receive any distribution under this Agreement or the Act.
SECTION 6 REPRESENTATIONS AND WARRANTIES
6.1 In General. As of the date hereof, each of the Members hereby makes each of the representations and warranties applicable to such Member as set forth in Section 6.2 hereof, and such warranties and representations shall survive the execution of this Agreement. 6.2 Representations and Warranties. Each Member hereby represents and warrants to the Company and each other Member that: (a) Due Incorporation or Formation; Authorization of Agreement. Such Member is a corporation duly organized or a partnership or limited liability company duly formed, validly existing, and in good standing under the laws of the jurisdiction of its incorporation or formation and has the corporate, partnership, or limited liability company power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Member is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Member has the corporate, partnership, or limited liability company power and authority to execute and deliver this Operating Agreement and to perform its obligations hereunder and the execution, delivery, and performance of this Operating Agreement has been duly authorized by all necessary corporate, partnership, or limited liability company action. This Operating Agreement constitutes the legal, valid, and binding obligation of such Member. (b) No Conflict with Restrictions; No Default. Neither the execution, delivery, and performance of this Operating Agreement nor the consummation by such Member of the transactions contemplated hereby (i) will conflict with, violate, or result in a breach, whether with notice or lapse of time or both, of any of the terms, conditions, or provisions of any law, regulation, order, writ, injunction, decree, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator, applicable to such Member, (ii) will conflict with, violate, result in a breach of, or constitute a default under, whether with notice or lapse of time or both, any of the terms, conditions, or provisions of the articles of incorporation, bylaws, partnership agreement, or limited liability company or operating agreement of such Member, (iii) will conflict with, violate, result in a breach of, constitute a default under (whether with notice or lapse of time-or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights, or require any consent, authorization, or approval under any indenture, note, bond, mortgage, lease agreement, or other instrument or agreement to which such Member is a party or by which such Member is or may be bound or (iv) will result in the creation or imposition of any lien, claim, charge or encumbrance upon any of the material properties or assets of such Member. (c) Governmental Authorizations. Any registration, declaration, or filing (other than routine filings of an informational nature) with, or consent, approval, license, permit, or other authorization or order by, any governmental or regulatory authority, domestic or foreign, that is required by such Member in connection with the valid execution, delivery, acceptance, and performance by such Member of its obligations under this Agreement or the consummation by such Member of any transaction contemplated hereby has been completed, made, or obtained on or before the Effective Date. (d) Litigation. There are no actions, suits, proceedings, or investigations pending or, to the knowledge of the executive officers of such Member, threatened against or affecting such Member or its Affiliates or any of its or their properties, assets, or businesses in any court or before or by any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit, or proceeding, which if adversely determined could) reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member; and such Member has not received any currently effective notice of any default, and such Member is not in default (whether with notice or lapse of time or both), under any applicable order, writ, injunction, decree, permit, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Member's ability to perform its obligations under this Operating Agreement or to have a material adverse effect on the consolidated financial condition of such Member. (e) Public Utility Holding Company Act. Such Member and each of its Affiliates is not, nor will the Company or any of its Members as a result of such Member holding an interest therein be, a "holding company," an "affiliate of a holding company," a "subsidiary of a holding company," or an "associate company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended, or the regulations promulgated thereunder. (f) Investigation. Such Member is acquiring its Shares and/or Debt Securities based upon its own investigation, and the exercise by such Member of its rights and the performance of its obligations under this Agreement will be based upon its own investigation, analysis, and expertise. Except as contemplated in Section 9.5(e), such Member's acquisition of its Shares and/or Debt Securities is being made for its own account for investment, and not with a view to the sale or distribution thereof Such Member is a sophisticated investor possessing an expertise in analyzing the benefits and risks associated with acquiring investments that are similar to the acquisition of its Shares. (g) Citizenship. Such Member is, and shall remain so long as it is a Member, a "citizen of the United States" within the meaning of Section 40102(a)(15) of Title 49 of the United States Code and shall notify the Managing Member immediately upon becoming aware of any fact or circumstance that would lead reasonably to the conclusion that such Member is at risk of losing such citizenship. (h) ERISA. Such Member is not acquiring its Shares and/or Debt Securities with the assets of any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or any "plan" within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended. (i) Tax Filings. Each Member agrees to file all returns necessary (or deemed necessary by the Managing Member) to assure that the Company is treated as an association taxable as a corporation for federal and all relevant state and local income tax purposes. (j) Observance of Form. Each Member will treat and will cause its Affiliates to treat the Shares as equity interests in the Company for tax, financial accounting, regulatory, and all other purposes. Each Member, during any period of time when it shall be elected and serving as Managing Member, will at all times cause the Company to represent itself to third parties as a separate entity in all transactions, observe all material state limited liability company law and bookkeeping formalities, maintain separate bank accounts, have employees and/or pay fees for services that would otherwise be rendered by employees (which would be satisfied by payment to the Managing Member under Section 4.8) and execute contracts consistent with its status as a separate entity. (k) Plan or Intent to Dispose of Shares. Each Member has no plan, intent or arrangement to dispose of its Shares other than the anticipated transfer of London Branch's Shares to BT Florida and the possible exchange of Class A Preferred Shares in a conversion pursuant to Section 3.8 or a Recapitalization. 6.3 Subsidiary Representation. PCI represents that it owns, directly or indirectly and legally-or beneficially, all of the outstanding capital stock or ownership interests in the capital and profits of American Energy, Potomac Nevada, and PCI Air. Subject to the terms of this Agreement, PCI shall prevent the occurrence of a "cumulative net loss date" as of any date prior to January 11, 2003. A "cumulative net loss date" shall occur as of any date on which the cumulative amount of all items of deduction accrued by the Company exceeds the cumulative amount of all items of income accrued by the Company (in each case as determined on a gross basis for federal income tax purposes) from the Effective Date through such date. London Branch represents that BTNY owns, directly or indirectly and legally or beneficially, all of the outstanding capital stock or ownership interests in the capital and profits of BTCo and BT Florida.
SECTION 7 ACCOUNTING, BOOKS AND RECORDS
7.1 Accounting, Books and Records. (a) The Company shall keep on site at its principal place of business each of the following:
			(i) Separate books of account for the Company which shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received, and all income derived in connection with the conduct of the Company and the operation of its business in accordance with this Operating Agreement; (ii) A current list of the full name and last known business, residence, or mailing address of each Member and Managing Member, both past and present; (iii) A copy of the Certificate and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been executed; (iv) Copies of the Company's federal, state, and local income tax returns and reports, if any, for the three most recent years; (v) Copies of this Operating Agreement; (vi) Unless contained in this Operating Agreement, a statement prepared and certified as accurate by the Managing Member of the Company which describes:
						(A) The amount of cash and a description and statement of the agreed value of the other property contributed by each Member and which each Member has agreed to contribute in the future; (B) The times at which or events on the happening of which any additional contributions agreed to be made by each Member are to be made; (C) Any right of a Member to receive distributions, and the relative preferences and designations of the Company's Shares;
			(vii) Any written votes, agreements, approvals, or consents obtained from Members pursuant to Section 5.4; (viii) Unaudited quarterly financial statements; (ix) A list of assets acquired by the Company during the quarter other than Temporary Investments (to the extent that such Temporary Investments are Bank Eligible).
(b) The Company shall use the accrual method of accounting in preparation of its financial reports and for tax purposes and shall keep its books and records accordingly. Any Member or its designated representative has the right at its own cost and expense, at any reasonable time, to have access to and inspect and copy the contents of such books or records. The Managing Member shall be reimbursed by such Member for reasonable costs incurred as a result of such inspection. Any records maintained by the Company in the regular course of its business, including books of account and records of Company proceedings, may be kept on or be in the form of magnetic tape, photographs, micrographics or any other information storage device, provided that the records so kept are convertible into clearly legible written form within a reasonable period of time. Notwithstanding anything in the Act (including Section 18-305(c) of the Act) or this Agreement to the contrary, the Managing Member shall not have the right to keep confidential from any Member any information concerning the Company. 7.2 Reports. (a) In General. The Managing Member shall be responsible for causing the preparation of financial reports of the Company and the coordination of financial matters of the Company with the Company's accountants. (b) Periodic Reports. The Company shall cause to be delivered to each Member the financial statements listed in clauses (i) and (ii) below, prepared in each case in accordance with generally accepted accounting principles. The quarterly financial statements referred to in clause (ii) below may be subject to normal year-end audit adjustments.
			(i) Within ninety (90) days after the end of each fiscal year of the Company, a balance sheet of the Company as of the end of such fiscal year and the related statements of operations and cash flows. (ii) Within sixty (60) days after the end of each of the first three fiscal quarters of each fiscal year of the Company, a balance sheet of the Company as of the end of such fiscal quarter and the related statements of operations and cash flows.
SECTION 8 AMENDMENTS
8.1 Amendments. Amendments to this Agreement may be proposed by any Member. Following such proposal, the Managing Member shall submit to the Members a verbatim statement of any proposed amendment, providing that counsel for the Company shall have approved of the same in writing as to form, and the Managing Member shall include in any such submission a recommendation as to the proposed amendment. The Managing Member shall seek the written vote of the Members on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto if it receives the affirmative vote of all of the Members.
SECTION 9 TRANSFERS
The parties intend that subject to the requirements of applicable law the Shares not be transferable without the consent of all of the Members except as provided in Section 9.4. In furtherance of the foregoing, and so long as any Shares remain issued and outstanding, each Member, by acquiring Shares (whether on even date herewith or at any time thereafter) agrees, as a condition to such acquisition, as follows: 9.1 Transfer of Shares. (a) No Member shall transfer or sell any of the Shares held by such Member (i) if such assignment would result in the violation of any applicable federal or state securities laws, and (ii) except as provided in Section 9.4, without the consent of all of the Members. The Company shall not be required to recognize any such assignment until the instrument conveying such interest has been delivered to the Managing Member for recordation on the books of the Company and the requirements of Section 9.5 have been satisfied. In no event shall a transfer be valid if such transfer would cause the Company to be an "investment company" under the Investment Company Act of 1940, as amended. 9.2 Legend. Each certificate of Shares shall be stamped or otherwise imprinted with a legend substantially in the following form: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), THE SECURITIES LAWS OF ANY STATE (THE "STATE ACTS") OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, BY ANY STATE SECURITIES COMMISSION OR BY ANY OTHER REGULATORY AUTHORITY OF ANY OTHER JURISDICTION ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. NEITHER THE SHARES NOR ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OR FOR WHICH SUCH REGISTRATION IS OTHERWISE NOT REQUIRED AND (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER ANY APPLICABLE STATE ACTS OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER SUCH STATE ACTS OR FOR WHICH SUCH REGISTRATION OTHERWISE IS NOT REQUIRED. THE SHARES REPRESENTED BY THIS CERTIFICATE EVIDENCE THE PROPORTIONATE PORTION OF SUCH HOLDER'S LIMITED LIABILITY COMPANY INTEREST IN THE COMPANY. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TRANSFER RESTRICTIONS CONTAINED IN SECTION 9 OF THE OPERATING AGREEMENT OF THE COMPANY. A STATEMENT OF THE RELATIVE RIGHTS AND PREFERENCES OF THE COMPANY'S LIMITED LIABILITY COMPANY INTERESTS, AS EVIDENCED BY ITS CLASSES OF COMMON SHARES AND OF CLASS A PREFERRED SHARES AND OF CLASS B PREFERRED SHARES WILL BE' FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST AND WITHOUT CHARGE. THERE IS NO PUBLIC MARKET FOR THE SHARES AND NONE IS EXPECTED TO DEVELOP. THEREFORE, RECIPIENTS OF SHARES WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. 9.3 Notice of Proposed Transfer. Subject to any other restrictions in Section 9.1 and Section 9.5, prior to any transfer or sale of any shares, the transferring Member shall deliver a written notice (in accordance with Section 12.1 hereof) to the Managing Member describing briefly the manner of such transfer or sale, a certificate of the transferee that it is a "qualified purchaser" within the meaning of the Investment Company Act of 1940, and a written opinion of counsel for such Member to the effect that such transfer or sale may be effected without the registration of such securities under the Securities Act. Upon receipt of such notice, the Managing Member will notify all of the Members of the proposed transfer or sale. 9.4 Non-Applicability of Restrictions on Transfer. Notwithstanding the provisions of this Section 9, a Member may transfer Class A Preferred Shares to the Company in accordance with Section 3.5 and Section 3.8. Notwithstanding the provisions of this Section 9 other than Section 9.2 and Section 9.5, (i) any Member may from time to time transfer all or any portion of its Shares (A) to a nominee identified in writing to the Company as being the nominee of such Member, and any nominee of or for a beneficial owner of Shares identified in writing to the Company as being the nominee of or for such Member may from time to time transfer all or part of the Shares registered in the name of such nominee but held as nominee on behalf of such Member to such Member, (B) to another Member, or (C) to an Affiliate of such Member, and (ii) in the event that any regulatory authority (federal, state, local, or otherwise) would require the sale or exchange by London Branch of all or part of its Class A Preferred Shares, such Member may transfer all, but not less than all, of its Shares to any Person not described in clause (i) of this Section 9.4, provided with respect to this clause (ii) that the sale or exchange of such Shares shall first be offered to PCI or such Affiliates of PCI as PCI may designate in writing. 9.5 Admission of Members. Subject to the other provisions of this Section 9, a transferee of Shares shall be admitted to the Company as a Member upon the satisfaction of the applicable conditions set forth in this Section 9.5. If a transferee of Shares satisfies the applicable conditions set forth in this Section 9.5, such transferee shall be deemed admitted to the Company as a Member, whereafter the transferor shall be deemed withdrawn from the Company with respect to the Shares transferred. (a) The transferee (other than, with respect to clauses (i) and (ii) below, a transferee that is a Member immediately prior to the transfer) shall, by written instrument in form and substance reasonably satisfactory to the Managing Member (and, in the case of clause (iii) below, the transferor Member), (i) make representations and warranties to each of the nontransferring Members equivalent to those set forth in Section 6, (ii) accept and adopt the terms and provisions of this Agreement, including this Section 9, and (iii) assume the obligations of the transferor Member under this Operating Agreement by such transferor with respect to the transferred Shares. The transferor Member shall be released from all such assumed obligations except (x) those obligations or liabilities of the transferor Member arising out of a breach of this Operating Agreement and (y) in the case of a transfer to any Person other than a Member, those obligations or liabilities of the transferor Member based on events occurring, arising or maturing prior to the date of transfer; (b) Unless the requirements of this Section 9.5(b) have been waived by the Managing Member, the transferee shall pay or reimburse the Company for all reasonable legal, filing, and publication costs that the Company incurs in connection with the admission of the transferee as a Member with respect to the transferred Shares; (c) If required by the Managing Member, the transferee (other than a transferee that was a Member prior to the transfer) shall deliver to the Company evidence of the authority of such Person to become a Member and to be bound by all of the terms and conditions of this Agreement, and the transferee and transferor shall each execute and deliver such other instruments as the Managing Member reasonably deems necessary or appropriate to effect, and as a condition to, such transfer, including amendments to the Certificate or any other instrument filed with the State of Delaware or any other state or governmental authority; (d) The transferee shall furnish the Company with the transferee's taxpayer identification number and any other information reasonably necessary to permit the Company to file all required federal and state tax returns and other legally required information statements or returns. Notwithstanding any other provisions of this Section 9, the requirements of this Section 9.5(d) shall apply to any transfer under this Section 9; and (e) PCI, American Energy, Potomac Nevada, and PCI Air hereby consent to the admission of BT Florida as a Member upon satisfaction of the requirements of this Section 9.5 which are applicable to transfers pursuant to Section 9.4(i). Appropriate documents evidencing the satisfaction of such requirements shall be executed at the time of the transfer of Shares to BT Florida. The Members acknowledge that all requirements of Section 9.5 shall be satisfied by the execution by BT Florida of a Transferee Certificate in the form attached as Exhibit G. At such time as London Branch transfers all of its Shares to BT Florida and BT Florida is admitted as a substituted Member hereunder, London Branch shall cease to be a Member and shall be deemed withdrawn from the Company. The Members acknowledge that BT Florida will also acquire the Debt Securities from London Branch. 9.6 Effect of Transfer on Company. Notwithstanding the withdrawal of a Member incident to a transfer to a Person who becomes admitted pursuant to Section 9.5 hereof, the Members agree that in furtherance of Section 1.5 of this Agreement, the Company shall continue and be continued after such transfer. 9.7 Five Members. Notwithstanding anything to the contrary herein, except with respect to transfers in connection with a Recapitalization, no transfer shall be allowed hereunder of any Shares if the result would be fewer than five Members each holding at least 1 percent (1%) of the aggregate number of Common Shares and Class A Preferred Shares.
SECTION 10 POWER OF ATTORNEY
10.1 Managing Member as Attorney-In-Fact. Each Member hereby makes, constitutes, and appoints the Managing Member, with full power of substitution and resubstitution, its true and lawful attorney-in-fact for it and in its name, place, and stead and for its use and benefit, to sign, execute, certify, acknowledge, swear -to, file, publish, and record (i) all certificates of formation, amended name or similar certificates, and other certificates and instruments (including counterparts of this Operating Agreement) which the Managing Member may deem necessary to be filed by the Company under the laws of the State of Delaware or any other jurisdiction in which the Company is doing or intends to do business; (ii) any and all duly authorized amendments, restatements, or changes to this Operating Agreement and the instruments described in clause (i), as now or hereafter amended, which the Managing Member may deem necessary to effect a change or modification of the Company in accordance with the terms of this Operating Agreement, including, without limitation, amendments, restatements, or changes to reflect (A) the admission of any Member and (B) the disposition by any Member of its interest in the Company; (iii) all certificates of cancellation and other instruments which the Liquidator deems necessary or appropriate to effect the dissolution and termination of the Company pursuant to the terms of this Operating Agreement; and (iv) any other instrument which is now or may hereafter be required by law to be filed on behalf of the Company or is deemed necessary by the Managing Member to carry out fully the provisions of this Operating Agreement in accordance with its terms. Each Member authorizes such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary in connection with any of the foregoing, hereby giving such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite to be done in connection with the foregoing as fully as such Member might or could do personally, and hereby ratify and confirm all that such attorney-in-fact shall lawfully do, or cause to be done, by virtue thereof or hereof. 10.2 Nature of Special Power. The power of attorney granted to the Managing Member pursuant to this Section 10: (a) Is a special power of- attorney coupled with an interest and is irrevocable; (b) May be exercised by such attorney-in-fact by listing the Members executing any agreement, certificate, instrument, or other document with the single signature of any such attorney-in-fact acting as attorney-in-fact for such Members; and (c) Shall survive and not be affected by the subsequent Bankruptcy, insolvency, dissolution, or cessation of existence of a Member and shall survive the delivery of an assignment by a Member of the whole or a portion of its interest in the Company (except that where the assignment is of such Member's entire interest in the Company and the assignee, with the consent of the other Members, is admitted as a Member, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling any such attorney-in-fact to effect such substitution) and shall extend to such Member's or assignee's successors and assigns.
SECTION 11 DISSOLUTION AND WINDING UP
11.1 Dissolution Events. (a) Dissolution. The Company shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a "Dissolution Event"):
			(i) The unanimous vote of the Members to dissolve, wind up, and liquidate the Company; (ii) A judicial determination that an event has occurred that makes it unlawful, impossible, or not reasonably practicable to carry on the business of the Company; and (iii) The occurrence of January 12, 2038.
(b) Consolidation; Merger, etc. Neither (i) the consolidation nor merger of the Company with or into one or more other limited liability companies, corporations, or other entities where the Company is the surviving entity, nor the sale or lease of all or substantially all of the assets of the Company or (ii) the death, retirement, resignation, expulsion, Bankruptcy, or dissolution of a Member, or the occurrence of any other event which terminates the continued membership of a Member in the Company under the Act, shall in and of itself cause or be deemed a dissolution or cause the winding up of the affairs of the Company within the meaning of this Section 11. Upon the occurrence of any such event, the business of the Company shall be continued without dissolution. 11.2 Winding Up. Upon the occurrence of a Dissolution Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company's business and affairs, provided that all covenants contained in this Operating Agreement and obligations provided for in this Operating Agreement shall continue to be fully binding upon the Members until such time as the Property has been distributed pursuant to this Section 11.2 and the Certificate has been canceled pursuant to the Act. The Liquidator shall be responsible for overseeing the winding up and dissolution of the Company, which winding up and dissolution shall be completed within ninety (90) days of the occurrence of the Dissolution Event. The Liquidator shall take full account of the Company's liabilities and Property and shall cause the Property or the proceeds from the sale thereof (as determined pursuant to Section 11.6), to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order: (a) First, to creditors (including Members who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Company's Debts and other liabilities (whether- by payment or the making of reasonable provision for payment thereof), other than liabilities for which reasonable provision for payment has been made and liabilities for distributions to Members under Section 18-601 or 18-604 of the Act; (b) Second, to Members who are creditors in satisfaction of all of the Company's Debts and liabilities to such Members as creditors, to the extent not otherwise satisfied under paragraph (a) above; (c) Third, to the holders of Class B Preferred Shares, if any, in accordance with the terms thereof; (d) Fourth, to the holders of the Class A Preferred Shares, to the extent of an amount equal to the aggregate of the Liquidation Preferences of all outstanding Class A Preferred Shares; and (e) Fifth, 93.457943% (or such other percentage as may be determined in accordance with Section 3.8) to the holders of Common Shares and 6.542057% (or such other percentage as may be determined in accordance with Section 3.8) to holders of Class A Preferred Shares, such amounts being shared equally, within each class, Share for Share alike, provided that after the Recapitalization Date, distributions under this Section 11.2(e) shall be made 100% to the Common Shares, Share for Share alike. 11.3 Rights of Members. Except as otherwise provided in this Agreement, each Member shall look solely to the Property of the Company for the return of its investment and has no right or power to demand or receive Property other than cash from the Company. If the assets of the Company remaining after payment or discharge of the Debts or liabilities of the Company are insufficient to return such investment, the Members shall have no recourse against the Company or any other Member or Managing Member. 11.4 Notice of Dissolution/Termination. (a) In the event a Dissolution Event occurs, the Liquidator shall, within thirty (30) days thereafter, provide written notice thereof to each of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Liquidator) and shall publish notice thereof in a newspaper of general circulation in each place in which the Company regularly conducts business (as determined in the discretion of the Liquidator). (b) Upon completion of the distribution of the Company's Property as provided in this Section 11, the Company shall be terminated, and the Liquidator shall cause the filing of the Certificate of Cancellation pursuant to Section 18-203 of the Act and shall take all such other actions as may be necessary to terminate the Company. 11.5 The Liquidator. (a) Definition. The "Liquidator" shall mean the Managing Member or such other Person as the Managing Member shall appoint to oversee the dissolution of the Company and shall have the power of attorney granted to the Managing Member pursuant to Section 10. (b) Fees. The Company is authorized to pay a reasonable fee to the Liquidator (other than a Liquidator that is also a Member or Managing Member) for its services performed pursuant to this Section 11 and to reimburse the Liquidator for its reasonable costs and expenses incurred in performing those services. (c) Indemnification. The Company shall indemnify, save harmless, and pay all judgments and claims against such Liquidator or any officers, directors, stockholders, agents or employees of the Liquidator relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Liquidator, or any officers, directors, stockholders, agents or employees of the Liquidator in connection with the winding up of the Company, including reasonable attorneys' fees incurred by the Liquidator, officer, director, stockholder, agent or employee in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, except to the extent such liability or damage is caused by the fraud, intentional misconduct of, or a knowing violation of the laws by the Liquidator which was material to the cause of action. 11.6 Form of Liquidating Distributions. For purposes of making distributions required by Section 11.2 hereof, the Liquidator may determine whether to distribute all or any portion of the Property in-kind or to sell all or any portion of the Property and distribute the proceeds therefrom.
SECTION 12 MISCELLANEOUS
12.1 Notices. Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered, given, and received for all purposes (i) if delivered personally to the Person or to an officer of the Person to whom the same is directed or (ii) when the same is actually received, if sent either by registered or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by registered or certified mail, postage and charges prepaid, addressed to such Person at the address set forth on Exhibit E hereof, as the same shall be amended, or to such other address as such Person may from time to time specify by notice to the Members. 12.2 Binding Effect. Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns. 12.3 Certificates for Shares. A certificate or certificates for Shares shall be issued to each Member when any of the Shares are acquired by such Member. All certificates shall be signed by the Managing Member. In case a Managing Member who shall have signed, or whose facsimile signature shall have been used on, any certificate or certificates shall cease to be the Managing Member of the Company, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Company, the certificate or certificates may nevertheless be adopted by the Company and be issued and delivered as though the person who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be the Managing Member. 12.4 Lost Certificates. The Managing Member may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Company alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the Person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Managing Member may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates, or the Member's legal representative, to advertise the same in any manner as it shall require or give the Company a bond in any sum as it may direct as indemnity against any claim that may be made against the Company with respect to the certificate alleged to have been lost or destroyed, or both. 12.5 Construction. Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Member. 12.6 Time. In computing any period of time pursuant to this Agreement, the day of the act, event, or default from which the designated period of time begins to run shall not be included, but-the time shall begin to run on the next succeeding day. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run until the end of the next day which is not a Saturday, Sunday or legal holiday. 12 7 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof. 12.8 Severability. Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The preceding sentence of this Section 12.8 shall be of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Member to lose the material benefit of its economic bargain. 12.9 Incorporation by Reference. No exhibit, schedule, or other appendix attached to this Agreement and referred to herein is incorporated in this Agreement by reference unless this Agreement expressly otherwise provides. 12.10 Variation of Terms. All terms and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular, or plural, as the identity of the Person or Persons may require. 12.11 Governing Law. The laws of the State of Delaware (without regard to its conflict of law principles) shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties arising hereunder. 12.12 Waiver of Jury Trial. Each of the Members irrevocably waives, to the extent permitted by law, all rights to trial by jury and all rights to immunity by sovereignty or otherwise in any action, proceeding or counterclaim arising out of or relating to this Agreement. 12.13 Counterpart Execution. This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement. 12.14 Specific Performance. Each Member agrees with the other Members that the other Members would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the nonbreaching Members may be entitled, at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof. 12.15 Engagement in Bank Eligible Activities and Investment in Bank Eligible Assets. (a) It is the intention of the Members that the Company will engage only in Bank Eligible activities and will invest only in Bank Eligible assets. In furtherance therewith and only as required by applicable law, the Members hereby acknowledge that the Company is subject to federal banking laws and regulations and to supervision and examination (i) by the Board of Governors of the Federal Reserve System, (ii) under the banking laws of the State of New York, and (iii) under the Federal Deposit Insurance Act. (b) In the event that it becomes unlawful or otherwise prohibited for any of the Members to continue to be Members of the Company or any of the Members become subject to federal banking laws and regulations which materially restrict such Member's ability to conduct its business in the ordinary course, the Members agree to negotiate in good faith to amend this Agreement so as to comply with any legal and/or regulatory requirements and to minimize the adverse financial impact of such laws or regulations. 12.16 No Material Impairment. No Member shall take any action that could impair materially such Member's ability to perform its duties and obligations under this Agreement. 12.17 Jurisdiction; Service of Process. Each party hereto (i) submits to the non-exclusive jurisdiction of any Delaware State court or Federal court sitting in Wilmington, Delaware in any action arising out of this Agreement and (ii) consents to the service of process by mail. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
							POTOMAC CAPITAL INVESTMENT CORPORATION By: /s/ John D. McCallum Name: Title: AMERICAN ENERGY CORPORATION By: /s/ Gary R. Correll Name: Gary R. Correll Title: Vice President POTOMAC NEVADA CORPORATION By: /s/ Leslie C. Zimberg Name: Title: PCI AIR MANAGEMENT CORPORATION By /s/ John D. McCallum Name: Title: BANKERS TRUST COMPANY, acting through its London Branch By: /s/ Peter R. Burke Peter R. Burke Authorized Signatory

JOINT VENTURE AGREEMENT

THIS AGREEMENT, dated as of September 1, 1984 between BT POTOMAC, INC., a Delaware corporation ("BT Potomac"), and POTOMAC CAPITAL INVESTMENT CORPORATION, a Delaware corporation ("Potomac Capital") (BT Potomac and Potomac Capital being hereinafter sometimes referred to, singly, as a "Venturer" and, collectively, as the "Venturers").
W I T N E S S E T H :
WHEREAS, BT Potomac and Potomac Capital desire to form a joint venture under the laws of the State of Delaware, upon the terms and conditions and for the purposes hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
As used in this Agreement:
" Advance " means any transfer of money or other property, in the nature of loan, by aVenturer to the Joint Venture or any amount paid for or on behalf of the Joint Venture by a Venturer for which such Venturer is entitled to be reimbursed by the Joint Venture. Contributions to the capital of the Joint Venture pursuant to the terms of this Agreement shall not be deemed to be Advances.
" Capital Account " means the account established and maintained for each Venturer pursuant to Section 3.4.
" Distribution " means transfer of money or other property to a Venturer, in its capacity as a Venturer, from the Joint Venture, other than reimbursement of expenses of such Venturer in accordance with the terms of this Agreement or a payment in respect of Advances. Property transferred to a Venturer as part of a Distribution shall be valued at to a Venturer as part of a Distribution shall be valued at its fair market value on the date of transfer.
" Equipment " means commercial aircraft or other equipment satisfactory to the Venturers.
" Effective Date " is defined in Section 7.9 hereof.
" Fiscal Period " means the period commencing on January 1 and ending on December 31 in each year; provided that the Fiscal Period during which the Effective Date occurs shall be deemed to commence on such Effective Date and the Fiscal Period in which the Joint Venture is dissolved pursuant to Section 5.1 shall be deemed to end on the date of such dissolution.
" Joint Venture " means the single purpose venture formed by this Agreement.
" Laws " means all ordinances, statutes, rules, regulations, orders, injunctions, writs or decrees of any government or political subdivision or agency thereof, or any court or similar entity established by any thereof.
" Net Cash Flow " means, for any Fiscal Period, all cash receipts of the Joint Venture in such Fiscal Period derived from the conduct of business in accordance with the terms of this Agreement, reduced by the sum of the following items paid or reserved in such Fiscal Period: (i) all expenses of the Joint Venture; (ii) the repayment of any Advances or other amounts borrowed by the Joint Venture; (iii) any other expenditures authorized by this Agreement; and (iv) such reserves as the Venturers deem reasonably necessary to the proper operation of the business of the Joint Venture.
" Net Income or Net Loss " means, for any Fiscal Period, the difference between ath gross receipts of the Joint Venture during such period and all expenses and deductions of the Joint Venture for such period determined in accordance with the generally accepted accounting principles for financial reporting.
" Person " means an individual, a corporation, a partnership, a trust, an unincorporated organization or a government or agency or political subdivision thereof.
" Pro Rata Share " means one-eleventh (1/11) for BT Potomac and ten-elevenths (10/11) for Potomac Capital.
" Related Person " means any Person that is a Venturer or that controls, is controlled by or is under common control with, a Venturer.
ARTICLE II FORMATION
Section 2.1 Formation . BT Potomac and Potomac Capital hereby enter into a joint venture pursuant to the Laws of the State of Delaware and specifically the Delaware Uniform Partnership Law.
Section 2.2 Name . The business of the Joint Venture shall be conducted under the name of PCI-BT Ventures.
Section 2.3 Place of Business . The principal office and place of business of the Joint Venture shall be located c/o Potomac Capital Investment Corporation, 1100 North Market Street, Wilmington, Delaware 19801, or at such other place or places as the Venturers may from time to time designate.
Section 2.4 Term . The Joint Venture shall commence on the Effective Date and shall continue, unless earlier dissolved in accordance with the terms of Section 5.1, until December 31, 2009.
Section 2.5 Purpose . The Joint Venture is formed to purchase and lease Equipment during the term of the Joint Venture to lessees approved by the Venturers and, in furtherance thereof, to take any action and to execute and deliver any documents or instruments necessary or appropriate in connection with such purposes or as otherwise contemplated in this Agreement. The Joint Venture shall not engage in any business or activity or enter into any transaction other than as authorized in this Section.
ARTICLE III FINANCIAL ARRANGEMENTS
Section 3.1 Capital Contributions . (a) Each Venturer agrees to contribute to the initial capital of the Joint Venture its pro rata share of amounts of cash required to be paid by the Joint Venture set forth in the proposed Participation Agreement dated as of September 1, 1984 among Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), the Joint Venture, BCR-BT Ventures, the Venturers, the Loan Participants named therein, Mercantile-Safe Deposit and Trust Company, as Indenture Trustee and Wilmington Trust Company, as Owner Trustee, subject to the approval of the terms of such Participation Agreement by each Venturer in its sole discretion and the satisfaction of the conditions set forth in such Participation Agreement.
(b) From time to time hereafter, if the Venturers so agree, in their sole discretion, the Venturers shall contribute additional cash amounts to the capital of the Joint Venture to purchase Equipment to be leased to others in the conduct of the business of the Joint Venture, to satisfy the liabilities and obligations of the Joint Venture, and for such other uses, consistent with the purpose set forth in Section 2.5 hereof, as to which the Venturers shall agree. Neither Venturer shall be obligated to make additional contributions to the capital of the Joint Venture, but if an additional contribution is agreed to by the Venturers, each Venturer shall pay into the Joint Venture its Pro Rata Share of such contribution.
(c) Except as otherwise agreed by the Venturers, no portion of any capital contribution to the Joint Venture shall bear interest.
Section 3.2 Net Income or Net Loss . Net Income or Net Loss for each Fiscal Period of the Joint Venture shall be allocated to each Venturer in accordance with its respective Pro Rata Share. Every item of income, gain, loss, deduction, credit or tax preference entering into the computation of Net Income or Net Loss, or attributable to any Fiscal Period during which Net Income or Net Loss was realized, shall be allocated to each Venturer in the same proportion and at the same time as such Net Income or Net Loss is allocated to such Venturer.
Section 3.3 Distributions . Not less frequently than annually, the Net Cash Flow of the Joint Venture for the last preceding Fiscal Period shall be distributed to the Venturers. Each Venturer shall receive in each such Distribution an amount equal to its Pro Rata Share of the total amount of such Distribution.
Section 3.4 Capital Accounts . A Capital Account shall be established and maintained for each Venturer. The Capital Account for each Venturer shall initially be credited with the amount of its initial contribution to the capital of the Joint Venture, and thereafter shall be increased by the amount of (i) any additional contributions to the capital of the Joint Venture made by such Venturer pursuant to Section 3.1(b) and (ii) any Net Income allocated to such Venturer pursuant to Section 3.2, and shall be decreased by the amount of (x) any Distribution to such Venturer made pursuant to Section 3.3 and (y) any Net Loss allocated to such Venturer pursuant to Section 3.2.
Section 3.5 Rights to Capital Accounts and Distributions . No Venturer shall have the right to demand the return of or to withdraw any portion of its contributions to the capital of the Joint Venture, except to the extent capital is required to be distributed pursuant to Section 3.3. No Venturer shall have any right to priority over the other Venturer as to any Distribution.
Section 3.6 Expenses . The Joint Venture shall pay (or shall.reimburse a.Venturer.who shall have paid) all expenses incurred in connection with the organization, qualification and conduct of business of the Joint Venture, including without limitation the reasonable fees and expenses of legal counsel, accountants or others retained pursuant to Section 6.2, and shall reimburse each Venturer for the actual amount or fair market value of services and facilities contributed to the Joint Venture in connection with the maintenance of books and records of the Joint Venture or the furnishing of financial statements pursuant to Section 6.1 hereof, and the provision of office space, supplies and clerical and other services relating to the Joint Venture and its business.
Section 3.7 Advances . Venturer may, with the consent of the other Venturer, make Advances from time to time to the Joint Venture on such terms and conditions as to which the Venturers may agree.
ARTICLE IV MANAGEMENT
Section 4.1 Business of the Joint Venture . Each Venturer shall have equal rights in the management and conduct of the business of the Joint Venture. All decisions regarding the management and, affairs of the Joint Venture shall be made by unanimous consent of all Venturers.
Section 4.2 Restrictions on Rights and Powers . Without the consent of both Venturers, neither Venturer shall have the right to:
	(a) Do any act in contravention of this Agreement;
	(b) Do any act that would make it impossible to carry on the ordinary business of the Joint Venture;
	(c) Confess judgment against the Joint Venture;
	(d) Possess Joint Venture property, or assign its interests or rights in specific Joint Venture property, for other than a Joint Venture purpose;
	(e) Borrow money or give any guaranty on behalf or in the name of the Joint Venture, or mortgage, pledge, grant a security interest in or otherwise encumber any property of the Joint Venture;
	(f) On behalf or in the name of the Joint Venture, make, execute, deliver, accept or endorse (except for collection) any promissory note or commercial paper belonging to the Joint Venture;
	(g) Assign, transfer, pledge, compromise or release any claim or debt due the Joint Venture, except upon payment in full thereof, or arbitrate or consent to the arbitration of any dispute or controversy to which the Joint Venture is a party or in which it has an interest;
	(h) On behalf or in the name of the Joint Venture, make, execute, or deliver any assignment for the benefit of creditors or any bond, confession of judgment, warrant of attorney, power of attorney, indemnity bond or surety bond;
	(i) Cause the Joint Venture to do business in or otherwise become subject to the taxing powers of any jurisdiction other than the United States and Delaware;
	(j) Purchase, sell or lease or enter into any written or oral contract for the purchase, sale or lease of Equipment or interest in Equipment or other property;
	(k) On behalf or in the name of the Joint Venture, make any obligation or enter into any undertaking for the accommodation of any other Person, whether as endorser, surety, guarantor, or otherwise;
	(1) On behalf or in the name of the Joint Venture, enter into any contract, lease, agreement or under- taking; or
	(m) On behalf or in the name of the Joint Venture, employ any Person.
Section 4.3 Liability . No Venturer shall incur any liability for any mistake or error in judgment made in good faith and in the exercise of due care in connection with the conduct of the business of the Joint Venture, and no Venturer shall be deemed to have violated any of the provisions of the Agreement for any such mistake or error.
Section 4.4 Right to Admit Venturers . There shall be no right to admit additional Venturers to the Joint Venture.
Section 4.5 Indemnification by Venturer Acting Unilaterally . As provided in Sections 4.1 and 4.2 hereof, all contracts which inure to the benefit of, or impose obligations upon, the Joint Venture or either of the Venturers must be agreed to by both Venturers. Should either Venturer, through its unilateral action, without the consent of the other Venturer having been first obtained, cause the Joint Venture to become obligated or indebted for any amount whatsoever through contract, lease, sale, purchase or otherwise, said contracting Venturer agrees to indemnify and hold the other Venturer harmless for all losses, costs, expenses, and subsequent charges, costs, and liabilities incurred by the Joint Venture as a.result of any such unilateral action by said Venturer which is binding upon the Joint Venture.
ARTICLE V DISSOLUTION
Section 5.1 Events of Dissolution . The Joint Venture shall be dissolved if:
	(a) Proceedings in bankruptcy, or for the reorganization, of a Venturer, or for the adjustment of any or all of its debts, under the Federal Bankruptcy Code, or any part thereof, or under any other laws, whether state or Federal, for the relief of debtors, now or hereafter existing, shall be commenced by a Venturer, or shall be commenced against a Venturer and shall not be discharged within thirty (30) days of its commencement, or a receiver or trustee shall be appointed for a Venturer or any part of its assets, or any proceeding shall be instituted for the dissolution or the full or partial liquidation of a Venturer, and such receiver or trustee shall not be discharged within thirty (30) days of his appointment, or such proceeding shall not be discharged within thirty (30) days of its commencement; or
	(b) The Venturers shall unanimously consent to dissolve the Joint Venture; or
	(c) All Equipment owned by the Joint Venture shall be sold, destroyed or otherwise disposed of.
Section 5.2 Liquidation . In the event that the Joint Venture shall be dissolved for any reason whatsoever (including, without limitation, termination of the Joint Venture pursuant to Section 2.4 hereof), a full and general account of its assets, liabilities and transactions shall be taken. The assets of the Joint Venture shall be sold and turned into cash as soon as possible and all debts and other amounts due the Joint Venture shall be collected. The proceeds thereof shall thereupon:
	(a) First, be applied to discharge the debts and liabilities of the Joint Venture (including all Advances not theretofore repaid) and the expenses of liquidation;
	(b) Second, be disbursed as a Distribution in liquidation to the Venturers, ratably in accordance with the respective amounts of their Capital Accounts, until such Capital Accounts have been reduced to zero or such proceeds fully disbursed; and
	(c) Third, be disbursed as a Distribution in liquidation to the Venturers in accordance with their respective Pro Rata Shares, until all such proceeds remaining are disbursed
No Venturer shall have the right to demand or receive property in kind as part of its Distribution in liquidation of the Joint Venture, or to enjoy any right to priority over the other Venturer as to such Distribution.
ARTICLE VI MISCELLANEOUS SUBSTANTIVE PROVISIONS
Section 6.1 Books and Records; Financial Statements . Full and accurate books of account shall be maintained for the Joint Venture, showing the condition of the business and finances of the Joint Venture, and shall be kept at such place as the Venturers may from time to time designate. Each Venturer shall have access to such books of account and shall be entitled to examine them at any time during ordinary business hours. As soon as practicable after the close of each Fiscal Period, the, independent public accountants retained by the Joint Venture pursuant to Section 6.2 shall prepare, in accordance with generally accepted accounting principles consistently applied to such Fiscal Period except as otherwise noted, financial statements setting forth the financial position of the Joint Venture as of the end of such Fiscal Period and the results of operations of the Joint Venture for such Fiscal Period. A true and complete copy of such financial statements, together with the report of the independent public accountants on the audit of such financial statements, shall be provided to each Venturer as soon as they are available.
The Joint Venture books shall be kept on the cash basis for Federal income tax purposes and in accordance with generally accepted. accounting principles for financial reporting.
Section 6.2 Agents. In connection with the Joint Venture's day to day activity, the Venturers shall have the power jointly to employ investment counsel, brokers, accountants and attorneys to act in the Joint Venture's behalf, as may be deemed necessary, incidental or convenient to the proper administration of the Joint Venture property and business. The Joint Venture shall have the power to regularly retain independent public accountants, with a nationally recognized standing and reputation reasonably satisfactory to both Venturers, to audit and prepare the financial statements of the Joint Venture pursuant to Section 6.1.
Section 6.3 Checks and Notes . All checks, demands for money and notes of the Joint Venture shall be signed by such person or persons as the Venturers jointly may from time to time designate.
Section 6.4 Conflicts of Interest . A Venturer may engage in or possess interests in other business ventures of any kind or description for its own account, including without limitation ventures engaged in the purchasing or leasing of Equipment. Neither the Joint Venture nor the other Venturer shall have any rights by virtue of this Agreement in such independent business ventures or to the income or profits derived therefrom. The Joint Venture, with the consent of both Ventures, may acquire property or services from, and may enter into leases and other contracts with, Related Persons.
Section 6.5 Use of Name . The name of the Joint Venture shall belong to and may be used by the Joint Venture, and shall not be sold or otherwise disposed of, so long as the Joint Venture shall continue in existence.
Section 6.6 Bank Accounts . The Joint Venture shall maintain a bank account or bank accounts in the Joint Venture's name in one or more national or state banks in the State of Delaware. Checks and drafts shall be drawn on the Joint Venture's bank accounts for the Joint Venture's purposes only. Available funds of the Joint Venture may be invested for such time as they are not needed in the ordinary course of the business of the Joint Venture, in such investments as the Venturers shall jointly designate.
ARTICLE VII MISCELLANEOUS PROCEDURAL PROVISIONS
Section 7.1 Notices . Any and all notices provided for herein shall be given in writing, by registered or certified mail, return receipt requested, addressed to each Venturer as follows:
(a)	if to BT Potomac: 280 Park Avenue New York, New York 10017 Attention: Officer-in Charge Lease Financing Group
(b)	if to Potomac Capital: 1100 North Market Street Suite 780 Wilmington, Delaware 19801 Attention: Vice President and Treasurer
A notice given hereunder shall be deemed to have been given on the date set forth on the return receipt as the date of receipt by the Venturer to whom such notice is given.
Section 7.2 Amendments and Modifications. This Agreement may be amended or modified only upon the execution by each Venturer of a writing setting forth such amendment or modification.
Section 7.3 Binding Effect; Assignment; Entire Agreement. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assigns of the Venturers. No Venturer shall have the right to assign any of its rights or obligations under this Agreement, or its interest in the Joint Venture, except to a corporation that is a Related Person as to such Venturer, or to any other Person upon the prior written consent of the other Venturer; provided, that (i) such assignment will not constitute a dissolution or a termination of the Joint Venture for Federal income tax purposes, or cause any portion of any investment tax credit or depreciation in respect of any Equipment to be recaptured or disallowed for Federal income tax purposes, and (ii) such Person may lawfully become a Venturer. No Person entitled to become a Venturer under this Section by virtue of an assignment shall become a Venturer until this Agreement, or a separate agreement by which such Person agrees to be bound by the terms of this Agreement, shall have been signed by such Person, and all registrations, filings and other acts required to record the assignment to such Person of an interest as a Venturer in the Joint Venture shall have been completed. This Agreement constitutes the entire agreement between the Venturers as to the subject matter hereof.
Section 7.4 Further Assurances . Each Venturer hereby agrees, for itself and its respective successors and assigns, to execute any and all instruments and to take any and all actions that are or may become necessary or proper to carry out the intent of this Agreement. Whenever a consent of a Venturer is required, such consent shall be in the sole discretion of such Venturer and shall be in writing.
Section 7.5 Severability . If any provision of this Agreement shall be held invalid under any applicable Laws, such invalidity shall not affect any other provision of this Agreement that can be given effect without the invalid provision and, to this end, the provisions hereof are severable.
Section 7.6 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be taken to be an original, but all of which, together, shall be taken to be but one instrument.
Section 7.7 Waiver . No waiver of any provision of this Agreement shall be valid unless in writing and signed by the person or party against whom charged.
Section 7.8 Applicable Law . This Agreement shall be subject to and governed by the Laws of the State of Delaware and specifically the Delaware Uniform Partnership Law, without regard to the rules of conflicts of law.
Section 7.9 Effective Date . This Agreement shall be effective on the date it is executed by the Venturers. For convenience of reference, this Agreement is dated as of September 1, 1984 but the actual date of execution by the parties hereto is the date set forth opposite their signatures.
Section 7.10 Headings . Headings of the Articles and Sections of this Agreement have been included for convenience of reference only and shall not to any extent have the effect of modifying, amending or changing the express terms and provisions of this Agreement.
Section 7.11 Gender and Number . As used herein, unless the context clearly indicates the contrary, the singular number shall include the plural, the plural the singular and the use of any gender shall be applicable to all genders.
IN WITNESS WHEREOF, the undersigned have executed this Joint Venture Agreement on the date set forth on the first page hereof.
Date: September 13, 1984		BT POTOMAC, INC. By /s/ JAMES J. CONROY
Date: September 13, 1984		POTOMAC CAPITAL INVESTMENT CORPORATION By S. J. BRIGHT

STATE of DELAWARE CERTIFICATE of INCORPORATION A STOCK CORPORATION
First: The name of this Corporation is Pepco Operations and Maintenance Corporation.
Second: Its registered office in the State of Delaware ism be located at 1013 Centre Road, in the City of Wi1mington, County of New Castle, DE 19805. The registered agent in charge thereof is Corporation Service Company, 1013 Centre Road, Wilmington, DE 19808.
Third: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
Fourth: The amount of the total authorized capital stock of this corporation is $1000.00 divided into 1000 shares of One Dollar ($1.00) each.
Fifth: The name and mailing address of the incorporator are as follows:
	Name: Leslie C. Zimberg
	Mailing Address	1801 K Street. N.W.. Suite 900 Washington. D.C. 20006
The Undersigned, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this 23 ^rd day of April, A.D., 1999.
		By: /s/ LESLIE C. ZIMBERG (Incorporator) NAME: Leslie C. Zimberg (Type or Print)

CERTIFICATE OF AMENDMENT Before Payment of Capital of CERTIFICATE OF INCORPORATION of PEPCO OPERATIONS AND MAINTENANCE CORPORATION
Pursuant to Section 241 of Title 8 of the Delaware Code of 1953, as Amended
I, the undersigned, being the Sole Incorporator of the above named corporation, a corporation organized under and by virtue of the General Corporation Law of the State of Delaware, DO HEREBY CERTIFY:
FIRST: That at a meeting of the Sole Incorporator of said corporation, duly held and convened, resolutions were adopted setting forth a proposed amendment to the Certificate of Incorporation of said corporation and declaring said amendment advisable.
RESOLVED that the Certificate of Incorporation of this Corporation be, and it hereby is, amended by changing Article I to read as follows: The name of the Corporation is Pepco Building Services Corporation.
SECOND: That no part of the capital of said corporation having been paid, this certificate is filed pursuant to Section 241 of Title 8 of the Delaware Code, as amended.
IN WITNESS WHEREOF, I have duly executed this Certificate of Amendment this 6 ^th day of May, 1999.
		By: /s/ LESLIE C. ZIMBERG Leslie C. Zimberg

CERTIFICATE OF AMENDMENT Before Payment of Capital of CERTIFICATE OF INCORPORATION of PEPCO BUILDING SERVICES CORPORATION
Pursuant to Section 241 of Title 8 Of the Delaware Code of 1953, as Amended
I, the undersigned, being the Sole Incorporator of the above named corporation, a corporation organized under and by virtue of the General Corporation Law of the State of Delaware, DO HEREBY CERTIFY:
FIRST: That at a meeting of the Sole Incorporator of said corporation, duly held and convened, resolutions were adopted setting forth a proposed amendment to the Certificate of Incorporation of said corporation and declaring said amendment advisable.
RESOLVED that the Certificate of Incorporation of this Corporation be, and it hereby is, amended by changing Article I to read as follows: The name of the Corporation is Pepco Building Services Inc.
SECOND: That no part of the capital of said corporation having been paid, this certificate is filed pursuant to Section 241 of Title 8 of the Delaware Code, as amended.
IN WITNESS WHEREOF, I have duly executed this Certificate of Amendment this 22nd day of July, 1999.
		By: /s/ LESLIE C. ZIMBERG Leslie C. Zimberg

BY-LAWS

OF

PEPCO BUILDING SERVICES INC (a Delaware Corporation)

April 23, 1999

PEPCO BUILDING SERVICES INC

BY-LAWS

Article I

OFFICES

           Section 1.           The registered office of Pepco Building Services Inc (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

          Section 2.           The Corporation may also have offices at other places both within and without the State of Delaware.

                                                                                               Article II

                                                                        MEETING OF SHAREHOLDERS

          Section 1.          The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

          Section 2.          A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding. such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

          Section 3.          Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

          Section 1.          The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

          Section 2.          A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

           Section 3.          (a)          Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                                    (b)          Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof.

                                    (c)          Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

          Section 4.          (a)          As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section of this Article.

                                    (b)          Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                                    (c)          The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                                    (d)          The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

          Section 5.          The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time detem1ine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

          Section 6.          Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

          Section 7.          Anyone or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

          Section 8.          The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

          Section 9.          Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts OT (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be detem1ined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law. if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

          Section 1.          The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

          Section 2.          The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

          Section 3.          Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

          Section 1.          The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

          Section 2.          The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

          Section 3.          No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

           All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

           All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

          Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF PEPCO COMMUNICATIONS, INC. The undersigned, for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows: ARTICLE I The name of the corporation is Pepco Communications, Inc. ARTICLE II The address of its registered office in the State of Delaware is 1013 Centre Road, Wilmington, County of New Castle. The name of its registered agent at such address is Corporation Service Company. ARTICLE III The nature of the business or purposes to be conducted or promoted is: To engage in any business approved by the Board of Directors for which corporations may be organized under the General Corporation Law of Delaware. ARTICLE IV The Corporation shall have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00). ARTICLE V The name and mailing address of the incorporator is as follows:
NAME Leslie C. Zimberg	MAILING ADDRESS 1801 K Street, N.W., Suite 900 Washington, D.C. 20006
ARTICLE VI Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide. ARTICLE VII The Corporation is to have perpetual existence. ARTICLE VIII In furtherance and not in limitation of the power conferred by statute, the Board of Directors shall have the power to adopt, amend, alter and repeal the By-Laws of the Corporation. ARTICLE IX Meetings of stockholders may be held within or without the State of Delaware. The books of the Corporation may be kept (subject to any provision contained in the Delaware statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation. ARTICLE X The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. ARTICLE XI No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived. an improper personal benefit. ARTICLE XII The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware now existing or as such laws may hereafter be amended. I, THE UNDERSIGNED, being the incorporator hereinbefore named, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 2 ^nd day of December, 1997.
	/s/ LESLIE C. ZIMBERG Leslie C. Zimberg Incorporator

	STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 12/31/1997 981001807 - 2828267
CERTIFICATE OF MERGER OF PEPCOM, INC. INTO PEPCO COMMUNICATIONS, INC. The undersigned corporation organized under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That the name and the state of incorporation of each of the constituent corporations of the merger is:
Name Pepco Communications, Inc PepCom, Inc	State of Incorporation Delaware Delaware
SECOND: That an agreement and plan of merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 251 of Title 8 of the General Corporation Law of the State of Delaware. THIRD: That the name of the surviving corporation of the merger is Pepco Communications, Inc. FOURTH: That the Certificate of Incorporation of Pepco Communications, Inc. shall be the Certificate of Incorporation of the surviving corporation. FIFTH: That the executed agreement and plan of merger is on file at the principal place of business of the surviving corporation. The address of the principal place of business of the surviving corporation is Suite 900, 1801 K Street, NW, Washington, D.C. 20006. SIXTH: That a copy of the agreement and plan of merger will be furnished by the surviving corporation, on request and without cost, to any shareholder of either constituent corporation. SEVENTH: That the Merger shall be effective as of 11:59p.m. eastern time on December 31, 1997. IN WITNESS WHEREOF, the surviving corporation has caused this certificate to be executed by its President and attested by its Secretary this 31 ^st day of December, 1997.
ATTEST: /s/ JANET HECK DOYLE Secretary Janet Heck Doyle Dated: December 31, 1997	Pepco Communications, Inc. By: /s/ JOHN D. McCALLUM President John D. McCallum

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 12/19/2000 001636451 - 2828267
CERTIICATE OF MERGER OF PEPDATA, INC. AND PEPCO COMMUNICATIONS, INC. It is hereby certified that: 1. The constituent business corporations participating in the merger herein certified are:
(i)	PepData, Inc., which is incorporated under the laws of the State of Delaware;
and (ii)	Pepco Communications, Inc., which is incorporated under the laws of the State of Delaware
2. An Agreement and Plan of Merger has been approved, adopted, executed, and acknowledged by each of the aforesaid constituent corporations in accordance with the provisions of subsection (c) of Section 251 of the General Corporation Law of the State of Delaware. 3. The name of the surviving corporation in the merger herein certified is Pepco Communications, Inc., which will continue its existence as said surviving corporation upon the effective date of said merger pursuant to the provisions of the General Corporation Law of the State of Delaware. 4. The Certificate of Incorporation of Pepco Communications, Inc., as now in force and effect, shall continue to be the Certificate of Incorporation of said surviving corporation until amended and changed pursuant to the provisions of the General Corporation Law of the State of Delaware. 5. The executed Agreement and Plan of Merger between the aforesaid constituent corporations is on file at an office of the aforesaid surviving corporation, the address of which is as follows: 1801 K Street, N.W., Suite 900, Washington, D.C. 20006. 6. A copy of the aforesaid Agreement and Plan of Merger will be furnished by the aforesaid surviving corporation, on request, and without cost, to any stockholder of each of the aforesaid constituent corporations. 7. The Agreement and Plan of Merger between the aforesaid constituent corporations provides that the merger herein certified was approved on December 11, 2000 and shall become effective on December 31, 2000.
		Pepco Communications, Inc. /s/ JOY J. DORSEY Joy J. Dorsey, Secretary

BY-LAWS

PEPCO COMMUNICATIONS, INC.
(a Delaware Corporation)

DECEMBER 2, 1997

PEPCO COMMUNICATIONS, INC.

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Pepco Communications, Inc. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETINGS OF SHAREHOLDERS

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Article III

DIRECTORS

Section 2. A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

Section 3. (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if tie time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the. Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF FORMATION

OF

PEPCO COMMUNICATIONS L.L.C.
A LIMITED LIABILITY COMPANY

FIRST:     The name of the limited liability company is:

PEPCO COMMUNICATIONS L.L.C.

SECOND:      Its registered office in the State of Delaware is to be located at 1013 Centre Road, in the City of Wilmington, County of New Castle, 19805, and its registered agent at such address is CORPORATION SERVICE COMPANY.

IN WITNESS WHEREOF, the undersigned, being the individual forming the Company, has executed, signed and acknowledged this Certificate of Formation this twenty-ninth day of July, A.D. 1997.

/s/ Kathleen Crowley
Authorized Person
Kathleen Crowley

LIMITED LIABILITY COMPANY AGREEMENT OF PEPCO COMMUNICATIONS L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of PEPCO Communications L.L.C. (the Company), is made by Potomac Capital Investment Corporation, a Delaware corporation and the sole member of the Company (the Member). WHEREAS, the Member has formed the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. Section 18-101, et seq ), as amended from time to time (the Act), and hereby agrees as follows: 1. Name . The name of the Company is PEPCO Communications L.L.C. 2. Term . The term of the Company commenced on July 29, 1997 with the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Act and shall continue until dissolution and termination of the Company in accordance with Section 21 hereof. 3. Purpose . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act. 4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby authorized to: (a) acquire by purchase, lease, contribution of property or otherwise, own, hold, sell, convey, transfer or dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (b) act as a trustee, executor, nominee, bailee, director, officer, agent or in some other fiduciary capacity for any person or entity and to exercise all of the powers, duties, rights and responsibilities associated therewith; (c) take any and all actions necessary, convenient or appropriate as trustee, executor, nominee, bailee, director, officer, agent or other fiduciary, including the granting or approval of waivers, consents or amendments of rights or powers relating thereto and the execution of appropriate documents to evidence such waivers, consents or amendments; (d) operate, purchase, maintain, finance, improve, own, sell, convey, assign, mortgage, lease or demolish or otherwise dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (e) borrow money and issue evidences of indebtedness in furtherance of any or all of the purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the Company; (f) invest any funds of the Company pending distribution or payment of the same pursuant to the provisions of this Agreement and open and maintain checking and savings accounts with banks and savings institutions; (g) prepay in whole or in part, refinance, recast, increase, modify or extend any indebtedness of the Company and, in connection therewith, execute any extensions, renewals or modifications of any mortgage or security agreement securing such indebtedness; (h) enter into, perform and carry out contracts of any kind, including, without limitation, contracts with the Member or any person or entity affiliated with the Member, necessary to, in connection with, convenient to, or incidental to the accomplishment of the purpose of the Company; (i) employ or otherwise engage employees, managers, contractors, advisors, attorneys and consultants and pay reasonable compensation for such services; (j) enter into partnerships, limited liability companies, trusts, associations, corporations or other ventures with other persons or entities in furtherance of the purpose of the Company; and (k) do such other things and engage in such other activities related to the foregoing as may be necessary, convenient or incidental to the conduct of the business of the Company, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act. 5. Principal Business Office . The principal business office of the Company shall be located at 1801 K Street, N.W., Suite 900, Washington, D.C. 20006, or any other location as may hereafter be determined by the Member. 6. Registered Office . The address of the registered office of the Company in the State of Delaware is 1013 Centre Road, Wilmington, Delaware 19805. 7. Registered Agent . The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is Corporation Service Company. 8. Member . The name and mailing address of the Member are set forth on Schedule A attached hereto. 9. Limited Liability . Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company. 10. Capital Contributions . The Member shall contribute the amount of cash to the Company set forth on Schedule A attached hereto. 11. Additional Contributions . The Member is not required to make any additional capital contribution to the Company. However, the Member may make additional capital contributions to the Company at any time. To the extent the Member makes an additional capital contribution to the Company, the Member shall revise Schedule A of this Agreement. 12. Allocation of Profits and Losses . The Company's profits and losses shall be allocated to the Member. 13. Distributions . Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other applicable law. 14. Management . (a) The business and affairs of the Company shall be managed under the direction and control of a management committee (the Management Committee), which shall consist of four (4) individuals, who need not be Members. The Management Committee initially shall consist of the following persons: John M. Derrick, Jr. (Chairman), Dennis R. Wraase (Vice Chairman), John D. McCallum and William Dana Shapiro. (b) All powers of the Company shall be exercised by or under the authority of the Management Committee. Decisions of the Management Committee within its scope of authority shall be binding upon the Company and the Member. (c) Meetings of the Management Committee shall be held at the principal place of business of the Company or at any other place that a majority of the members of the Management Committee determine. In the alternative, meetings may be held by conference telephone, provided that each member of the Management Committee can hear the others. The presence of at least three (3) of the members of the Management Committee shall constitute a quorum for the transaction of business. Meetings shall be held once each month, or otherwise in accordance with a schedule established by the Management Committee. In addition, any member of the Management Committee may convene a meeting thereof upon at least two (2) business days' prior written notice to the other members. The Management Committee shall act at meetings by majority vote. The Management Committee also may make decisions, without holding a meeting, by written consent of a majority of the members of the Management Committee. Minutes of each meeting and a record of each decision shall be kept by the designee of the Management Committee and shall be given to the Member promptly after the meeting or decision. (d) Except as otherwise determined by the Member, the members of the Management Committee shall serve without compensation from the Company. (e) The Member, with or without cause, at any time and from time to time and for any reason, may remove any member of the Management Committee then acting and appoint a new member of the Management Committee. 15. Officers. (a) The Management Committee may, from time to time as it deems advisable, appoint officers of the Company (the Officers) and assign in writing titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Management Committee decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. The Officers shall be subject to the general supervision and control of the Management Committee and shall carry out the policy decisions made by the members of the Management Committee. At each regular meeting of the Management Committee (and, when requested by any member thereof, at any special meeting of the Management Committee), the President or other appropriate Officers shall be present and shall report to the Management Committee on the operations of the Company or any other matters as any member of the Management Committee may request. Any delegation pursuant to this Section 15 may be revoked at any time by the Management Committee. An Officer may be removed with or without cause by the Management Committee. (b) At the direction of the Management Committee, the President and other appropriate Officers shall have the full power to perform any act that an authorized person may perform under the Act, and to execute, for and on behalf of the Company, any and all documents and instruments which may be necessary to carry on the business of the Company, including, without limitation, any and all deeds, contracts, leases, mortgages, deeds of trust, promissory notes, guarantees, security agreements, and financing statements pertaining to the Company's assets or obligations. No person dealing with the President or any other Officer need inquire into the validity or propriety of any document or instrument executed in the name of the Company by the President or other Officer, or as to the authority of the President or other Officer in executing the same. 16. Other Business . The Member may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement. 17. Exculpation and Indemnification . No member of the Management Committee or Officer (each of whom is hereinafter referred to as a Manager) shall be liable to the Company or the Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that a Manager shall be liable for any such loss, damage or claim incurred by reason of such Manager's willful misconduct. To the full extent permitted by applicable law, a Manager shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Manager by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that no Manager shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Manager by reason of willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 17 shall be provided out of and to the extent of Company assets only, and the Member shall have no personal liability on account thereof. 18. Assignments . The Member may assign in whole or in part its interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 18, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the Member shall cease to be a member of the Company. 19. Resignation . The Member may resign from the Company; provided, that in the event of such resignation an additional member of the Company shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the Member's resignation, and, immediately following such admission, the Member shall cease to be a member of the Company. 20. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member. 21. Dissolution. (a) The Company shall have a perpetual existence; provided, however, that the Company shall dissolve, and its affairs shall be wound up, upon the occurrence of either of the following: (i) the written consent of the Member, or (ii) the retirement, resignation or dissolution of the Member or the occurrence of any other event which terminates the continued membership of the Member in the Company unless the business of the Company is continued in a manner permitted by the Act. (b) The bankruptcy of the Member will not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution. (c) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act. 22. Separability of Provisions . Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal. 23. Entire Agreement. This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.. 24. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws. 25. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member. IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 29th day of July, 1997.
	POTOMAC CAPITAL INVESTMENT CORPORATION By: /s/ John D. McCallum John D. McCallum, President
SCHEDULE A to PEPCO Communications LLC Limited Liability Company Agreement
Agreed Value of Percentage Name Mailing Address Capital Contribution Interest Potomac Capital 1801 K Street, N.W. $1,000 100% Investment Corporation Suite 900 Washington, D.C. 20006

	STATE OF DELAWARE SECRLETARY OF STATE DIVISION OF CORPORATIONS FILED 09:05 AM 04/26/2000 001211443 - 3218536
CERTIFICATE OF INCORPORATION OF PEPCO ENERGY COMPANY The undersigned, for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows: ARTICLE I The name of the corporation is Pepco Energy Company ARTICLE II The address of its registered office in the State of Delaware is 1013 Centre Road, Wilmington, County of New Castle. The name of its registered agent at such address is Corporation Service Company. ARTICLE III The nature of the business to purposes to be conducted or promoted is: To engage in any business approved by the Board of Directors for which corporations may be organized under the General Corporation Law of Delaware. ARTICLE IV The Corporation shall have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One 'Thousand Dollars ($1,000.00). ARTICLE V The name and mailing address of the incorporator is as follows:
NAME Joy J. Dorsey	MAILING ADDRESS 1801 K Street NW, Suite 900 Washington, D.C. 20006
ARTICLE VI Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide. ARTICLE VII The Corporation is to have perpetual existence. ARTICLE VIII In furtherance and not in limitation of the power conferred by statute, the Board of Directors shall have the power to adopt, amend, alter and repeal the By-Laws of the Corporation. ARTICLE IX Meetings of stockholders may be held within or without the State of Delaware. The books of the Corporation may be kept (subject to any provision contained in the Delaware statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation. ARTICLE X The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred conferred upon stockholders herein are granted subject to this reservation. ARTICLE XI No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) or any transaction from which the director derived an improper personal benefit. ARTICLE XII The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware now existing or as such laws may hereafter be amended. I, THE UNDERSIGNED, being the incorporator hereinbefore named, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 25 ^th day of April, 2000.
	/s/ JOY J. DORSEY Joy J. Dorsey Incorporator

BY-LAWS

Pepco Energy Company
(a Delaware Corporation)

April 26, 2000

PEPCO ENERGY COMPANY

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Pepco Energy Company (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Article III

DIRECTORS

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine..

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

[Filed on 3/07/1995]
CERTIFICATE OF INCORPORATION OF PEPCO Services, Inc
The undersigned. for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:
ARTICLE I
The name of the corporation is PEPCO Services, Inc.
ARTICLE II
The address of its registered office in the State of Delaware is 32 Loockerman Square, Suite l-100, in the City of Dover, County of Kent. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is: To engage in any business for which corporations may be organized under the General Corporation Law of Delaware.
ARTICLE IV
The Corporation sha11 have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00).
ARTICLE V
The name and mailing address of the incorporator is as follows:
NAME John M. Derrick, Jr.	MAILING ADDRESS 1900 Pennsylvania Avenue, N. W. Washington, D. C. 20068
ARTICLE VI
Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.
ARTICLE VII
The corporation is to have perpetual existence.
ARTICLE VIII
In furtherance and not in limitation of the power conferred by statute, the Board of Directors shall have the power to adopt, amend, alter and repeal the By-Laws of the Corporation.
ARTICLE IX
Meetings of stockholders may he held within or without the State of Delaware. The books of the Corporation may be kept (subject to any provision contained in the Delaware statutes) outside the State of De1aware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
ARTICLE XI
No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (ii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit.
ARTICLE XII
The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware now existing or as such laws may hereafter be amended. I, THE UNDERSIGNED, being the incorporator hereinbefore named, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 6th day of March. 1995.
	/s/ JOHN M. DERRICK, JR. John M. Derrick, Jr. Incorporator
In the Presence of: /s/ Ellen Sheriff Rogers

CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF PEPCO SERVICES, INC.
It is hereby certified that: 1. The name of the Corporation (hereinafter called the "Corporation") is Pepco Services, Inc. 2. The certificate of incorporation of the Corporation is hereby amended by striking out Article 1 thereof and by substituting in lieu of said Article the following new Article: "The name of the Corporation is Pepco Energy Services, Inc." 3. The amendment of the certificate of incorporation herein certified has been duly adopted and written consent has been given in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware. Dated: June 7. 2000
	/s/ E. R. MAYBERRY E. R. Mayberry, Chief Executive Officer

PEPCO Services, Inc.

BY-LAWS

Article I

OFFICES

Section 1. The registered office of PEPCO Services, Inc. (hereinafter called the "Company") shall be in the City of Dover, County of Kent, State of Delaware.

Section 2. The Company may also have offices at other places both within and without the State of Delaware

ARTICLE II

MEETINGS OF SHAREHOLDERS

          Section 1.          The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the Board) and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

          Section 2.          A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Company or a shareholders or shareholders holding of record at least a majority of the share of Common Stock of the Company issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

          Section 3.          Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Company, or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

          Section 1.          The Board of Directors of the Company shall consist of not less than three and not more than six persons. The Directors need not be shareholders Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

          Section 2.          A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Company, or by these By-Laws, be the acts of the Board of Directors.

          Section 3.          (a)     Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                                    (b)     Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof .

                                    (c)     Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sale remaining director.

          Section 4.          (a)     As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article.

                                    (b)     Other meetings of the Board shall be held at times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                                    (c)     The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deem equivalent to notice.

                                   (d)     The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

          Section 5.          The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Company on all subjects touching the welfare of the Company and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

          Section 6.          Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

          Section 7.          Anyone or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means constitute presence in person at such meeting.

          Section 8.          The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the may Board authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

          Section 9.          Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to a Company officer, director or employee, the Company shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Company, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Company may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorneys' fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Company in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Company to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Company may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Company, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Company and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

          Section 1.          The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President, shall elect one or more Vice Presidents, a Secretary and a Treasurer, and from time to time may elect such Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

          Section 2.           The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Company will be served thereby. Such removal shall be without prejudice to contract rights, f any, of person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

          Section 3.          Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Company shall each have such authority and perform such duties in the management of the property, business and affairs of the Company as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

          Section 1.          The shares of the capital stock of the Company shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Company. In case any officer who has signed any certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Company with the same effect as if such officer had not ceased to hold such office at the time of its issue.

          Section 2.          The shares of the capital stock of the Company shall be transferable on the books of the Company by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Company or its agents may reasonably require.

          Section 3.          No certificate evidencing shares of the capital stock of the Company shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Company and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

          All checks and drafts on the Company's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Company shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Company's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

          All contracts, bonds and other agreements and undertakings of the Company shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

          Whenever any instrument is required by this Article to be signed by more than one officer of the Company, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Company shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

State of Delaware

Office of the Secretary of State

I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED-IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER, WHICH MERGES: "PENINK, INC.", A DELAWARE CORPORATION, WITH AND INTO "PEPCO ENTERPRISES, INC." UNDER THE NAME OF "PEPCO ENTERPRISES, INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE TWENTY-SEVENTH DAY OF APRIL, A.D. 2000, AT 9 O'CLOCK A.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

/s/ Edward J. Freel
Edward J. Freel, Secretary of State

AUTHENTICATION: 0406433

DATE: 04-27-00

CERTIFICATE OF MERGER

OF

PENINK, INC.

AND

PEPCO ENTERPRISES, INC.

It is hereby certified that:

1. The constituent business corporations participating in the merger herein certified are:

(i)

Penink, Inc., which is incorporated under the laws of the State of Delaware;

and

(ii)

Pepco Enterprises, Inc., which is incorporated under the laws of the State of Delaware.

            2.             An Agreement of Merger has been approved, adopted, certified, executed, and acknowledged by each of the aforesaid constituent corporations in accordance with the provisions of subsection (c) of Section 251 of the General Corporation Law of the State of Delaware.

            3.             The name of the surviving corporation in the merger herein certified is Pepco Enterprises, Inc., which will continue its existence as said surviving corporation under Potomac Capital Investment Corporation upon the effective date of said merger pursuant to the provisions of the General Corporation Law of the State of Delaware.

            4.             The Certificate of Incorporation of Pepco Enterprises Inc., as now in force and effect, shall continue to be the Certificate of Incorporation of said surviving corporation until amended and changed pursuant to the provisions of the General Corporation Law of the State of Delaware.

            5.             The executed Agreement of Merger between the aforesaid constituent corporations is on file at an office of the aforesaid surviving corporation, the address of which is as follows: 1801 K Street, N.W., Suite 900, Washington, D.C. 20006.

            6.             A copy of the aforesaid Agreement of Merger will be furnished by the aforesaid surviving corporation, on request, and without cost, to any stockholder of each of the aforesaid constituent corporations.

            7.             The Agreement of Merger between the aforesaid constituent corporations provides that the merger herein certified shall be effective on April 27, 2000.

PEPCO ENTERPRISES, INC.

Dated: April 26, 2000 By: /s/ Joy J. Dorsey
Joy J. Dorsey
Corprate Secretary

PEPCO ENTERPRISES, INC.

Consent of Shareholder to
Merger in Lieu of
Special Meeting of Shareholder

            The undersigned, being the sole shareholder of all of the outstanding shares of Capital Stock of Penink, Inc. (the "Company"), a Delaware corporation, does hereby consent to the taking of the following action without a meeting, and without notice of a vote pursuant to Section 228 of the Delaware Corporation Law and the By-Laws of the Corporation.

             WHEREAS , the Board of Directors of the Corporation has approved that certain Agreement and Plan of Merger, dated as of April 27, 2000 (the "Merger Agreement"), by and between the Company and Pepco Enterprises, Inc., a copy of which is attached hereto as Exhibit A.

NOW, THEREFORE, BE IT

             RESOLVED , that the proposed merger of the Company with and into Pepco Enterprises, Inc. and the Merger Agreement and the terms and conditions therein set forth and provided are hereby in all respects approved, adopted, authorized, and agreed to; and

             FURTHER RESOLVED , that the proper officers of the Company are hereby authorized and directed to do and perform all necessary acts and to make, execute, deliver and file all necessary documents to effectuate the merger of the Company with and into Pepco Enterprises, Inc. referred to in the foregoing resolution.

            This consent is effective as of the 26th day of April, 2000.

PEPCO ENTERPRISES, INC.

By: /s/ John D. McCallum
John.D. McCallum, Chairman

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (the "Agreement") is made and entered into as of April 28, 2000, between Pepco Enterprises, Inc., a Delaware corporation ("PEI") and Penink, Inc., a Delaware corporation ("Penink").

            WHEREAS, PEI is a corporation duly organized and validly existing under the laws of the State of Delaware, with an authorized Capital Stock consisting of 1,000 shares of Common Stock, par value $1.00 per share ("PEI Common Stock"), of which 1,000 shares were issued and outstanding on the date hereof, all of which shares are owned by Potomac Capital Investment Corporation, a Delaware corporation.

            WHEREAS, Penink is a corporation duly organized and validly existing under the laws of the State of Delaware, with an authorized Capital Stock consisting of 1,000 shares of Common Stock, par value $1.00 per share ("Penink Common Stock"), of which 1,000 shares were issued and outstanding on the date hereof, all of which shares are owned by and a wholly owned subsidiary of PEI.

            WHEREAS, the Boards of Directors of Penink and of PEI deem it advisable and in the best interest of their respective corporation and shareholder, that Penink merge with and into PEI upon the terms and conditions set forth in this Agreement and pursuant to the applicable laws of the State of Delaware, and the Boards of Directors of Penink and PEI have, by resolutions duly adopted, approved this Agreement and directed that the Agreement be submitted to the shareholders of Penink and of PEI for approval and adoption.

            NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and subject to the terms and conditions hereof, the parties agree as follows:

ARTICLE I

The Merger

1.1 The Merger . On the Effective Date of the Merger (as defined in Section 1.2 hereof), Penink shall be merged with and into PEI, which shall be the surviving company (the "Surviving Company"), and the separate existence and corporate organization of Penink shall cease (the "Merger"). The Surviving Company in accordance with Section 259 of the General Corporation Law of the State of Delaware shall possess all the rights, privileges, powers and franchises of a public as well as a private nature of each of Penink and PEI and be subject to all the restrictions, disabilities and duties of each of Penink and PEI; and all the rights, privileges, powers and franchises of the PEI and Penink and all property, real, personal and mixed, and all debts due to either entity on whatever account, as well as for stock subscriptions and all other things in action or belonging to either entity, shall be vested in the Surviving Company; and all property, rights, privileges, powers and franchises, and all and every other interest shall thereafter be as effectually the property of the Surviving Company as they were of Penink and PEI, and the title to any real estate, vested by deed or otherwise, in either entity shall not revert or be in any way impaired by reason of the Merger; but all rights of creditors and all liens upon any property of either of Penink and PEI shall be preserved unimpaired, and all debts, liabilities and duties shall thenceforth attach to and may be enforced against the Surviving Company to the same extent as if said debts, liabilities and duties had been incurred or contracted by it.

1.2 Effective Date of the Merger . The Merger shall become effective on April 27, 2000 (the "Effective Date"). The date on which the Merger becomes effective is herein called the "Effective Date."

ARTICLE II

Names, Articles of Incorporation, Bylaws, Officers
And Directors of the Surviving Company

            2.1             Name .       The Surviving Company shall be Pepco Enterprises, Inc.

            2.2             Articles of Incorporation .       The Articles of Incorporation of PEI as in effect on the Effective Date of the Merger shall be the Articles of Incorporation of the Surviving Company.

            2.3             Bylaws .       The Bylaws of PEI as in effect on the Effective Date of the Merger shall be the Bylaws of the Surviving Company.

            2.4             Directors and Officers .       The Directors and Officers of PEI immediately prior to the Effective Date shall continue as, respectively, the Directors and Officers of the Surviving Company and shall hold office from and after the Effective Date until their successors shall have been elected and qualified in accordance with the Bylaws of the Surviving Company.

ARTICLE III

Transfer of MERGED CORPORATION Assets
and Cancellation of MERGED CORPORATION Shares

3. Transfer of Penink Assets and Cancellation of Penink Shares . At the Effective Time, all assets owned by Penink, including its stock ownership in W.A. Chester, LLC and Energy & Telecommunications Services, LLC, will be transferred to the Surviving Company and by virtue of such transfer and by virtue of the Merger, and without any action on the part of the holder of the shares of PEI or of Penink, each share of common stock of Penink outstanding at the Effective Date shall automatically be cancelled and retired and shall cease to exist.

ARTICLE IV

Amendment and Termination

            4.1             Amendment .       At any time prior to the filing of a Certificate of Merger with the Secretary of State of the State of Delaware, this Agreement may be amended by the Boards of Directors of PEI and of Penink to the extent permitted by Delaware law notwithstanding favorable action on the merger by the shareholders of PEI or Penink.

            4.2             Termination .       At any time prior to the filing of a Certificate of Merger with the Secretary of State of the State of Delaware, this Agreement may be terminated and abandoned by the Boards of Directors of PEI or Penink, notwithstanding favorable action on the merger by the shareholder of PEI or Penink.

            IN WITNESS WHEREOF, PEI and Penink have caused this Agreement to be signed by their respective officers duly authorized as of the date first above written.

PEPCO ENTERPRISES, INC.

By:   /s/  John D. McCallum
Name:  John D. McCallum
Title:  Chairman

PENINK, INC.

By:   /s/  Steven M. Scherer
Name:   Steven M. Scherer
Title: Chairman

State of Delaware

Office of the Secretary of State

I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF.MERGER,-'-WHI-1CH. MERGES: "PEI MERGER CORPORAT-IONI1, A DELAWARE ,CORPORATION, WITH AND INTO "PEPCO ENTERPRISES, INC.'!-UUNDER THE NAME OF "PEPCO ENTERPRISES, INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE TWENTY-NINTH DAY-OF APRIL, A.D. 1996, AT 12:40 O' CLOCK P. M.

A CERTIFIED COPY OF-THIS CERTIIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF'DEEDS' FOR.RECORDING.

/s/ Edward J. Freel
Edward J. Freel, Secretary of State

AUTHENTICATION: 7927073
DATE: 04-30-96

CERTIFICATE OF MERGER
OF
PEI MERGER CORPORATION
INTO
PEPCO ENTERPRISES, INC.

The undersigned corporation organized under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY;

FIRST: That- the name and the state of incorporation of each of the constituent corporations of the merger is:

Name

State of Incorporation

PEPCO Enterprises, Inc.

Delaware

PEI Merger Corporation

Delaware

            SECOND:             That an agreement and plan of merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 251 of Title 8 of the General Corporation Law of the State of Delaware.

            THIRD:             That the name of the surviving corporation of the merger is PEPCO Enterprises, Inc.

            FOURTH:             That the Certificate of Incorporation of PEPCO Enterprises, Inc. shall be the Certificate of Incorporation of the surviving corporation.

            FIFTH:             That the executed agreement and plan of merger is on file at the principal place of business of the surviving corporation. The address of the principal place of business of the surviving corporation is Room 841, 1900 Pennsylvania Avenue, N.W., Washington, D.C. 2C068.

            SIXTH:             That a copy of the agreement and plan of merger will be furnished by the surviving corporation, on request and without cost, to any shareholder of either constituent corporation.

            SEVENTH:             That the Merger shall be effective as of 11:59 p.m. Eastern time on April 30, 1996.

            IN WITNESS WHEREOF, the surviving corporation has caused this certificate to be executed by its President and attested by its Secretary this f day of April, 1996.

ATTEST:

/s/  Ellen Sheriff Rogers
                Secretary

Dated:    April 24, 1996

PEPCO ENTERPRISES, INC.

By: /s/ John D. McCallum
President

STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 04/17/1996
960110665 - 2615801

CERTIFICATE OF INCORPORATION

OF

PEI Merger Corporation

The undersigned, for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:

ARTICLE I

The name of the corporation is PEI Merger Corporation.

ARTICLE II

The address of its registered office in the State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc.

ARTICLE III

The nature of the business or purposes to be conducted or promoted is:

To engage in any business approved by the Board of Directors for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE IV

The Corporation shall have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00).

ARITICLE V

The name and mailing address of the incorporator is as follows:

NAME
William D. Shapiro

MAILING ADDRESS
900 19 ^TH Street, N. W.
Washington, D. C. 20006

ARTICLE VI

Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.

ARTICLE VII

The corporation is to have perpetual existence.

ARTICLE VIII

In furtherance and not in limitation of the power conferred by statute, the Board of Directors shall have the power to adopt, amend, alter and repeal the By- Laws of the Corporation.

ARTICLE IX

Meetings of stockholders may be held within or without the State of Delaware. The books of the Corporation may be kept (subject to any provision contained in the Delaware statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.

ARTICLE X

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

ARTICLE XI

No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit.

ARTICLE XII

The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware now existing or as such laws may hereafter be amended.

I, THE UNDERSIGNED, being the incorporator hereinbefore named, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this it-day of April, 1996.

/s/ William D. Shapiro
William D. Shapiro
Incorporator

In the Presence of: /s/ Ellen Sheriff Rogers

State of Delaware
Office of the Secretary of State

I, EDWARD J. FREED, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF CHANGE OF REGISTERED AGENT OF PEPCO ENTERPRISES, INC., FILED IN THIS OFFICE ON THE TWENTIETH DAY OF FEBRUARY, A.D. 1996, AT 9.0 O'CLOCK A.M.

A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECOREDER OF DEEDS FOR RECORDING.

/s/ Edward J. Freel
Edward J. Freel, Secretary of State

AUTHENTICATION:7833445
DATE: 02-21-96

CERTIFICATE OF CHANGE OF REGISTERED AGENT

AND

REGISTERED OFFICE

* * * *

            PEPCO Enterprises, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

            DOES HEREBY CERTIFY:

            The present registered agent of the corporation is Delaware Corporate Management, Inc. and the present registered office of the corporation is in the County of New Castle.

            The Board of Directors of PEPCO Enterprises, Inc. adopted the following resolution on the 24th day of January 1996.

            RESOLVED, that the officers of the Company be, and hereby are, authorized to take such actions as required to appoint and designate, effective March 1, 1996, The Prentice-Hall Corporation System, Inc.,1013 Centre Road, Wilmington, New Castle County, Delaware 19805 as Registered Agent of the Company in the State of Delaware, pursuant to the DEL. CODE ANN., tit. 8, Section 133 (1953 as amended).

            IN WITNESS WHEREOF, PEPCO Enterprises, Inc. has caused this statement to be signed by John D. McCallum, its President and attested by Ellen Sheriff Rogers, its Secretary, this 15h day of February, 1996.

ATTEST:

By: /s/ Ellen Sheriff Rogers
Secretary

By: /s/ John D. McCallum
President

STATE OF DELAWARE

OFFICE OF SECRETARY OF STATE

I, GLENN C. KENTON, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF CHANGE OF REGISTERED AGENT/OFFICE OF PEPCO ENTERPRISES, INC. FILED IN THIS OFFICE ON THE FOURTEENTH DAY OF DECEMBER, A.D. 1984, AT 12 O'CLOCK P.M.

  /s/  Glenn C. Kenton
Glenn C Kenton, Secretary of State

AUTHENTICATION:    0396982

DATE:  24/14/1984

CERTIFICATE-:OF CHANGE OF REGISTERED AGENT

AND

REGISTERED OFFICE

            PEPCO Enterprises, Inc., a corporation organized and existing under and by-virtue of the General Corporation Law of the State of Delaware,

            DOES HEREBY CERTIFY:

            The present registered agent of the corporation is Wilmington Trust Company and the present registered office of the corporation is in the County of New Castle.

            The Board of Directors of PEPCO, Enterprises, Inc. adopted the following resolution on the 19th day of November 1984.

            RESOLVED, that the appropriate officers of the Corporation are authorized to take such steps as may be necessary or convenient to amend the Certificate of Incorporation to provide that the registered office of the Corporation shall be established and maintained at 1100 North Market Street, in the City of Wilmington, State of Delaware, and in order to provide that the name of the registered agent at such address is Financial Services, (Delaware), Inc.

            IN WITNESS WHEREOF, PEPCO Enterprises, Inc. has caused this statement to be signed by Paul Dragoumis, its President and attested by Thomas E. O'Dea, its Secretary, this 4th day of December, 1984.

STATE OF DELAWARE

OFFICE OF SECRETARY OF STATE

I, GLENN C. KENTON, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF CHANGE OF REGISTERED AGENT/OFFICE OF PEPCO ENTERPRISES, INC, FILED IN THIS OFFICE ON THE TWENTIETH DAY OF JUNE, A.D. 1984, AT 10 O' CLOCK A.M.

/s/ Glenn C. Kenton
Glenn C. Kenton, Secretary of State

AUTHENTICATION :0270924
DATE: 06/20/1984

CERTIFICATE OF-CHANGE OF REGISTERED AGENT
AND
REGISTERED OFFICE

* * * *

            PEPCO Enterprises, Inc., a corporation organized and existing under and by virture of the General Corporation Law of the State of Delaware,

            DOES HEREBY CERTIFY:

            The present registered agent of the corporation is The Corporation Trust Company and the present registered office of the corporation is in the County of New Castle.

            The Board of Directors of PEPCO Enterprises, Inc. adopted the following resolution on the 30th day of November, 1983.

            On motion duly adopted, it was

            RESOLVED, that the appropriate officers of the Corporation are authorized to take such steps as may be necessary or convenient to amend the Certificate of Incorporation to provide that the registered office of the Corporation shall be established and maintained at 1100 North Market Street, in the City of Wilmington, State of Delaware, and in order to provide that the name of the registered agent at such address is Wilmington Trust Company.

            IN WITNESS WHEREOF, PEPCO Enterprises, Inc. has caused this statement to be signed by Paul Dragoumis, its President and attested by Thomas E. O'Dea, its Secretary, this 18th day of June, 1984.

BY /s/ Paul Dragoumis
President

ATTEST:

By /s/ Thomas E. O'Dea

Secretary

STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE

I, GLENN C. KENTON, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFIY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF PEPCO ENTERPRISES, INC. FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF JUNE, A.D. 1983, AT 10 O' CLOCK A.M.

  /s/  Glenn C. Kenton
Glenn C. Kenton, Secretary of State

AUTHENTICATION             0009389
DATE:  06/24/1983

CERTIFICATE OF INCORPORATION
OF
PEPCO Enterprises, Inc.

            1.             The name of the corporation is:

                                    PEPCO Enterprises, Inc.

            2.             The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

            3.             The nature of the business or purposes to be conducted or promoted is:

            To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

            4.             The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00).

            5A.             The name and mailing address of each incorporator is as follows

NAME

MAILING ADDRESS

V. A. Kasowski

100 West Tenth Street
Wilmington, Delaware 19801

D. L. Sipple

100 West Tenth Street
Wilmington, Delaware 19801

M. C.Kinnamon

100 West Tenth Street
Wilmington Delaware 19801

5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows:

NAME

MAILING ADDRESS

H. Lowell Davis

1900 Pennsylvania Avenue, N.W.
Suite 803
Washington, D.C. 20068

            6.             The corporation is to have perpetual existence.

            7.             In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:

            To make, alter or repeal the by-laws of the corporation.

            8.             Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide.

            9.             The corporation reserves the right to amend, alter, (change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by L statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

            WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 15th day of June, 1983.

/s/  V. A. Kasowski
      V. A. Kasowski

/s/  D. L. Sipple
      D. L. Sipple

/s/  M. C. Kinnamon
M. C. Kinnamon

By-Laws

of

PEI Merger Corporation

(a Delaware corporation)

April 24, 1996

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

PEI Merger Corporation

BY-LAWS

Article I

OFFICES

Section 1. The registered office of PEI Merger Corporation (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

ARTICLE II

MEETINGS OF SHAREHOLDERS

            Section 1.             The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the Board) and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

            Section 2.             A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholders or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

            Section 3.             Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

            Section 1.             The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or-until his earlier death or resignation or removal in the manner hereinafter provided.

            Section 2.             A majority of the Board shall constitute a quorum for, the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

            Section 3.               (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                   (b)             Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof.

                   (c)             Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

            Section 4.               (a) As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article.

                   (b)             Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                   (c)             The Secretary shall give notice to each director-of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the. day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                   (d)             The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

                  Section 5.             The-Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

                  Section 6.             Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

                  Section 7.             Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

                  Section 8.             The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee-shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

            Section 9.             Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorneys' fees), judgments, fines and amounts paid in connection with the resolution of a Suit, .whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

            Section 1.             The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

            Section 2.             The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

            Section 3.             Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

            Section 1.             The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

            Section 2.             The shares of the capital stock of the Corporation shall be transferrable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

            Section 3.             No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

            All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

            All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

            Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 04/30/1999
991172417 - 3037330

CERTFICATE OF FORMATION

PEPCO TECHNOLOGIES LLC

The undersigned, an authorized natural person, for the purpose of forming a limited liability company, under the provisions and subject to the requirements of the State of Delaware (particularly Chapter 18, Title 6 of the Delaware Code and the acts amendatory thereof and supplemental thereto, and known, identified, and referred to as the "Delaware Limited Liability Company Act"), hereby certifies that:

The name of the limited liability company (hereinafter called the "limited liability company") is Pepco Technlogies LLC.

The address of the registered office and the name and the address of the registered agent of the limited liability company required to be maintained by Section 18-104 of the Delaware Limited Liability Company Act are Corporation Service Company, 1013 Centre Road, Wilmington, County of Newcastle, Delaware 19805.

Executed on April 23, 1999

/s/ LESLIE C. ZIMBERG
Leslie C. Zimberg
Authorized Person

LIMITED LIABILITY COMPANY AGREEMENT OF

PEPCO TECHNOLOGIES, LLC

AS OF JANUARY 2, 2002

LIMITED LIABILITY COMPANY AGREEMENT

FOR

Pepco Technologies, LLC

This Limited Liability Company Agreement (this "Agreement") of Pepco Technologies, LLC (the "Company") is made by Potomac Capital Investment Corporation (the "Member"), a Delaware corporation and the sole member of the Company.

WHEREAS, the Member has formed the company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, et seq, as amended from time to time (the "Act"), and hereby agrees as follows:

1. Name . The name of the Company is Pepco Technologies, LLC.

2. Term. The term of the Company commenced on April 13, 1999 with the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Act and shall continue until dissolution and termination of the Company in accordance with Section 21 hereof.

3. Purpose . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby authorized to:

(a) acquire by purchase, lease, contribution of property or otherwise, own, hold, sell, convey, transfer or dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company;

(b) act as a trustee, executor, nominee, bailee, director, officer, agent or in some other fiduciary capacity for any person or entity and to exercise all of the powers, duties, rights and responsibilities associated therewith;

(c) take any and all actions necessary, convenient or appropriate as trustee, executor, nominee, bailee, director, officer, agent or other fiduciary, including the granting or approval of waivers, consents or amendments of rights or powers relating thereto and the execution of appropriate documents to evidence such waivers, consents or amendments,

(d) operate, purchase, maintain, finance, improve, own, sell, convey, assign, mortgage, lease or demolish or otherwise dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company;

(e) borrow money and issue evidences of indebtedness in furtherance of any or all of the purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the Company;

(f) invest any funds of the Company pending distribution or payment of the same pursuant to the provisions of this Agreement and open and maintain checking and savings accounts with banks and savings institutions;

(g) prepay in whole or in part, refinance, recast, increase, modify or extend any indebtedness of the Company and, in connection therewith, execute any extensions, renewals or modifications of any mortgage or security agreement securing such indebtedness;

(h) enter into, perform and carry out contracts of any kind, including, without limitation, contracts with the Member or any person or entity affiliated with the Member, necessary to, in connection with, convenient to, or incidental to the accomplishment of the purpose of the Company;

(i) employ or otherwise engage employees, managers, contractors, advisors, attorneys and consultants and pay reasonable compensation for such services;

(j) enter into partnerships, limited liability companies, trusts, associations, corporations or other ventures with other persons or entities in furtherance of the purpose of the Company; and

(k) do such other things and engage in such other activities related to the foregoing as may be necessary, convenient or incidental to the conduct of the business of the Company, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act.

5. Principal Business Office . The principal business office of the Company shall be located at 1801 K Street, N.W., Suite 900, Washington, D.C. 20006, or any other location as may hereafter be determined by the Member.

6. Registered Office . The address of the registered office of the Company in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, DE 19808.

7. Registered Agent . The name of the registered agent of the Company for service of process on the Company in the State of Delaware is Corporation Service Company.

8. Member . The name and mailing address of the Member are Potomac Capital Investment Corporation, 1801 K Street, N.W., Suite 900, Washington, D.C. 20006.

9. Limited Liability . Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or. otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

10. Contributions. The Member is not required to make any capital contribution to the Company. However, the Member may make capital contributions to the Company at any time.

11. Allocation of Profits and Losses . The Company's profits and losses shall be allocated to the Member.

12. Distributions . Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other applicable law.

13. Management.

(a) The business and affairs of the Company shall be managed under the direction and control of a management committee (the "Management Committee"), which shall consist of at least two (2) individuals, who need not be Members. The Management Committee initially shall consist of the following person: John D. McCallum.

(b) All powers of the Company shall be exercised by or under the authority of the Management Committee. Decisions of the Management Committee within its scope of authority shall be binding upon the Company and the Member.

(c) Meetings of the Management Committee shall be held at the principal place of business of the Company or at any other place that a majority of the members of the Management Committee determine. In the alternative, meetings may be held by conference telephone, provided that each member of the Management Committee can hear the-others. The presence of at least two (2) of the members of the Management Committee shall constitute a quorum for the transaction of business. Meetings shall be held once each month, or otherwise in accordance with a schedule established by the Management Committee. In addition, any member of the Management- Committee may convene a meeting thereof upon at least two (2) business days' prior written notice to the other members. The Management Committee shall act at meetings by majority vote. The Management Committee also may make decisions, without holding a meeting, by written consent of a majority of the members of the Management Committee. Minutes of each meeting and a record of each decision shall be kept by the designee of the Management Committee and shall be given to the Member promptly after the meeting or decision.

(d) Except as otherwise determined by the Member, the members of the Management Committee shall serve without compensation from the Company.

(e) The Member, with or without cause, at any time and from time to time and for any reason, may remove any member of the Management Committee then acting and appoint a new member of the Management Committee.

14. Officers.

(a) The Management Committee may, from time to time as it deems advisable, appoint officers of the Company (the "Officers") and assign in writing titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Management Committee decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. The Officers shall be subject to the general supervision and control of the Management Committee and shall carry out the policy decisions made by the members of the Management Committee. At each regular meeting of the Management Committee (and, when requested by any member thereof, at any special meeting of the Management Committee), the President or other appropriate Officers shall be present and shall report to the Management Committee on the operations of the Company or any other matters as any member of the Management Committee may request. Any delegation pursuant to this Section 14 may be revoked at any time by the Management Committee. An Officer may be removed with or without cause by the Management Committee.

(b) At the direction of the Management Committee, the President and other appropriate Officers shall have the full power to perform any act that an "authorized person" may perform under the Act, and to execute, for and on behalf of the Company, any and all documents and instruments which may be necessary to carry on the business of the Company, including, without limitation, any and all deeds, contracts, leases, mortgages, deeds of trust, promissory notes, guarantees, security agreements, and financing statements pertaining to the Company's assets or obligations. No person dealing with the President or any other Officer need inquire into the validity or propriety of any document or instrument executed in the name of the Company by the President or other Officer, or as to the authority of the President or other Officer in executing the same.

15. Other Business . The Member may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind -and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

16. Exculpation and Indemnification . No member of the Management Committee or Officer (each of whom is hereinafter referred to as a "Manager") shall be liable to the Company or the Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that a Manager shall be liable for any such loss, damage or claim incurred by reason of such Manager's willful misconduct. To the full extent permitted by applicable law, a Manager shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Manager by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that no Manager shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Manager by reason of willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 16 shall be provided out of and to the extent of Company assets only, and the Member shall have no personal liability on account thereof.

17. Assignments . The Member may assign in whole or in part its interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 17, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer.

18. Resignation . The Member may resign from the Company; provided, that in the event of such resignation an additional member of the Company shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the Member's resignation, and, immediately following such admission, the Member shall cease to be a member of the Company.

19. Admission of Additional Members. One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

20. Dissolution .

(a) The Company shall have a perpetual existence; provided, however that the Company shall dissolve, and its affairs shall be wound up, upon the occurrence of either of the following: (i) the written consent of the Member, or (ii) the retirement, resignation or dissolution of the Member or the occurrence of any other event which terminates the continued membership of the Member in the Company unless the business of the Company is continued in a manner permitted by the Act.

(b) The bankruptcy of the Member will not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.

(c) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

21. Separability of Provisions . Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.

22. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

23. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws.

24. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

CERTFICATE OF FORMATION OF PepMarket.com, LLC
The undersigned, an authorized natural person, for the purpose of forming a limited liability company, under the provisions and subject to the requirements of the State of Delaware (particularly Chapter 18, Title 6 of the Delaware Code and the acts amendatory thereof and supplemental thereto, and known, identified, and referred to as the "Delaware Limited Liability Company Act"), hereby certifies that: The name of the limited liability company (hereinafter called the "limited liability company") is PepMarket.com, LLC. The address of the registered office and the name and the address of the registered agent of the limited liability company required to be maintained by Section 18-104 of the Delaware Limited Liability Company Act are Corporation Service Company, 1013 Centre Road, City of Wilmington, County of New Castle, Delaware 19805. Executed on August 22, 2000
	/s/ Joy J. Dorsey Joy J. Dorsey Corporation Secretary Authorized Person

RESTATED AND AMENDED LIMITED LIABILITY COMPANY AGREEMENT FOR PEPMARKET.COM, LLC September 7, 2000
RESTATED AND AMENDED LIMITED LIABILITY COMPANY AGREEMENT FOR PEPMARKET.COM, LLC
This Limited Liability Company Agreement (this "Agreement") of PepMarket.com, LLC (the "Company") is made by Pepco Holdings, Inc. (the "Member"), a Delaware corporation and the sole member of the Company. WHEREAS, the Member has formed the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, et seq , as amended from time to time (the "Act"), and hereby agrees as follows: 1. Name . The name of the Company is PepMarket.com, LLC. 2. Term . The term of the Company will commence on August 22, 2000 with the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Act and shall continue until dissolution and termination of the Company in accordance with Section 20 hereof. 3. Purpose . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act. 4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby authorized to: (a) acquire by purchase, lease, contribution of property or otherwise, own, hold, sell, convey, transfer or dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (b) act as a trustee, executor, nominee, bailee, director, officer, agent or in some other fiduciary capacity for any person or entity and to exercise all of the powers, duties, rights and responsibilities associated therewith; (c) take any and all actions necessary, convenient or appropriate as trustee, executor, nominee, bailee, director, officer, agent or other fiduciary, including the granting or approval of waivers, consents or amendments of rights or powers relating thereto and the execution of appropriate documents to evidence such waivers, consents or amendments; (d) operate, purchase, maintain, finance, improve, own, sell, convey, assign, mortgage, lease or demolish or otherwise dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (e) borrow money and issue evidences of indebtedness in furtherance of any or all of the purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the Company; (f) invest any funds of the Company pending distribution or payment of the same pursuant to the provisions of this Agreement and open and maintain checking and savings accounts with banks and savings institutions; (g) prepay in whole or in part, refinance, recast, increase, modify or extend any indebtedness of the Company and, in connection therewith, execute any extensions, renewals or modifications of any mortgage or security agreement securing such indebtedness; (h) enter into, perform and carry out contracts of any kind, including, without limitation, contracts with the Member or any person or entity affiliated with the Member, necessary to, in connection with, convenient to, or incidental to the accomplishment of the purpose of the Company; (i) employ or otherwise engage employees, managers, contractors, .advisors, attorneys and consultants and pay reasonable compensation for such services; (j) enter into partnerships, limited liability companies, trusts, associations, corporations or other ventures with other persons or entities in furtherance of the purpose of the Company; and (k) do such other things and engage in such other activities related to the foregoing as may be necessary, convenient or incidental to the conduct of the business of the Company, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act. 5. Principal Business Office . The principal business office of the Company shall be located at 1801 K Street, N.W., Suite 900, Washington, D.C. 20006, or any other location as may hereafter be determined by the Member. 6. Registered Office . The address of the registered office of the Company in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, DE 19808. 7. Registered Agent . The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, DE 19808. 8. Member . The name and mailing address of the Member are Pepco Holdings, Inc., 1801 K Street, N.W., Suite 900, Washington, D.C. 20006. 9. Limited Liability. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company. 10. Contributions . The Member is not required to make any capital contribution to the Company. However, the Member may make capital contributions to the Company at any time. 11. Allocation of Profits and Losses . The Company's profits and losses shall be allocated to the Member. 12. Distributions . Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other applicable law. 13. Management . (a) The business and affairs of the Company shall be managed under the direction and control of a management committee (the "Management Committee"), which shall consist of at least two (2) individuals, who need not be Members. The Management Committee initially shall consist of the following persons: John M. Derrick, Jr., William Dana Shapiro, William T. Torgerson, and Dennis R. Wraase. (b) All powers of the Company shall be exercised by or under the authority of the Management Committee. Decisions of the Management Committee within its scope of authority shall be binding upon the Company and the Member. (c) Meetings of the Management Committee shall be held at the principal place of business of the Company or at any other place that a majority of the members of the Management Committee determine. In the alternative, meetings may be held by conference telephone, provided that each member of the Management Committee can hear the others. The presence of at least two (2) of the members of the Management Committee shall constitute a quorum for the transaction of business. Meetings shall be held in accordance with a schedule established by the Management Committee. In addition, any member of the Management Committee may convene a meeting thereof upon at least two (2) business days' prior written notice to the other members. The Management Committee shall act at meetings by majority vote. The Management Committee also may make decisions, without holding a meeting, by written consent of a majority of the members of the Management Committee. Minutes of each meeting and a record of each decision shall be kept by the designee of- the Management Committee and shall be given to the Member promptly after the meeting or decision. (d) Except as otherwise determined by the Member, the members of the Management Committee shall serve without compensation from the Company. (e) The Member, with or without cause, at any time and from time to time and for any reason, may remove any member of the Management Committee then acting and appoint a new member of the Management Committee. 14. Officers . (a) The Management Committee may, from time to time as it deems advisable, appoint officers of the Company (the "Officers") and assign in writing titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Management Committee decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. The Officers shall be subject to the general supervision and control of the Management Committee and shall carry out the policy decisions made by the members of the Management Committee. At each regular meeting of the Management Committee (and, when requested by any member thereof, at any special meeting of the Management Committee), the President or other appropriate Officers shall be present and shall report to the Management Committee on the operations of the Company or any other matters as any member of the Management Committee may request. Any delegation pursuant to this Section 14 may be revoked at any time by the Management Committee. An Officer may be removed with or without cause by the Management Committee. (b) At the direction of the Management Committee, the President and other appropriate Officers shall have the full power to perform any act that an "authorized person" may perform under the Act, and to execute, for and on behalf of the Company, any and all documents and instruments which may be necessary to carry on the business of the Company, including, without limitation, any and all deeds, contracts, leases, mortgages, deeds of trust, promissory notes, guarantees, security agreements, and financing statements pertaining to the Company's assets or obligations. No person dealing with the President or any other Officer need inquire into the validity or propriety of any document or instrument executed in the name of the Company by the President or other Officer, or as to the authority of the President or other Officer in executing the same. (c) The Management Committee has appointed the following persons as Officers: Dennis R. Wraase, Chairman and Chief Executive Officer; James J. Demarest, Jr., President and Chief Operating Officer; William Dana Shapiro, Senior Vice President and General Counsel; Joy J. Dorsey, Corporate Secretary and Deputy General Counsel; and, Richard Battista, Controller. 15. Other Business . The Member may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement. 16. Indemnification . The Company shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit; or proceeding, whether or not by or in the right of the Company, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a Manager, officer or employee of the Company, or is or was serving at the request of the Company as a Manager, director, officer, employee or agent of another Limited Liability Company, corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification of the Manager, officer, employee or agent is proper in the circumstances. The Company may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include expenses (including attorneys' fees), judgment, fines and amounts paid in settlement. In the manner provided by law, any such expenses shall be paid by the Company in advance of the final disposition of such action, suit or proceeding and the repayment of such advancements will be required only if it shall ultimately be determined that the Manager, officer, employee or agent who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Company to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Company may be entitled under any agreement, vote of Member(s) or disinterested Managers, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. 17. Assignments . The Member may assign in whole or in part its interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 17, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer. 18. Resignation . The Member may resign from the Company; provided, that in the event of such resignation an additional member of the Company shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the Member's resignation, and, immediately following such admission, the Member shall cease to be a member of the Company. 19. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member. 20. Dissolution . (a) The Company shall have a perpetual existence; provided, however that the Company shall dissolve, and its affairs shall be wound up, upon the occurrence of either of the following: (i) the written consent of the Member, or (ii) the retirement, resignation or dissolution of the Member or the occurrence of any other event which terminates the continued membership of the Member in the Company unless the business of the Company is continued in a manner permitted by the Act. (b) The bankruptcy of the Member will not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution. (c) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act. 21. Separability of Provisions . Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal. 22. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof. 23. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws. 24. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member. IN WITNESS WHEREOF, the undersigned, intending to be legally bound thereby, has duly executed this Agreement as of the September 7, 2000.
	PEPCO HOLDINGS, INC. By: /s/ D. R. Wraase Dennis R. Wraase Chairman of the Board and Chief Executive Officer

B Y L A W S

OF

PHI OPERATING SERVICES COMPANY

                   (b)       whenever any corporate action other than the election of Directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or by proxy at a meeting of stockholders and entitled to vote on the subject matter.

            3.7             Manner of Voting . At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Each stockholder shall be entitled to vote each share of stock having voting power registered in his or her name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting.

            3.8             Stockholder Action Without a Meeting. Except as otherwise provided by law or by the Certificate of Incorporation, any action required to be taken at any meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of the holders to take the action were delivered to the Corporation.

            3.9             Proxies . (a) At any meeting of stockholders, any stockholder may be represented and vote by proxy or proxies. In the event that any form of proxy shall designate two or more persons to act as proxies, a majority of such persons present at the meeting or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by the form of proxy upon all of the persons so designated unless the form of proxy shall otherwise provide.

                   (b)       The Board of Directors may, in advance of any annual or special meeting of the stockholders, prescribe additional regulations concerning proxies and the validation of the same, which are intended to be voted at any such meeting.

            3.10             Presiding Officer and Secretary . The Chairman of the Board shall act as chairman of all meetings of the stockholders. In the absence of the Chairman of the Board, the Vice Chairman of the Board or, in his or her absence, any Director designated by the Chairman of the Board or the Board of Directors shall act as chairman of the meeting.

            The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 5.11(b) of these Bylaws shall act as secretary of all meetings of the stockholders, but in the absence of a designated Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

            3.11             Procedure . At each meeting of stockholders, the chairman of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting and shall determine the order of business and all other matters of procedure. Except to the extent inconsistent with any such rules and regulations as adopted by the Board of Directors, the chairman of the meeting may establish rules, which need not be in writing, to maintain order and safety and for the conduct of the meeting. Without limiting the foregoing, he or she may:

                   (a)       restrict attendance at any time to bona fide stockholders of record and their proxies and other persons in attendance at the invitation of the chairman;

                   (b)       restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting;

                   (c)       adjourn the meeting without a vote of the stockholders, whether or not there is a quorum present; and

                   (d)       make rules governing speeches and debate, including time limits and access to microphones.

The chairman of the meeting shall be entitled to act in his or her absolute discretion and his or her rulings shall not be subject to appeal.

4.              DIRECTORS .

            4.1             Powers and Number . The Board of Directors shall exercise all of the powers of the Corporation except such as are by law, or by the Certificate of Incorporation of this Corporation or by these Bylaws conferred upon or reserved to the stockholders of any class or classes. The number of directors that shall constitute the whole Board of Directors shall be no fewer than three (3) and no greater than nine (9), the exact number of directors to be determined from time to time by resolution adopted by the Board of Directors or the stockholders, and until otherwise determined by the Board of Directors or the stockholders, the number of directors that shall constitute the whole Board of Directors shall be three (3).

            4.1             Resignations . Any Director may resign at any time by giving written notice to the Board of Directors or the Secretary. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective.

            4.2             Presiding Officer and Secretary . The Chairman of the Board shall act as chairman of all meetings of the Board of Directors. In the absence of the Chairman of the Board, the Vice Chairman of the Board, or in the Vice Chairman's absence, the Chief Executive Officer or other person designated by the Board of Directors shall act as chairman of the meeting.

            The Secretary of the Corporation shall act as secretary of all meetings of the Board of Directors, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 5.11(b) of these Bylaws shall act as secretary of all meetings of the Board of Directors, but in the absence of a designated Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

            4.3             Annual Meetings . The Board of Directors shall meet each year immediately following the annual meeting of stockholders, at the place where such meeting of stockholders has been held, or at such other place as shall be fixed by the person presiding over the meeting of the stockholders, for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation. In the event that in any year Directors are elected by written consent in lieu of an annual meeting of stockholders, the Board of Directors shall meet in such year as soon as practicable after receipt of such written consent by the Corporation at such time and place as shall be fixed by the Chairman of the Board, for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation.

            4.4             Regular Meetings . Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the state of Delaware, as shall from time to time be determined by the Board of Directors. In the absence of any such determination, such meetings shall be held at such times and places, within or without the State of Delaware, as shall be designated by the Chairman of the Board on not less than twelve hours notice to each Director, given verbally, in writing or electronically, whether personally, by telephone (including by message or recording device), by facsimile transmission, by telegram, by telex, by electronic mail or by other electronic means, or on not less than three (3) calendar days' notice to each Director given by mail. Notice given by any of the foregoing means shall be sufficient to constitute notice of a meeting without the necessity of further notice.

            4.5             Special Meetings . Special meetings of the Board of Directors shall be held at the call of the Chairman of the Board at such times and places, within or without the State of Delaware, as he or she shall designate, on not less than twelve hours notice to each Director, given verbally, in writing or electronically, whether personally, by telephone (including by message or recording device), by facsimile transmission, by telegram, by telex, by electronic mail or by other electronic means or on not less than three (3) calendar days' notice to each Director given by mail. Notice given by any of the foregoing means shall be sufficient to constitute notice of a meeting without the necessity of further notice. Special meetings shall be called by the Secretary on like notice at the written request of a majority of the Directors then in office.

            4.6             Quorum and Powers of a Majority . At all meetings of the Board of Directors and of each committee thereof, a majority of the members shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the members present at any meeting at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of law, of the Certificate of Incorporation, or of these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present.

            4.7             Waiver of Notice . Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing, whether before or after such meeting is held, or if he or she shall sign the minutes or attend the meeting, except that if such Director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such Director shall not be deemed to have waived notice of such meeting.

            4.8             Manner of Acting . (a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

                   (b)       Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writings are filed with the minutes of proceedings of the Board of Directors or such committee.

            4.9             Compensation . (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors.

                   (b)       Each Director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof.

                   (c)       Nothing contained in these Bylaws shall be construed to preclude any Director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.

            4.10             Committees . The Board of Directors (or any committee thereof having the power and authority to do so) may designate one or more committees, each committee to consist of one or more Directors, which to the extent provided in the resolution or resolutions designating such committee shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the corporation; provided, however, that no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporation Law of Delaware (the "GCLD") to be submitted to stockholders for approval or (ii) adopting, amending, or repealing any bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member of members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of such absent or disqualified director.

            4.11             Committee Procedure, Limitations of Committee Powers . (a) Except as otherwise provided by these Bylaws, each committee shall adopt its own rules governing the time, place and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 4.6 of these Bylaws with respect to notices of special meetings of the Board of Directors.

                   (b)       Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required.

                   (c)       Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee shall be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee.

5.              OFFICERS .

            5.1             Number . (a) The officers of the Corporation shall include a Chief Executive Officer, a President, one or more Vice Presidents (including one or more Executive Vice Presidents and one or more Senior Vice Presidents if deemed appropriate by the Board of Directors), a Chief Financial Officer, a Secretary, a Treasurer, and a Controller. The Board of Directors shall also elect a Chairman of the Board and may elect a Vice Chairman of the Board. Except for the Chairman of the Board, the Vice Chairman of the Board, and the Chief Executive Officer, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the GCLD.

                   (b)       The Chief Executive Officer shall have the power to appoint one or more employees of the Corporation as divisional or departmental vice presidents and fix the duties of such appointees. However, no such divisional or departmental vice president shall be considered an officer of the Corporation.

            5.2             Election of Officers, Qualification and Term . The Chief Executive Officer, the President, any Executive Vice President, any Senior Vice President, the Chief Financial Officer, the Secretary and the Treasurer of the Corporation shall be elected from time to time by the Board of Directors and, except as may otherwise be expressly provided in a contract of employment duly authorized by the Board of Directors, shall hold office at the pleasure of the Board of Directors. The Board of Directors and the Chief Executive Officer also may elect such other officers as the Board of Directors or the Chief Executive Officer may from time to time deem appropriate or necessary.

            5.3             Removal . Any officer elected by the Board of Directors may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the Chairman of the Board or the Chief Executive Officer, by the Chairman of the Board or the Chief Executive Officer.

            5.4             Resignations . Any officer of the Corporation may resign at any time by giving written notice to the Board of Directors or to the Chairman of the Board or to the Chief Executive Officer. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

            5.5             Compensation . The compensation of all officers of the Corporation shall be fixed by or in the manner provided by the Board of Directors from time to time, and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a Director of the Corporation.

            5.6             The Chairman of the Board . The Chairman of the Board shall have the powers and duties customarily and usually associated with the office of the Chairman of the Board and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. The Chairman of the Board shall preside at meetings of the stockholders and of the Board of Directors.

            5.7             Vice Chairman of the Board . The Vice Chairman of the Board, if any, shall have the powers and duties customarily and usually associated with the office of the Vice Chairman of the Board and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors.

            5.8             Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction and management of the affairs and business of the Corporation usually vested in the chief executive officer of a corporation, including, without limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. If at any time the offices of the Chairman of the Board and the Vice Chairman of the Board shall not be filled, or in the event of the temporary absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall have the powers and duties of the Chairman of the Board.

            5.9             The President . The President shall serve as chief operating officer, shall have the powers and duties customarily and usually associated with the office of the President and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            5.10             The Vice Presidents . Each Vice President shall have such powers and duties customarily and usually associated with the office of Vice President and shall have such other powers and perform such other duties as may from time to time be assigned to him or her by the Board of Directors, the Chief Executive Officer, or the President.

            5.11             The Chief Financial Officer . The Chief Financial Officer shall be responsible for the financial affairs of the Corporation, including overseeing the duties performed by the Treasurer of the Corporation. In addition, the Chief Financial Officer shall have such powers and duties customarily and usually associated with the office of the Chief Financial Officer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            5.12             The Secretary and the Assistant Secretary . (a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. In addition, the Secretary shall have such powers and duties customarily and usually associated with the office of Secretary and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors, the Chief Executive Officer, or the President.

                   (b)       Each Assistant Secretary shall have such powers and perform such duties customarily and usually associated with the office of Assistant Secretary and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President, or the Secretary. In case of the absence or disability of the Secretary, the Assistant Secretary designated by the Chief Executive Officer (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary.

            5.13             The Treasurer and the Assistant Treasurer . (a) The Treasurer shall have custody of the Corporation's funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall also maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall see that adequate audits thereof are currently and regularly made. In addition, the Treasurer shall have such powers and duties customarily and usually associated with the office of Treasurer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President or the Chief Financial Officer.

                   (b)       Each Assistant Treasurer shall have such powers and perform such duties customarily and usually associated with the office of Assistant Treasurer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President, or the Treasurer. In case of the absence or disability of the Treasurer, the Assistant Treasurer designated by the Chief Executive Officer (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.

            5.14             Controller . The Controller shall be responsible for maintaining the accounting records and statements, and shall properly account for all monies and obligations due the Corporation and all properties, assets, and liabilities of the Corporation. The Controller shall render to the Chairman of the Board, the President or the Chief Financial Officer such periodic reports covering the results of operations of the Corporation as may be required by either of them or by law. In addition, the Controller shall have such powers and duties customarily and usually associated with the office of Controller and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President or the Chief Financial Officer.

6.              STOCK

            6.1             Certificates . Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder's name and the number of shares evidenced thereby, and shall be signed by the Chairman of the Board or a Vice Chairman, if any, or the Chief Executive Officer or the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.

            6.2             Transfers . Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, provided such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books.

            6.3             Lost, Stolen, or Destroyed Certificates . Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.

            6.4             Registered Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares as the person entitled to exercise the rights of a stockholder and shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the GCLD.

            6.5             Additional Powers of the Board . (a) In addition to those powers set forth in Section 4.1, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock subject to the provisions of the GCLD.

                   (b)       The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.

7.              INDEMNIFICATION

            7.1            Each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or the person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation, as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the GCLD, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expenses, liability, and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of his or her heirs, executors, and administrators; provided, however, that, except as provided in Section 7.2 of this Article 7, the Corporation shall not be required to indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation prior to commencement of such proceeding (or part thereof). In addition to the right to indemnification conferred in this Section 7.1, each person who is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise shall have the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the GCLD requires, the payment of such expenses incurred by a present director or officer in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such person while a director or officer of the Corporation, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such present director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article 7 or otherwise.

            7.2            If a claim under Section 7.1 of this Article 7 is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim (including attorneys' fees). It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the GCLD for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD, nor an actual determination by the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. In any suit brought by the claimant to enforce a right to indemnification or to an advancement of expenses under Section 7.1 of this Article 7, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the claimant is not entitled to be indemnified, or to such advancement of expenses, under this Article 7 or otherwise shall be on the Corporation.

            7.3            The rights with respect to indemnification and advancement of expenses conferred in Sections 7.1 and 7.2 of this Article 7 shall be contract rights.

            7.4            The Corporation may, by any manner permitted by the GCLD, provide indemnification and advancement of expenses to employees and agents of the Corporation.

            7.5            Any indemnification under this Article 7 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD. Such a determination shall be made, with respect to a person who is a director or officer of the Corporation at the time of such determination, (a) by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum; (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (c) if there are no such directors or if such directors so direct, by independent legal counsel (compensated by the Corporation) in a written opinion; or (d) by the stockholders. Such a determination shall be made, with respect to a person who is a former director or officer of the Corporation, who is a present or former employee or agent of the corporation, or who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, in any manner permitted by the GCLD, including in any of the manners set forth above governing such determination with respect to present directors and officers of the Corporation.

            7.6            The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article 7, shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the certificate of incorporation of the Corporation, these bylaws, agreement, vote of stockholders or disinterested directors, or otherwise.

            7.7            The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee, or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any such expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the GCLD.

            7.8            The Corporation may enter into an indemnity agreement with any director, officer, employee, or agent of the Corporation, or of another corporation, partnership, joint venture, trust, or other enterprise, upon terms and conditions that the Board of Directors deems appropriate, as long as the provisions of the agreement are not impermissible under applicable law.

            7.9            Any amendment or repeal of this Article 7 shall not be retroactive in effect.

            7.10            In case any provision in this Article 7 shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to the persons indemnified hereby to the fullest extent permitted by law.

            7.11            The Corporation may, by action of the Board of Directors, authorize one or more officers (i) to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officer or officers deem appropriate under the circumstances, or (ii) to establish policies relating to the indemnification of and advancement of expenses to employees and agents of the Corporation, including, without limitation, policies specifying officers or senior employees (or categories of officers or senior employees) who shall have the power to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officers or senior employees deem appropriate under the circumstances.

8.              MISCELLANEOUS

            8.1             Place and Inspection of Books . (a) The books of the Corporation other than such books as are required by law to be kept within the State of Delaware shall be kept in such place or places either within or without the State of Delaware as the Board of Directors may from time to time determine.

                   (b)       At least ten days before each meeting of stockholders, the officer in charge of the stock ledger of the Corporation shall prepare a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

                   (c)       The Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the accounts and books of the Corporation (except such as may be by law specifically open to inspection or as otherwise provided by these Bylaws) or any of them shall be open to the inspection of the stockholders and the stockholders' rights in respect thereof.

            8.2             Voting Shares in Other Corporations . The Chief Executive Officer, the President, the Chief Financial Officer or any other officer of the Corporation designated by the Board of Directors may vote any and all shares or other interests held by the Corporation in any other corporation, limited partnership, limited liability company, or other business entity.

            8.3             Fiscal Year . The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

            8.4             Gender/Number . As used in these Bylaws, the masculine, feminine, or neuter gender, and the singular or plural number, shall each include the others whenever the context so indicates.

            8.5             Paragraph Titles . The titles of the paragraphs have been inserted as a matter of reference only and shall not control or affect the meaning or construction of any of the terms and provisions hereof.

            8.6             Amendment . These Bylaws may be altered, amended, or repealed by (a) the affirmative vote of the holders of a majority of the voting power represented by the then outstanding shares of voting stock entitled to vote on the amendment, or (b) by resolution adopted by the affirmative vote of not less than a majority of the Directors in office, at any annual or regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of the proposed alteration, amendment, or repeal be contained in written notice of such special meeting. Notwithstanding the foregoing, the amendment of any provision of these Bylaws that requires an affirmative vote in excess of a majority of the Directors in office shall require the affirmative vote of at least the number of directors the affirmative vote of whom is required by such provision.

            8.7             Certificate of Incorporation . Notwithstanding anything to the contrary contained herein, if any provision contained in these Bylaws is inconsistent with or conflicts with a provision of the Certificate of Incorporation, such provision of these Bylaws shall be superseded by the inconsistent provision in the Certificate of Incorporation to the extent necessary to give effect to such provision in the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF PHI OPERATING SERVICES COMPANY
FIRST: The name of the corporation is PHI Operating Services Company. SECOND: The registered office of PHI Operating Services Company in the State of Delaware is located at 800 King Street, Wilmington, County of New Castle, 19801, and its registered agent at such office shall be Conectiv Resource Partners, Inc., c/o Legal Department. THIRD: The purpose of the Corporation and the nature and objects of the business to be transacted, promoted, conducted or carried out are:
		To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock that the Corporation shall be authorized to issue is One Thousand (1,000) shares of Common Stock having a par value of One Dollar ($1.00) per share. FIFTH: The name and mailing address of the Incorporator of the Corporation is:
	Name			Address
	Diana C. DeAngelis			P.O. Box 231 Wilmington, DE 19899
SIXTH: The names and mailing addresses of the directors who shall serve until the first annual meeting of stockholders or until their successors are elected and qualify are:
	Name			Address
	Thomas S. Shaw			P.O. Box 231 Wilmington, DE 19899
	Barbara S. Graham			P.O. Box 231 Wilmington, DE 19899
	James P. Lavin			P.O. Box 231 Wilmington, DE 19899
SEVENTH: The Board of Directors may make, add to, delete from, alter and repeal any By-law of the Corporation. EIGHTH: No director of the Corporation shall be personally liable to the Corporation for monetary damages for breach of fiduciary duty by such director; provided, however, that this Article EIGHTH shall not eliminate or limit the liability of a director to the extent provided by law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. I, the undersigned, being the Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this Certificate of Incorporation, hereby declaring and certifying that this is my act and deed and that the facts stated herein are true and accordingly have hereunto set my hand and seal this ____ day of December, 2002.
			/s/ Diana C. DeAngelis Diana C. DeAngelis

AMENDED AND RESTATED
B Y L A W S
OF
PHI SERVICE COMPANY

1.             OFFICES .

            1.1       Offices . In addition to its registered office in the State of Delaware, the Corporation shall have a corporate office in Wilmington, Delaware, and such other offices, either within or without the State of Delaware, at such locations as the Board of Directors may from time to time determine or the business of the Corporation may require.

2.              SEAL .

            2.1       Seal . The Corporation shall have a seal, which shall have inscribed thereon its name and year of incorporation and the words, "Corporate Seal Delaware."

3.              MEETINGS OF STOCKHOLDERS .

            3.1       Annual Meetings . The annual meeting of stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as shall be determined by the Board of Directors from time to time.

            3.2       Special Meetings . Special meetings of the stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as may be designated by the Chairman of the Board or by the Board of Directors.

            3.3       Notice of Meetings . (a) Notices of meetings of stockholders shall be in writing and shall state the place, date, and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which a meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting.

                   (b)       Such notice shall either be delivered personally, mailed, postage prepaid, or delivered by any other lawful means to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. If mailed, the notice shall be directed to the stockholder at his or her address as it appears on the records of the Corporation. Delivery of any such notice to any officer of a corporation or association or to any member of a partnership shall constitute delivery of such notice to such corporation, association, or partnership.

                   (c)       Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder in writing, whether before or after such meeting is held, or if such stockholder shall sign the minutes or attend the meeting, except that if such stockholder attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, such stockholder shall not be deemed to have waived notice of such meeting.

                                                                                                              Adopted July 31, 2001

            3.4       Adjourned Meetings . When a meeting is adjourned to another time or place, unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders may transact any business that might have been transacted at the original meeting. If an adjournment is for more than 30 days, or if after an adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

            3.5       Quorum and Adjournment . Except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, or by these Bylaws, the presence, in person or by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction of business at all meetings of stockholders. If such majority shall not be present or represented at any meeting of stockholders, the stockholders present, although less than a quorum, shall have the power to adjourn the meeting.

            3.6       Vote Required . Except as otherwise provided by law or by the Certificate of Incorporation:

                   (a)       Directors shall be elected by a plurality of the votes present in person or represented by proxy at a meeting of stockholders and entitled to vote in the election of directors, and

                   (b)       whenever any corporate action other than the election of Directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or by proxy at a meeting of stockholders and entitled to vote on the subject matter.

            3.7       Manner of Voting . At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Each stockholder shall be entitled to vote each share of stock having voting power registered in his or her name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting.

            3.8       Stockholder Action Without a Meeting. Except as otherwise provided by law or by the Certificate of Incorporation, any action required to be taken at any meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of the holders to take the action were delivered to the Corporation.

            3.9       Proxies . (a) At any meeting of stockholders, any stockholder may be represented and vote by proxy or proxies. In the event that any form of proxy shall designate two or more persons to act as proxies, a majority of such persons present at the meeting or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by the form of proxy upon all of the persons so designated unless the form of proxy shall otherwise provide.

                   (b)       The Board of Directors may, in advance of any annual or special meeting of the stockholders, prescribe additional regulations concerning proxies and the validation of the same, which are intended to be voted at any such meeting.

            3.10       Presiding Officer and Secretary . The Chairman of the Board shall act as chairman of all meetings of the stockholders. In the absence of the Chairman of the Board, the Vice Chairman of the Board or, in his or her absence, any Director designated by the Chairman of the Board or the Board of Directors shall act as chairman of the meeting.

            The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 5.11(b) of these Bylaws shall act as secretary of all meetings of the stockholders, but in the absence of a designated Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

            3.11       Procedure . At each meeting of stockholders, the chairman of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting and shall determine the order of business and all other matters of procedure. Except to the extent inconsistent with any such rules and regulations as adopted by the Board of Directors, the chairman of the meeting may establish rules, which need not be in writing, to maintain order and safety and for the conduct of the meeting. Without limiting the foregoing, he or she may:

                   (a)       restrict attendance at any time to bona fide stockholders of record and their proxies and other persons in attendance at the invitation of the chairman;

                   (b)       restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting;

                   (c)       adjourn the meeting without a vote of the stockholders, whether or not there is a quorum present; and

                   (d)       make rules governing speeches and debate, including time limits and access to microphones.

The chairman of the meeting shall be entitled to act in his or her absolute discretion and his or her rulings shall not be subject to appeal.

4.              DIRECTORS .

            4.1       Powers and Number . The Board of Directors shall exercise all of the powers of the Corporation except such as are by law, or by the Certificate of Incorporation of this Corporation or by these Bylaws conferred upon or reserved to the stockholders of any class or classes. The number of directors that shall constitute the whole Board of Directors shall be no fewer than three (3) and no greater than nine (9), the exact number of directors to be determined from time to time by resolution adopted by the Board of Directors or the stockholders, and until otherwise determined by the Board of Directors or the stockholders, the number of directors that shall constitute the whole Board of Directors shall be three (3).

            4.1       Resignations . Any Director may resign at any time by giving written notice to the Board of Directors or the Secretary. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective.

            4.2       Presiding Officer and Secretary . The Chairman of the Board shall act as chairman of all meetings of the Board of Directors. In the absence of the Chairman of the Board, the Vice Chairman of the Board, or in the Vice Chairman's absence, the Chief Executive Officer or other person designated by the Board of Directors shall act as chairman of the meeting.

                  The Secretary of the Corporation shall act as secretary of all meetings of the Board of Directors, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 5.11(b) of these Bylaws shall act as secretary of all meetings of the Board of Directors, but in the absence of a designated Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

            4.3       Annual Meetings . The Board of Directors shall meet each year immediately following the annual meeting of stockholders, at the place where such meeting of stockholders has been held, or at such other place as shall be fixed by the person presiding over the meeting of the stockholders, for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation. In the event that in any year Directors are elected by written consent in lieu of an annual meeting of stockholders, the Board of Directors shall meet in such year as soon as practicable after receipt of such written consent by the Corporation at such time and place as shall be fixed by the Chairman of the Board, for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation.

            4.4       Regular Meetings . Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the state of Delaware, as shall from time to time be determined by the Board of Directors. In the absence of any such determination, such meetings shall be held at such times and places, within or without the State of Delaware, as shall be designated by the Chairman of the Board on not less than twelve hours notice to each Director, given verbally, in writing or electronically, whether personally, by telephone (including by message or recording device), by facsimile transmission, by telegram, by telex, by electronic mail or by other electronic means, or on not less than three (3) calendar days' notice to each Director given by mail. Notice given by any of the foregoing means shall be sufficient to constitute notice of a meeting without the necessity of further notice.

            4.5       Special Meetings . Special meetings of the Board of Directors shall be held at the call of the Chairman of the Board at such times and places, within or without the State of Delaware, as he or she shall designate, on not less than twelve hours notice to each Director, given verbally, in writing or electronically, whether personally, by telephone (including by message or recording device), by facsimile transmission, by telegram, by telex, by electronic mail or by other electronic means or on not less than three (3) calendar days' notice to each Director given by mail. Notice given by any of the foregoing means shall be sufficient to constitute notice of a meeting without the necessity of further notice. Special meetings shall be called by the Secretary on like notice at the written request of a majority of the Directors then in office.

            4.6       Quorum and Powers of a Majority . At all meetings of the Board of Directors and of each committee thereof, a majority of the members shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the members present at any meeting at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of law, of the Certificate of Incorporation, or of these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present.

            4.7       Waiver of Notice . Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing, whether before or after such meeting is held, or if he or she shall sign the minutes or attend the meeting, except that if such Director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such Director shall not be deemed to have waived notice of such meeting.

            4.8       Manner of Acting . (a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

                   (b)       Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writings are filed with the minutes of proceedings of the Board of Directors or such committee.

            4.9       Compensation . (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors.

                   (b)       Each Director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof.

                   (c)       Nothing contained in these Bylaws shall be construed to preclude any Director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.

                  4.10       Committees . The Board of Directors (or any committee thereof having the power and authority to do so) may designate one or more committees, each committee to consist of one or more Directors, which to the extent provided in the resolution or resolutions designating such committee shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the corporation; provided, however, that no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporation Law of Delaware (the "GCLD") to be submitted to stockholders for approval or (ii) adopting, amending, or repealing any bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member of members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of such absent or disqualified director.

            4.11       Committee Procedure, Limitations of Committee Powers . (a) Except as otherwise provided by these Bylaws, each committee shall adopt its own rules governing the time, place and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 4.6 of these Bylaws with respect to notices of special meetings of the Board of Directors.

                   (b)       Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required.

                   (c)       Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee shall be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee.

5.              OFFICERS .

            5.1       Number . (a) The officers of the Corporation shall include a Chief Executive Officer, a President, one or more Vice Presidents (including one or more Executive Vice Presidents and one or more Senior Vice Presidents if deemed appropriate by the Board of Directors), a Chief Financial Officer, a Secretary, a Treasurer, and a Controller. The Board of Directors shall also elect a Chairman of the Board and may elect a Vice Chairman of the Board. Except for the Chairman of the Board, the Vice Chairman of the Board, and the Chief Executive Officer, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the GCLD.

                   (b)       The Chief Executive Officer shall have the power to appoint one or more employees of the Corporation as divisional or departmental vice presidents and fix the duties of such appointees. However, no such divisional or departmental vice president shall be considered an officer of the Corporation.

            5.2       Election of Officers, Qualification and Term . The Chief Executive Officer, the President, any Executive Vice President, any Senior Vice President, the Chief Financial Officer, the Secretary and the Treasurer of the Corporation shall be elected from time to time by the Board of Directors and, except as may otherwise be expressly provided in a contract of employment duly authorized by the Board of Directors, shall hold office at the pleasure of the Board of Directors. The Board of Directors and the Chief Executive Officer also may elect such other officers as the Board of Directors or the Chief Executive Officer may from time to time deem appropriate or necessary.

            5.3       Removal . Any officer elected by the Board of Directors may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the Chairman of the Board or the Chief Executive Officer, by the Chairman of the Board or the Chief Executive Officer.

            5.4       Resignations . Any officer of the Corporation may resign at any time by giving written notice to the Board of Directors or to the Chairman of the Board or to the Chief Executive Officer. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

            5.5       Compensation . The compensation of all officers of the Corporation shall be fixed by or in the manner provided by the Board of Directors from time to time, and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a Director of the Corporation.

            5.6       The Chairman of the Board . The Chairman of the Board shall have the powers and duties customarily and usually associated with the office of the Chairman of the Board and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. The Chairman of the Board shall preside at meetings of the stockholders and of the Board of Directors.

            5.7       Vice Chairman of the Board . The Vice Chairman of the Board, if any, shall have the powers and duties customarily and usually associated with the office of the Vice Chairman of the Board and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors.

            5.8       Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction and management of the affairs and business of the Corporation usually vested in the chief executive officer of a corporation, including, without limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors. If at any time the offices of the Chairman of the Board and the Vice Chairman of the Board shall not be filled, or in the event of the temporary absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall have the powers and duties of the Chairman of the Board.

            5.9       The President . The President shall serve as chief operating officer, shall have the powers and duties customarily and usually associated with the office of the President and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            5.10       The Vice Presidents . Each Vice President shall have such powers and duties customarily and usually associated with the office of Vice President and shall have such other powers and perform such other duties as may from time to time be assigned to him or her by the Board of Directors, the Chief Executive Officer, or the President.

            5.11       The Chief Financial Officer . The Chief Financial Officer shall be responsible for the financial affairs of the Corporation, including overseeing the duties performed by the Treasurer of the Corporation. In addition, the Chief Financial Officer shall have such powers and duties customarily and usually associated with the office of the Chief Financial Officer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer.

            5.12       The Secretary and the Assistant Secretary . (a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. In addition, the Secretary shall have such powers and duties customarily and usually associated with the office of Secretary and shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors, the Chief Executive Officer, or the President.

                   (b)       Each Assistant Secretary shall have such powers and perform such duties customarily and usually associated with the office of Assistant Secretary and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President, or the Secretary. In case of the absence or disability of the Secretary, the Assistant Secretary designated by the Chief Executive Officer (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary.

            5.13       The Treasurer and the Assistant Treasurer . (a) The Treasurer shall have custody of the Corporation's funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall also maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall see that adequate audits thereof are currently and regularly made. In addition, the Treasurer shall have such powers and duties customarily and usually associated with the office of Treasurer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President or the Chief Financial Officer.

                   (b)       Each Assistant Treasurer shall have such powers and perform such duties customarily and usually associated with the office of Assistant Treasurer and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President, or the Treasurer. In case of the absence or disability of the Treasurer, the Assistant Treasurer designated by the Chief Executive Officer (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.

            5.14       Controller . The Controller shall be responsible for maintaining the accounting records and statements, and shall properly account for all monies and obligations due the Corporation and all properties, assets, and liabilities of the Corporation. The Controller shall render to the Chairman of the Board, the President or the Chief Financial Officer such periodic reports covering the results of operations of the Corporation as may be required by either of them or by law. In addition, the Controller shall have such powers and duties customarily and usually associated with the office of Controller and shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors, the Chief Executive Officer, the President or the Chief Financial Officer.

6.              STOCK

            6.1       Certificates . Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder's name and the number of shares evidenced thereby, and shall be signed by the Chairman of the Board or a Vice Chairman, if any, or the Chief Executive Officer or the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.

            6.2       Transfers . Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, provided such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books.

            6.3       Lost, Stolen, or Destroyed Certificates . Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.

            6.4       Registered Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares as the person entitled to exercise the rights of a stockholder and shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the GCLD.

            6.5       Additional Powers of the Board . (a) In addition to those powers set forth in Section 4.1, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock subject to the provisions of the GCLD.

                   (b)       The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.

7.              INDEMNIFICATION

            7.1      Each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or the person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation, as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the GCLD, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expenses, liability, and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of his or her heirs, executors, and administrators; provided, however, that, except as provided in Section 7.2 of this Article 7, the Corporation shall not be required to indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation prior to commencement of such proceeding (or part thereof). In addition to the right to indemnification conferred in this Section 7.1, each person who is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise shall have the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the GCLD requires, the payment of such expenses incurred by a present director or officer in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such person while a director or officer of the Corporation, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such present director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article 7 or otherwise.

            7.2      If a claim under Section 7.1 of this Article 7 is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim (including attorneys' fees). It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the GCLD for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD, nor an actual determination by the Corporation (including its Board of Directors, a committee thereof, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. In any suit brought by the claimant to enforce a right to indemnification or to an advancement of expenses under Section 7.1 of this Article 7, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the claimant is not entitled to be indemnified, or to such advancement of expenses, under this Article 7 or otherwise shall be on the Corporation.

            7.3      The rights with respect to indemnification and advancement of expenses conferred in Sections 7.1 and 7.2 of this Article 7 shall be contract rights.

            7.4      The Corporation may, by any manner permitted by the GCLD, provide indemnification and advancement of expenses to employees and agents of the Corporation.

            7.5      Any indemnification under this Article 7 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCLD. Such a determination shall be made, with respect to a person who is a director or officer of the Corporation at the time of such determination, (a) by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum; (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (c) if there are no such directors or if such directors so direct, by independent legal counsel (compensated by the Corporation) in a written opinion; or (d) by the stockholders. Such a determination shall be made, with respect to a person who is a former director or officer of the Corporation, who is a present or former employee or agent of the corporation, or who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, in any manner permitted by the GCLD, including in any of the manners set forth above governing such determination with respect to present directors and officers of the Corporation.

            7.6      The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article 7, shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the certificate of incorporation of the Corporation, these bylaws, agreement, vote of stockholders or disinterested directors, or otherwise.

            7.7      The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee, or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any such expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the GCLD.

            7.8      The Corporation may enter into an indemnity agreement with any director, officer, employee, or agent of the Corporation, or of another corporation, partnership, joint venture, trust, or other enterprise, upon terms and conditions that the Board of Directors deems appropriate, as long as the provisions of the agreement are not impermissible under applicable law.

            7.9      Any amendment or repeal of this Article 7 shall not be retroactive in effect.

            7.10      In case any provision in this Article 7 shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to the persons indemnified hereby to the fullest extent permitted by law.

            7.11      The Corporation may, by action of the Board of Directors, authorize one or more officers (i) to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officer or officers deem appropriate under the circumstances, or (ii) to establish policies relating to the indemnification of and advancement of expenses to employees and agents of the Corporation, including, without limitation, policies specifying officers or senior employees (or categories of officers or senior employees) who shall have the power to authorize in the specific case the indemnification of, or to grant rights to advancement of expenses to, employees or agents of the Corporation on such terms and conditions as such officers or senior employees deem appropriate under the circumstances.

8.              MISCELLANEOUS

            8.1       Place and Inspection of Books . (a) The books of the Corporation other than such books as are required by law to be kept within the State of Delaware shall be kept in such place or places either within or without the State of Delaware as the Board of Directors may from time to time determine.

                   (b)       At least ten days before each meeting of stockholders, the officer in charge of the stock ledger of the Corporation shall prepare a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

                   (c)       The Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the accounts and books of the Corporation (except such as may be by law specifically open to inspection or as otherwise provided by these Bylaws) or any of them shall be open to the inspection of the stockholders and the stockholders' rights in respect thereof.

            8.2       Voting Shares in Other Corporations . The Chief Executive Officer, the President, the Chief Financial Officer or any other officer of the Corporation designated by the Board of Directors may vote any and all shares or other interests held by the Corporation in any other corporation, limited partnership, limited liability company, or other business entity.

            8.3       Fiscal Year . The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

            8.4       Gender/Number . As used in these Bylaws, the masculine, feminine, or neuter gender, and the singular or plural number, shall each include the others whenever the context so indicates.

            8.5       Paragraph Titles . The titles of the paragraphs have been inserted as a matter of reference only and shall not control or affect the meaning or construction of any of the terms and provisions hereof.

            8.6       Amendment . These Bylaws may be altered, amended, or repealed by (a) the affirmative vote of the holders of a majority of the voting power represented by the then outstanding shares of voting stock entitled to vote on the amendment, or (b) by resolution adopted by the affirmative vote of not less than a majority of the Directors in office, at any annual or regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of the proposed alteration, amendment, or repeal be contained in written notice of such special meeting. Notwithstanding the foregoing, the amendment of any provision of these Bylaws that requires an affirmative vote in excess of a majority of the Directors in office shall require the affirmative vote of at least the number of directors the affirmative vote of whom is required by such provision.

            8.7       Certificate of Incorporation . Notwithstanding anything to the contrary contained herein, if any provision contained in these Bylaws is inconsistent with or conflicts with a provision of the Certificate of Incorporation, such provision of these Bylaws shall be superseded by the inconsistent provision in the Certificate of Incorporation to the extent necessary to give effect to such provision in the Certificate of Incorporation.

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 04/23/1999 991163694 - 3033120
CERTIFICATE OF INCORPORATION OF PEPCO HOLDINGS INC. For the purpose of organizing a cooperation for conducting the business and promoting the purposes hereinafter stated under the provisions, and subject to the requirements of the General Coporation Law of the State of Delaware, the undersigned, a natural person, hereby certifies that: FIRST: The name of the corporaton is Pepco Holdings Inc. (hereinafter the "Corporation"). SECOND: The address, including street, number, city and county of the registered office of the Corporation in the State of Delaware is c/o Corporation Service Company. 1013 Center Road, Wilmington Delaware 19905-1297. The name of the registered agent of the Corporation at such address is Corporation Service Company, in the county of New Castle. THIRD: The Corporation is organized under the General Corporation Law of the State of Delaware for the purposes of engaging in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The duration of the Corporation shall be perpetual. FIFTH: The Corporation has authority to issue a total of one thousand (1,000) shares of common stock, all of one class, having a par value of one dollar ($1 .00) per share. for a total authorized par value capital of one thousand dollars ($1,000). SIXTH: The name and mailing address of the incorporator of the Corporation are as follows:
Name William Dana Shapiro		Mailing Address c/o Potomac Capital Investment Corporation 1801 K Street N.W. Suite 900 Washington, D.C. 20006
The powers of the incorporator will terminate upon filing of this Certificate of incorporation. SEVENTH: The number of directors of the Corporation shall be set forth in the by-laws of the Corporation, which number may be increased or decreased pursuant to the by-laws of the Corporation. The Board of Directors is authorized to make, alter or repeal the by-laws of the Corporation. The Board of Directors may be elected by other than written ballot. The names and mailing addresses of the persons who are to serve as directors of the Corporation until the first annual meeting of stockholders or until their successors are elected and qualify are as follows:
	Name John M. Derrick. Jr. Edward R. Mayberry John D. McCallum William Dana Shapiro William T. Torgerson Dennis R. Wraase	Mailing Address 1900 Pennsylvania Avenue, N.W. Washington. D.C, 20068 2000 K Street, N.W., Suite 750 Washington, D.C. 20006 1801 K Street, N.W,, Suite 900 Washington, D,C. 20006 1801 K Street. N.W., Suite 900 Washington, D.C. 20006 1900 Pennsylvania Avenue, N.W. Washington, D.C. 20068 1900 Pennsylvania Avenue, N.W. Washington, D.C. 20068
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for the Corporation under the provision of Section 291 of General Corporation Law of the State of Delaware, or on the application of trusteee in dissolution or of any receiver appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware, order a meeting of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing at least three-fourths in value of the creditors, and/or of the stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders, of the Corporation, as the case may be, also on the Corporation. NINTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, and all such liability is hereby eliminated; provided, however, that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. TENTH: The Corporation, by action of its board of directors. shall indemnify any person who was or is a director. officer, agent and/or employee of the Corporation to the fullest extent allowed under Section 145 of the General Corporation Law of the State of Delaware from and against any and all of the expenses, liabilities. or other maters refer to in of covered by such Section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise. both as to action by such person in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the heirs, executors and administrators of such a person. ELEVENTH: The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware regarding business combinations with interested stockholders. TWELFTH: Any amendment of this Certificate of Incorporation shall be made and effected only in the manner set forth herein. The board of directors shall adopt a resolution, by affirmative vote of at least two-thirds (213) of the directors than in office, at a meeting called for that purpose, setting forth the proposed amendment, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration of such amendment or directing that the proposed amendment be considered at the next annual meeting of stockholders. In order to be adopted, each proposed amendment to this Certificate of Incorporation must be approved by the affirmative vote of a majority of the outstanding share of each class and series, if any, entitled to vote thereon. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 23 ^rd day of April, 1999.
		/s/ WM. SHAPIRO William Dana Shapiro, Incorporator

			STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATXONS FILED 09:00 AM 06/03/1999 991223207 - 2020271
CERTIFICATE OF MERGER PEPCO HOLDINGS MERGER INC. INTO POTOMAC CAPITAL INVESTMENT CORPORATION The undersigned corporation organized under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That the name and the state of incorporation of each of the constituent corporations of the merger is:
	Name Pepco Holdings Merger Inc Potomac Capital Investment Corporation		State of Incorporation Delaware Delaware
SECOND: That an agreement and plan of merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 251 of Title 8 of the General Corporation Law of the State of Delaware. THIRD: That the name of the surviving corporation of the merger is Potomac Capital Investment Corporation. FOURTH: That the Certificate of Incorporation of Potomac Capital Investment Corporation shall be the Certificate of Incorporation of the surviving corporation. FIFTH: That the executed agreement and plan of merger is on file at the principal place of business of the surviving corporation. The address of the principal place of business of the surviving corporation is Suite 900, 1801 K Street, N.W., Washington, D.C. 20006. SIXTH: That a copy of the agreement and plan of merger will be furnished by the surviving corporation, on request and without cost, to any shareholder of either constituent corporation. SEVENTH: That the Merger shall be effective immediately upon filing. IN WITNESS WHEREOF, the surviving corporation has caused this certificate to be executed by its President and attested by its Secretary this 27 ^th day of May, 1999.
ATTEST: /s/ JOY D.JOHNSON Joy A. Johnson Corporate Secretary and Associate General Counsel		POTOMAC CAPITAL INVESTMENT CORPORATION By: /s/ WM. SHAPIRO William Dana Shapiro Senior Vice President and General Counsel

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 10:00 AM 01/22/2002 020040430 - 3033120
CERTIFICATE OF AMNDMENT OF CERTIFICATE OF INCORPORATION OF PEPCO HOLDINGS INC. Pepco Holdings Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify as follows First : That, by unanimous written consent of all of the directors of the Corporation, resolutions were duly adopted setting forth a proposed amendment to the Certificate of incorporation of the Corporation, declining such amendment to be advisable and in the best interests of the Corporation, and directing that such proposed amendment be submitted to the sole stockholder of the Corporation for its consideration. The resolution setting forth the proposed amendment was as follows:
	RESOLVED, that the Certificate of Incorporation of the Corporation be amended by deleting therefrom the current Article First and substituting therefor the following new Article First: FIRST: The name of the corporation is POM Holdings, Inc. (hereinafter the "Corporation").
Second : That, pursuant to a resolution of the board of directors of the Corporation, such amendment was submitted to the sole of the Corporation for its consideration, By written consent of the sole stockholder of the Corporation in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware, all of thc issued and outstanding shares of the capital stock of the Corporation were voted in favor of the amendment Third : That such amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by Dennis R. Wraase, its Chief Executive Officer, and attested by Joy J. Dorsey, its Corporate Secretary, this 22 ^nd day of January, 2002.
Attest: /s/ JOY J. DORSEY Joy J. Dorsey Deputy General Counsel and Corporate Secretary		/s/ D. R. WRAASE Dennis R. Wraase Chairman of the Board and Chief Executive Officer

BY-LAWS

POM Holdings, Inc.
(a Delaware Corporation)

As amended on
January 22, 2002

POM HOLDINGS, INC.

BY-LAWS

Article I

OFFICES

Section 1. The registered office of POM Holdings, Inc. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Article III

DIRECTORS

Section 1. The Board of Directors of the Corporation shall consist of not less than one and not more than seven persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

Section 2. Four members of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

(d) The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. Section 5. The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board. 7

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize. All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

FILED IN THE OFFICE OF THE SECRETARY.OF STATE OF THE STATE OF NEVADA NOV 15 1993 CHERYL A LAU SECRETARY OF STATE No. 14460-93
ARTICLES OF INCORPORATION OF POTOMAC AIRCRAFT LEASING CORPORATION, A Nevada Corporation The undersigned natural person acting as an incorporator of a corporation under Chapter 78 of the Nevada Revised Statutes adopts the following articles of incorporation: ARTICLE I The name of the Corporation is Potomac Aircraft Leasing Corporation , a Nevada corporation (the "Corporation"). ARTICLE II The address and location of the principal office of the Corporation in the State of Nevada is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501. ARTICLE II The name and address of the resident agent for the Corporation in the State of Nevada is Sierra Corporate Services, 241 Ridge Street, Fourth Floor, Reno, Nevada 89501. ARTICLE IV The purpose for which the Corporation is formed is to engage in any lawful activity. ARTICLE V Section 1. The Corporation shall be authorized to issue 2,500 shares of capital stock with par value of ONE DOLLAR ($1.00) per share. Section 2. All of the shares of stock shall be of the same class, without preference or distinction. Section 3. The capital stock of the Corporation, after the amount of capital has been paid in money, property or services, as the board of directors shall determine, shall not be subject to assessment to pay the debts of the Corporation, nor for any other purpose, and no stock issued as fully paid shall ever be assessable or assessed and the articles of incorporation shall not be amended in this respect. Section 4. Cumulative voting by any shareholder is denied. Section 5. No shareholder shall, by reason of holding shares of any class of stock, have any preemptive or preferential right to purchase or subscribe for any shares of any class of stock now or hereafter authorized or any notes, debentures or bonds convertible into or carrying options or warrants to purchase shares of any class of stock now or hereafter authorized, whether or not the issuance of any shares, notes, debentures or bonds would adversely affect the dividend or voting rights of the shareholder. ARTICLE VI The period of existence of the Corporation is perpetual. ARTICLE VII The name and post office address of the incorporator is John B. Galvin, P. O. Box 2670, Reno, Nevada 89505. ARTICLE VIII The members of the governing board of the Corporation shall be designated as "directors". The board of directors shall consist of five (5) members. The number of directors of the Corporation may be increased or decreased from time to time as provided in the bylaws of the Corporation. The names and addresses of the members of the initial board of directors who shall serve as director until his or her successors shall have been elected and qualified is as follows:
	NAME H. Lowell Davis Paul F. Naughton William Dana Shapiro William D. Stockbridge Margie Vollmann	ADDRESS 506 Richards Lane Alexandria, Virginia 22302 1058 Harriman Street Great Falls, Virginia 22066 1033 Broad Branch Court McLean, Virginia 22101 2149 California Street, N.W. Washington, D.C. 20008 2765 Edgewood Drive Reno, Nevada 89503
ARTICLE IX In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by Chapter 78 of the Nevada Revised Statutes or other statutes or laws of the State of Nevada, the board of directors is expressly authorized: (i) to make, amend, alter, or repeal the bylaws of the Corporation; (ii) to adopt from time to time bylaw provisions with respect to indemnification or directors, officers, employees, agents and other persons as it shall deem expedient and in the best interests of the Corporation and to the extent permitted by law; and (iii) to fix and determine designations, preferences, privileges, rights and powers and relative, participating, optional or other special rights, qualifications, limitations or restrictions on the capital stock of the Corporation as provided by Nev. Rev. Stat. Section 78.195, unless otherwise provided herein. ARTICLE X To the extent specified from time to time by the board of directors, no officer or director of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as an officer or director, excepting only (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of dividends in violation of Nev. Rev. Stat. Section 78.300. No amendment or repeal of this Article X applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and executed these Articles of Incorporation this 12th day of November, 1993.
		/s/ JOHN B. GALVIN John G. Galvin
STATE OF NEVADA ) ) ss COUNTY OF WASHOE ) On this 12 ^TH day of November, 1993, personally appeared before the undersigned, a Notary Public, in and for the County of Washoe, State of Nevada, Robert E. Armstrong, known to me to be the person described in and who executed the foregoing instrument freely and voluntarily and for the uses and purposes mentioned. IN WITNESS WHIEREOF, I have hereunto set my hand and affixed my official seal the day -and year in this certificate first above written.
MARIALICE BIGRIGG Notary Public - State of Nevada Appointment Recorded in Washoe County APPOINTMENT EXPIRES NOV. 20, 1994		/s/ MARIALICE BIGRIGG NOTARY PUBLIC

FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA

NOV 15 1993

CHERYL A. LAU SECRETARY OF STATE

STATE OF NEVADA

SECRETARY OF STATE

CERTIFICATE OF ACCEPTANCE OF APPOINTMENT

BY RESIDENT AGENT

In the Matter of Potomac Aircraft Leasing Corporation , a Nevada corporation, Sierra Corporate Services, with address at 241 Ridge Street, 4th Floor, Reno, Nevada 89501, hereby accepts the appointment as Resident Agent of the above-entitled corporation in accordance with NRS 78.090.

FURITHERMORE , that the registered office in this state is located at 241 Ridge Street, 4th Floor, Reno, Nevada 89501.

IN WITNESS WHEREOF , I have hereunto set my hand this 2nd day of November, 1993.

SIERRA CORPORATE SERVICES

By: /s/ JOHN B. GALVIN
John B. Galvin

BYLAWS OF POTOMAC AIRCRAFT LEASING CORPORATION ARTICLE 1 Identification Section 1.01. Name . The name of the Corporation is Potomac Aircraft Leasing Corporation. Section 1.02. Resident Office and Resident Agent . The address of the resident office of the Corporation is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501; and the name of the resident agent at this address is Sierra Corporate Services. Section 1.03. Other Offices . Branch or subordinate offices may be established by the Board of Directors. Section 1.04. Seal . The seal of the Corporation will be circular in form and mounted upon a metal die, suitable for impressing the same upon paper. Section 1.05. Fiscal Year . The fiscal year of the Corporation will be determined by resolution of the Board of Directors. ARTICLE 2 Capital Stock Section 2.01. Consideration for Shares . The capital stock may be issued for such consideration, expressed in dollars, not less than the par value thereof, if any, as shall be fixed from time to time by the Board of Directors. Treasury shares may be disposed of by the Corporation for such consideration expressed in dollars as may be fixed from time to time by the Board of Directors. Section 2.02. Payment for Shares . The consideration for the issuance of shares may be paid, in whole or in part, in cash, labor or services actually performed or personal property, or real estate or leases thereof; the term "personal property" may include the legally enforceable obligation of a subscriber to pay the balance of a subscription for the issuance of shares. Any shares issued shall be considered to be fully paid and nonassessable if (a) the entire amount, or (b) not less than the amount characterized as capital pursuant to NRS Section 78.270 accompanied by the legally enforceable obligation of the subscriber to pay the balance of the subscription has been received by the Corporation. The judgment of the Board of Directors as to the value of the consideration received for shares shall be conclusive as to all except the then existing shareholders for whom it shall be conclusive in the absence of actual fraud in the transaction. No certificate shall be issued for any share until the share is fully paid. Section 2.03. Certificates Representing Shares . Each holder of the capital stock of the Corporation is entitled to a certificate signed by the President or a Vice President, and the Secretary or an Assistant Secretary, certifying the number of shares owned by the shareholder in the Corporation. Section 2.04. Transfer of Stock . The Corporation will register a transfer of a stock certificate presented to it for transfer if the following conditions have been fulfilled:
	(a) Endorsement . The certificate is properly endorsed by the registered shareholder or by the shareholder's duly authorized agent. (b) Witnessing . The endorsement or endorsements are witnessed by one witness unless this requirement is waived by the Secretary; (c) Adverse Claims . The Corporation has no notice of any adverse claims or has discharged any duty to inquire into any adverse claims; and (d) Collection of Taxes . There has been compliance with any applicable law relating to the collection of taxes.
ARTICLE 3 The Shareholders Section 3.01. Place of Shareholder Meetings . Meetings of the shareholders of the Corporation shall be held at the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, or such other place as may be designated by the Chairman, the President or the Board of Directors, or by the written consent of all shareholders entitled to vote at the meeting given either before or after the meeting and filed with the Secretary. Section 3.02. Annual Shareholder Meeting . Unless a written consent of all of the shareholders entitled to vote at the annual meeting is filed with the Secretary in lieu of an annual meeting, the annual shareholders' meeting shall be held at 10:00 o'clock a.m. in the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, on the fifteenth day of the third month following the end of the Corporation's fiscal year, if this day is not a legal holiday, and if a holiday, then on the first following day that is not a legal holiday. In the event the annual shareholder's meeting is not held at such time and place, the Board of Directors, the Chairman of the Board of Directors, the President or shareholders holding not less that one-tenth of all the shares entitled to vote at the meeting may call the annual meeting of the shareholders. The failure to hold the annual meeting or to file the written consent in lieu thereof will not cause a forfeiture or dissolution of the Corporation. Section 3.03. Special Shareholder Meetings . Special shareholders' meetings may be called by the Board of Directors, the Chairman, the President or shareholders holding not less than one-tenth of all the shares entitled to vote at the meeting. Section 3.04. Notice of Shareholder Meetings -- Waiver . Written notice stating the place, day and hour of a shareholders' meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered not less than ten (10) days, nor more than fifty (50) days before the date of the meeting, either personally, or by mail, or by other means of written communication, charges prepaid, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each registered shareholder entitled to vote at the meeting. If mailed, the notice shall be considered to be delivered when deposited in the United States mail addressed to the shareholder at the shareholder's address as it appears on the stock transfer books of the Corporation, with postage prepaid. If a shareholder gives no address, notice shall be deemed to have been given to the shareholder if sent by mail or other written communication addressed to the place where the Corporation's principal office is located, or if published at least once in some newspaper of general circulation in the county in which the Corporation's principal office is located. Waiver by a shareholder in writing of notice of a meeting is equivalent to giving notice. Attendance by a shareholder, without objection to the notice, whether in person or by proxy, at a meeting is a waiver of notice of the meeting. Section 3.05. Shareholder Quorum . A majority of the shares entitled to vote, represented in person or by proxy, is a quorum at a shareholders' meeting. The shareholders present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 3.06. Adjourned Shareholder Meetings and Notice Thereof . Any shareholders' meeting, whether annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy, but in the absence of a quorum no other business may be transacted at any shareholders' meeting. When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. As to any adjournment of less than thirty (30) days, it shall not be necessary to give any notice or the time and place of the adjourned meeting or of the business to be transacted other than by announcement at the meeting at which the adjournment is taken. Section 3.07. Entry of Notice . An entry in the minutes of any meeting of shareholders, whether annual or special, to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the meeting was given to all shareholders as required by law and these Bylaws. Section 3.08. Voting . Except as otherwise provided by law, only persons in whose names shares entitled to vote stand on the stock registry of the Corporation on the day three (3) days prior to any shareholders' meeting, or, if a record date for voting purposes is fixed as provided in Article 6, Section 6.01, of these Bylaws, then on that record date, shall be entitled to vote at the meeting. Voting may be viva voce or by ballot; provided, however, that all elections for Directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Except as otherwise provided by an express provision of the Articles of Incorporation or by an express provision of law, each full share is entitled to one vote and, when a quorum is present at the commencement of any shareholders' meeting, the vote of the holders of a majority of the shares entitled to vote present, in person or by proxy, shall decide any question brought before the shareholders' meeting. Fractional shares shall not be entitled to any voting rights whatsoever. Section 3.09. Consent of Absentees . The transactions of any shareholders' meeting, either annual or special and however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes thereof, all such waivers, consents or approvals shall be filed with the Secretary or be made a part of the minutes of the meeting. Section 3.10. Action or Ratification of Action without Meeting . Any action which, under applicable provisions of law, may be taken or ratified at a meeting of the shareholders, may be taken or ratified without a meeting if authorized in writing by shareholders holding the percentage of the voting power required by law for taking the action by written consent and the written consent is filed with the Secretary. Section 3.11. Proxies . Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by the person or by the person's duly authorized agent and filed with the Secretary of the Corporation; provided that no proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless the person executing it specified therein the length of time for which the proxy is to continue in force, which in no event shall exceed seven (7) years from the date of its execution. Section 3.12. Definition of "Shareholder" . As used in these Bylaws, the term "shareholder", and any term of like import, shall include all persons entitled to vote the shares held by a shareholder, unless the context in which the term is used indicates that a different meaning is intended. ARTICLE 4 The Board of Directors Section 4.01. Number of Directors . The Board of Directors of the Corporation shall consist of five (5) members. The members of the Board of Directors need not be shareholders. The number of members of the Board of Directors may be increased or decreased from time to time as provided in Section 4.02 below. Section 4.02. Increase or Decrease of Directors . The number of Directors of the Corporation may be increased or decreased from time to time, at a meeting of the shareholders or by the filing of a written consent, by the affirmative vote of a majority of the issued and outstanding shares of stock of the Corporation. This section of the Bylaws may be amended only by the affirmative vote, at a meeting of the shareholders, of a majority or the issued and outstanding shares of stock of the Corporation. Section 4.03. Election . Members of the initial Board of Directors shall hold office until the first annual shareholders' meeting or until their successors shall have been elected and qualified. At the first annual shareholder's meeting and at each annual meeting thereafter, or by a written consent filed in lieu of an annual meeting, the shareholders shall elect Directors to hold office until the time for the next succeeding annual meeting. If any annual shareholders' meeting is not held and a written consent in lieu of an annual meeting is not filed, or the Directors are not elected, the Directors may be elected at any special shareholders' meeting held for that purpose or by the filing of a special written consent. Each Director shall hold office for the term for which the Director is elected or until the Director's successor shall be elected and qualified. Section 4.04. Vacancies . Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors was present, or by a sole remaining Director. A Director elected to fill a vacancy shall be elected for the unexpired term of the Director's predecessor in office. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any Director or Directors are elected to elect the full authorized number of Directors to be voted for at that meeting, or if a vacancy is declared by the Board of Directors for any reason permitted by law. The shareholders may elect a Director or Directors at any time to fill any vacancy or vacancies not filled by the Directors. If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board or the shareholders shall have power to elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of the Director's term of office. Section 4.05. Place of Meetings . Immediately after the annual meeting of the shareholders, at the same place as the meeting of the shareholders, the Board of Directors shall meet each year for the purpose of organization, election of officers, and consideration of any other business that may properly be brought before the meeting. No notice of any kind to either old or new members of the Board of Directors for this annual meeting shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.07. Section 4.06. Regular Meetings . Regular meetings of the Board of Directors shall be held at the times and places within or without the State of Nevada as may be designated from time to time by resolution of the Board or by written consent of all members of the Board. No notice of any kind to members of the Board for these regular meetings shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.07. Section 4.07 Other Meetings . Other meetings of the Board of Directors for any purpose or purposes may be held at any time upon call by the President or, if the President is absent or unable or refuses to act, by any Vice President or by any two (2) Directors. The other meetings may be held at any place within or without the State of Nevada as may be designated from time to time by resolution of the Board of Directors or by written consent of all Directors. Written notice of the time and place of other meetings shall be delivered personally to each Director or sent to each Director by mail or other form of written communication, charged prepaid, addressed to the Director at the Director's address as it is shown upon the records of the Corporation or, if it is not so shown on the Corporation's records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case the notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the place in which the principal office if the Corporation is located at least seventy-two (72) hours prior to the time of the holding of the meeting. In case the notice is delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. The mailing, telegraphing or delivery as above provided shall constitute due, legal and personal notice to the Director. Section 4.08. Notice of Adjourned Meetings . Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place be fixed at the meeting adjourned. Section 4.09. Entry of Notice . An entry in the minutes of any special meeting of the Board of Directors to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the special meeting was given to all Directors as required by law and by these Bylaws. Section 4.10. Waiver of Notice . The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the Directors not present signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 4.11. Quorum . A majority of the authorized number of Directors, or, in the event that a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a majority of the exact authorized number of Directors, shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number be required by law or by the Articles of Incorporation. If the number of Directors pursuant to the Articles of Incorporation is one or two, the unanimous consent of said Directors shall be necessary for Board of Directors' action. Section 4.12. Adjournment . A quorum of the Directors may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board. Section 4.13. Action Without Meeting . Any action required or permitted to be taken by the Board of Directors under the Articles of Incorporation, these Bylaws, or under applicable law, may be taken without a meeting if all members of the Board of Directors shall individually or collectively consent, in writing, to the action. Any action by written consent shall have the same force and effect as a unanimous vote of all Directors. All written consents must be filed with the Secretary. Section 4.14. Fees and Compensation . Directors shall not receive any stated salary for their services as Directors or as members of committees, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed to Directors for the Director's services. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor. Section 4.15. Indemnification of Directors and Officers . (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, 'including attorneys' fees, judgments, fines and amounts paid or owed in settlement actually and reasonably paid or incurred by the person or rendered or levied against the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contender or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for misfeasance or nonfeasance in the performance of the person's duty to the Corporation unless and only to the extent that, despite the adjudication of liability but in view of all circumstances of the case, such person fairly and equitably merits indemnification. (c) To the extent that a person who may be entitled to indemnification by the Corporation under this section is or has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection therewith. (d) Any indemnification under subsections (a) and (b) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsection (a) or (b). Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs, by either independent legal counsel in a written opinion, or the stockholders, or (iii) if required by law, by the court in which such action, suit or proceeding was brought or another court of competent jurisdiction. (e) Expenses incurred in defending a civil or criminal action, suit or D proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding if such payment is authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Corporation as authorized in this section. (f) The indemnification provided by this section shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. (g) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the Corporation would have the power to indemnify the person against such liability under the provisions of this section. (h) For the purposes of this section, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity. (i) The provisions of this section shall apply to the estate, executors, administrators, heirs, legatees or devisees of a person entitled to indemnification hereunder and the term "person," where used in the section shall include the estate, executors, administrators, heirs, legatees or devisees of such person. Section 4.16. Powers of Directors . Subject to limitations of the Articles of Incorporation, of these Bylaws, and of applicable law as to action to be authorized or approved by the shareholders and subject to the duties of Directors as prescribed by these Bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be controlled by, the Board of Directors. Without prejudice to these general powers, but subject to the same limitations, it is hereby expressly declared that the Directors shall have the following powers: First: To select and remove all officers, agents and employees of the Corporation, to D delegate the power to remove any or all officers, agents and employees of the Corporation to an officer or officer, prescribe such powers and duties for them as may not be inconsistent with law, with the Articles of Incorporation or the Bylaws, fix their compensation, and require from them security for faithful service. Second: To conduct, manage and control the affairs and business of the Corporation and to make such rules and regulations therefor not inconsistent with law, with the Articles of Incorporation or these Bylaws, as they may deem best. Third: To change the principal office of the Corporation from one location to another within the same county as provided in Article 1, Section 1.02, hereof; to fix and locate from time to time one or more subsidiary offices of the Corporation, within or without the State of Nevada as provided in Article 1, Section 1.03, hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter. the form of the seal and of the certificates from time to time, as in their judgment they may deem best, provided the seal and the certificates shall at all times comply with the provisions of law. Fourth: To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor. Fifth: To authorize the issue of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, tangible or intangible property actually received or such other consideration as may be authorized by law. Sixth: To adopt and administer, or provide for the administration of, employee stock purchase plans, employee stock option plans and any other plans or arrangements whereby Directors, officers, employees or agents of the Corporation or any other entity may be entitled to acquire authorized but unissued or treasury stock or other securities of the Corporation, upon such terms and conditions as may from time to time be permitted by law. Seventh: To appoint an Executive Committee and other committees, and to delegate to the Executive Committee any of the powers and authority of the Board in the management of the business and affairs of the Corporation except the power to declare dividends and to adopt, amend or repeal Bylaws. The Board of Directors shall have the power to prescribe the manner in which proceedings of the Executive Committee and other committees shall be conducted. The committees shall keep regular minutes of their meetings and report the same to the Board when required. The Executive Committee must be composed of two (2) or more Directors. Eighth: To lend money in furtherance of any of the purposes of the Corporation; to invest the funds of the Corporation from time to time; and to take and hold any property as security for the payment of funds so loaned or invested. Ninth: To lend money to employees, officers and Directors, and to otherwise assist employees, officers and Directors. Loans to members of the Board of Directors shall be made only upon the approval of a majority of the Board of Directors excluding the Director to whom the loan is to be made. Tenth: To declare dividends upon the capital stock of the Corporation in cash, in property, or in shares of the capital stock, subject to the limitation of the Articles of Incorporation and of applicable law. Before payment of any dividend, there may be set aside out of the funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interests of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created. ARTICLE 5 The Officers Section 5.01. Officers . The officers of the Corporation shall be a President, a Vice President, a Secretary and a Treasurer, and each of them shall be appointed by the Board of Directors. The Corporation may also have such other executive officers, including one (1) or more Vice Presidents, one (1) or more Assistant Secretaries and one (1) or more Assistant Treasurers, and other subordinate officers as may be appointed in accordance with the provisions of Section 5.03 of this Article 5. Officers need not be Directors. One person may hold two (2) or more offices, except those of President and Vice President. However, if the Corporation only has one shareholder, then one person may hold the offices of both President and Vice President. Section 5.02. Election . The officers of the Corporation, except those officers as may be appointed in accordance with the provisions of Section 5.03 or Section 5.05 of this Article, shall be chosen annually by the Board of Directors, and each shall hold office until the officer shall resign or shall be removed or otherwise disqualified to serve, or the officer's successor shall be elected and qualified; provided that officers may be appointed at any time by the Board of Directors, or, as permitted by Section 5.03 of this Article, by the President, for the purpose of initially filling an office or filling a newly created or vacant office. Section 5.03. Subordinate Officers . The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the Corporation may require, each of whom shall hold office for the term, have the authority and perform the duties as are provided in these Bylaws or as the Board of Directors may from time to time determine. Section 5.04 Removal and Resignation . Any officer may, subject to any contractual arrangements between the officer and the Corporation, be removed, either with or without cause, by a majority of the Directors in office at the time, at any regular or special meeting of the Board, or by any officer upon whom the power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving written notice to the Board of Directors, to the President, or to the Secretary of the Corporation. Any resignation shall take effect at the date of the receipt of the notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 5.05. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to that office. Section 5.06. President . Subject to the control of the Board of Directors, the President shall have general supervision, direction and control of the business and officers of the Corporation. In the absence of a Chairman of the Board, the President shall preside at all meetings of the shareholders and at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing committees, including the Executive Committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a Corporation, and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws. Section 5.07 Vice Presidents . In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other 'powers and perform such other duties as may be prescribed for them respectively by the Board of Directors, the President, or these Bylaws. Section 5.08. Secretary . The Secretary shall keep or cause to be kept, at the principal office or such other place as the Board of Directors may order, a book of minutes of all meetings of Directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof. The Secretary shall keep or cause to be kept, in any form permitted by law, at the principal office or at the office of the Corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for shares, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board of Directors required by these Bylaws or by law to be given, and shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. Section 5.09. Treasurer . The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any Director. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and Directors, whenever they request it, an account of all transactions as Treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of office of Treasurer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation. Section 5.10. Corporate Bank Accounts . Bank accounts in the name of the Corporation may be opened without the approval of the Board of Directors if opened with the consent of the President and the Treasurer of the Corporation. The Treasurer shall inform the Board of Directors of any bank account opened by the Corporation pursuant to the authority granted in this section at the next meeting of the Board of Directors. Section 5.11. Transfers of Authority . In case of the absence of any officer of the Corporation, or for any reason that the Board of Directors may consider sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer or to any Director or employee of the Corporation, provided a majority of the full-Board of Directors concurs. ARTICLE 6 Miscellaneous Section 6.01. Record Date and Closing Stock Books . The Board of Directors may fix a time in the future, as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders, or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall not be more than sixty (60) days prior to the date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record on that date shall be entitled to notice of and to vote at the meeting, or to receive the dividend, distribution or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. The Board of Directors may close the books of the Corporation against transfers of shares during the whole or any part of the sixty (60) day period. Section 6.02. Inspection of Corporate Records . The share register or duplicate share register shall be open to inspection upon at least five (5) days written demand of any shareholder who has been a shareholder for at least six months preceding his demand or any person holding, or authorized in writing by the holders of, at least five percent (5%) of all of the Corporation's outstanding shares, at any reasonable time. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection is not desired for any purpose which is in the interest of a business or object other than the business of the Corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose. Unless the Corporation furnishes a detailed annual financial statement, the books of account and all financial records of the Corporation shall be open to inspection upon at least five (5) days written demand of any stockholder of record and who owns not less than fifteen percent (15%) of all of the Corporation's issued and outstanding shares, at any reasonable time, and shall include the right to audit the same. The stockholder shall pay, in advance, for the cost for making extracts and conducting an audit. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection, extracts or audit is not desired for any purpose not related to his interest in the Corporation as a stockholder. Any inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand for any inspection shall be made in writing upon the President of the Corporation. Section 6.03. Checks, Drafts. etc . All checks, drafts, bonds, bills of exchange, or other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in D such manner as, from time to time, shall be determined by resolution of the Board of Directors. Section 6.04. Contracts. etc., How Executed . The Board of Directors, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument or document in the name of and on behalf of the Corporation, and the authority may be general or confined to specific instances. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust, mortgages and corporate instruments or documents requiring the corporate seal, and certificates for shares of stock owned by the Corporation shall be executed, signed or endorsed by the President or any Vice President and by the Secretary (or any Assistant Secretary) or the Treasurer (or any Assistant Treasurer). The Board of Directors may, however, authorize any one (1) of these officers to sign any of such instruments, for and on behalf of the Corporation, without necessity of countersignature; may designate officers or employees of the Corporation, other than those named above, who may, in the name of the Corporation, sign such instruments; and may authorize the use of facsimile signatures or any of such persons. No officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit to render it liable for any purpose or to any amount except as specifically authorized in these Bylaws or by the Board of Directors in accordance with these Bylaws. Section 6.05. Certificates of Stock . A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares are fully paid up. All certificates shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and Secretary or by a facsimile of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Before it becomes effective, every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust company, either domestic or foreign, as registrar of transfers, as required or permitted by law. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any certificate or certificates shall cease to be an officer or officers of the Corporation, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of the Corporation. Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or these Bylaws may provide; provided, however, that any certificate so issued prior to full payment shall state the amount remaining unpaid and the terms of payment thereof. Section 6.06. Lost Certificates of Stock . The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates, or the shareholder's legal representative, to advertise the same in any manner as it shall require or give the Corporation a bond in any sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed, or both. Section 6.07. Representation of Shares of Other Corporations . The President or any Vice President and the Secretary or any Assistant Secretary of this Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to these officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other corporation or corporations may be exercised either by these officers in person or by any persons authorized so to do by proxy or power of attorney duly executed by these officers. Section 6.08. Inspection of Bylaws . The Corporation shall keep in its principal business office the original or a copy of the Bylaws as amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours. ARTICLE 7 Amendments Section 7.01. Power of Shareholders . New Bylaws may be adopted or these Bylaws may be amended or repealed by the vote or written assent of shareholders entitled to exercise a majority of the voting power of the Corporation, unless a greater number is required by law, by the Articles of Incorporation or by these Bylaws. Section 7.02. Power of Directors . Subject to the right of shareholders as provided in Section 7.01 of this Article 7 to adopt, amend or repeal Bylaws, Bylaws may be adopted, amended, or repealed by the Board of Directors; provided, however, that a Bylaw or amendment thereof changing the authorized number of Directors may be adopted, amended or repealed only. by the shareholders, except that if a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a Bylaw or amendment thereof fixing the exact number of Directors within the limits specified in the Articles of Incorporation or these Bylaws may be adopted, amended or repealed by the Board of Directors. I, the undersigned, being the Secretary of Potomac Aircraft Leasing Corporation, do D hereby certify the foregoing to be the Bylaws of said corporation, as adopted at a meeting of the Board of Directors held on the 23eday of November, 1993.
		/s/ WM. SHAPIRO WILLIAM DANA SHAPIRO Secretary to the Corporation

CERTIFICATE OF INCORPORATION OF Potomac Capital Investment Corporation
1. The name of the Corporation is:
Potomac Capital Investment Corporation
2. The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted is:
To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to one Thousand Dollars ($1,000.00).
5A The name and mailing address of each incorporator is as follows:
NAME	MAILING ADDRESS
V. A. Brookens D. L. Sipple M. C. Kinnamon	100 West Tenth Street Wilmington, Delaware 19801 100 West Tenth Street Wilmington, Delaware 19801 100 West Tenth Street Wilmington, Delaware 19801
5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows:
NAME	MAILING ADDRESS
H. Lowell Davis Stanley J. Bright Edward A. Caine	1900 Pennsylvania Avenue, N.W. Suite 803 Washington, D.C, 20068
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
8. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Elections of directors need not be by written ballot unless the by-laws of the Corporation Shall so provide.
9. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 31 ^st day of October, 1983.
	/s/ V. A. BROOKENS V. A. Brookens /s/ D. L. SIPPLE D. L. Sipple /s/ M. C. KINNAMON M. C. Kinnamon

CERTIFICATE OF CHANGE OF REGISTERED AGENT AND REGISTERED OFFICE ****
Potomac Capital Investment Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
The present registered agent of the corporation is The Corporation Trust Company and the present registered office of the corporation is in the County of New Castle.
The Board of Directors of Potomac Capital Investment Corporation adopted the following resolution on the 30 ^th day of November, 1983.
	RESOLVED, that the appropriate officers of the Corporation are authorized to take such steps as may be necessary or convenient to amend the Certificate of Incorporation to provide that the registered office of the Corporation shall be established and maintained at 1100 North Market Street, in the City of Wilmington, State of Delaware, and in order to provide that the name of the registered agent at such address is Wilmington Trust Company.
IN WITNESS WHEREOF, Potomac Capital Investment Corporation has caused this statement to be signed by H. Lowell Davis, its President and attested by Thomas E. O'Dea, its Vice President and Secretary, this 19 ^th Day of June, 1984.
By /s/ THOMAS E. O'DEA Vice President and Secretary		By /s/ H. L. DAVIS President

CERTIFICATE OF CHANGE OF REGISTERED AGENT AND REGISTERED OFFICE ****
Potomac Capital Investment Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
The present registered agent of the corporation is Wilmington Trust Company and the present registered office of the corporation is in the County of New Castle.
The Board of Directors of Potomac Capital Investment Corporation adopted the following resolution on the 19 ^th day of November, 1984.
	RESOLVED, that the appropriate officers of the Corporation are authorized to take such steps as may be necessary or convenient to amend the Certificate of Incorporation to provide that the registered office of the Corporation shall be established and maintained at 1100 North Market Street, In the City of Wilmington, State of Delaware, and in order to provide that the name of the registered agent at such address is Financial Services (Delaware), Inc.
IN WITNESS WHEREOF, Potomac Capital Investment Corporation has caused this statement to be signed by H. Lowell Davis, Its President and attested by Thomas E. O'Dea, its Vice President and Secretary, this 4 ^th Day of December, 1984.
By /s/ THOMAS E. O'DEA Vice President and Secretary		By /s/ H. L. DAVIS President

RESTATED CERTIFICATE OF INCORPORATION OF Potomac Capital investment Corporation
Potomac Capital Investment Corporation, a corporation organized and existing under the laws of the State of Delaware, in accordance with sections 242 and 245 of the General Corporations Law of Delaware hereby certifies as follows:
1. The name of the corporation 1s Potomac Capital Investment Corporation. The corporation's original certificate of incorporation was filed on October 31, 1983.
2. This Restated Certificate of Incorporation restates and amends the original Certificate of Incorporation of this corporation.
3. The text of the original Certificate of Incorporation hereby amended to read as herein set forth in full:
1. The name of the corporation is:
Potomac Capital Investment Corporation
2. The address of its registered office in the State of Delaware 1100 North Market Street, in the City of Wi1mington, County of New Castle. The name of its registered agent at such address is Financial Services; (Delaware), Inc.
3. The nature of the business or purposes to be conducted or promoted is:
To engage in any lawful act or activity for which corporations ma be organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) and the par value of each of such shares is One Dollar ($1.00) amountin9 in the agregate to One Thousand Dollars ($1,000.00).
5A. The name and mailing address of each incorporator is as follows:
NAME		MAILING ADDRESS
V. A. Brookens D. L. Sipple M. C. Kinnamon		100 West Tenth Street Wilmington, Delaware 19801 100 West Tenth Street Wilmington, Delaware 19801 100 West Tenth Street Wilmington, Delaware 19801
5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows:
NAME		MAILING ADDRESS
H. Lowell Davis Stanley J. Bright Edward A. Caine		1900 Pennsylvania Avenue, N.W. Suite 803 Washington, D.C, 20068
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
8. No director shall be personally liable to the corporation or the stockholders for monetary damages for breach of fiduciary duty as a director except.
(i) for any breach of his duty of loyalty to the corporation or the stockholders;
(ii) for acts or omissions not in good faith or which involve j intentional misconduct or a knowing violation of law;
(iii) for the unlawful payment of dividends or unlawful stock repurchases (as to which a negligence standard will apply); or
(iv) for any transaction from which the director derived an improper personal benefit.
9. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide.
10. The corporation reserves the right to amend, alter, change or repeal any provision contained In this certificate of incorporation, In the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
Dated this 9th day of February, 1987
ATTEST: By /s/ DONALD K. JAMES Donald K. James Secretary	POTOMAC CAPITAL INVESTMETN CORPORATION By /s/ EDWARD A. CAINE Edward A. Caine President

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 04/23/1999 991163686 - 3032095
CERTIFICATE OF INCORPORATION OF PEPCO HOLDINGS MERGER INC.
For the purpose of organizing a corporation for conducting the business end promoting the purposes hereinafter stated under the provisions, and subject to the requirements, of the General Corporation Law of the State of Delaware, the undersigned, a natural person, hereby certifies that:
FIRST: The name of the corporation is Pepco Holding Merger Inc, (hereinafter the "Corporation").
SECOND: The address, including street number, city and county of the registered office of the Corporation in the State of Delaware is do Corporation Service Company, 1013 Centre Road, Wilmington Delaware 19805-1297. The name of the registered agent of the Corporation at such address is Corporation Service Company, in the county of New Castle.
THIRD: The Corporation is organized under the General Corporation Law of the State of Delaware for the purposes of engaging in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The duration of the Corporation shall be perpetual.
FIFTH: The Corporation has authority to issue a total of one thousand (1,000) shares of common stock, all of one class, having a par value of one dollar ($1.00) per share, for a total authorized par value capital of one thousand dollars ($1,000).
SIXTH: The name and mailing address of the incorporator of the Corporation are as follows:
Name		Mailing Address
William Dana Shapiro		c/o Potomac Capital Investment Corporation 1801 K. Street, N.W. Suite 900 Washington, D.C. 20006
The powers of the incorporator will terminate upon filing of this Certificate of Incorporation.
SEVENTH: The number of directors of the Corporation shall be set forth in the by-laws of the Corporation, which number may be increased or decreased pursuant to the by-laws of the Corporation. The Boat of Directors is authorized to make, alter or repeal by-laws of the Corporation. The Board of Directors may be elected by other than written ballot. The names and mailing addresses of the persons who are to serve as directors of the Corporation until the first annual meeting of stockholders or until their successors are elected and quality are as follows:
	Name	Mailing Address
	John M. Derrick, Jr. Edward R. Maybeny John D. McCallum William Dana Shapiro William T. Torgerson Dennis R. Wraase	1900 Pennsylvania Avenue, N.W. 2000 K Street, N.W., Suite 750 Washington, D.C. 20006 1801 K Street, N.W., Suite 900 Washington, D.C. 20006 1801 K. Street, N.W., Suite 900 Washington, D.C. 20006 1900 Pennsylvania Avenue, N.W. Washington, D.C. 20068 1900 Pennsylvania Avenue, N.W. Washington, D.C. 20068
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of General Corporation Law of the Stale of Delaware or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware, etc a meeting of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing at least three-fourths in value of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has bean made, be biding on all the creditors or class of creditors, and/or on all the stockholders, of the Corporation, as the case may be, and also on the Corporation.
NINTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, and all such liability is hereby eliminated; provided, however, that the foregoing shall not eliminate or limit the liability of a director (J) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit.
TENTH: The Corporation by action of its board of directors, shall indemnify any person who was or is a director, officer, agent and/or employee of the Corporation to the fullest extent allowed under Section 145 of the General Corporation Law of the State of Delaware from and against any and all of the expenses, liabilities, or other matters referred to in or covered by such Section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action by such person in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the heirs, executors and administrators of such a person.
ELEVENTH: The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware regarding business combinations with interested stockholders.
TWELFTH: Any amendment of this Certificate of Incorporation shall be made and effected only in the manner set forth herein. The board of directors shall adopt a resolution, by affirmative vote of at least two-thirds (2/3) of the directors then in office, at a meeting called for that purpose, setting forth the proposed amendment, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in Wed thereof for the consideration of such amendment or directing that the proposed amendment be considered at the next annual meeting of stockholders. In order to be adopted, each proposed amendment to this Certificate of Incorporation must be approved by the affirmative vote of a majority of the outstanding shares of each class and series, if any, entitled to vote thereon.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware. Do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 23 ^rd day of April, 1999.
		/s/ WM. SHAPIRO William Dana Shapiro, Incorporator

CERTIFICATE OF MERGER PEPCO HOLDINGS MERGER INC. INTO POTOMAC CAPITAL INVESTMENT CORPORATION
The undersigned corporation organized under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That the name and the state of incorporation of each of the constituent corporations of the merger is:
	Name	State of Incorporation
	Pepco Holdings Merger Inc. Potomac Capital Investment Corporation	Delaware Delaware
SECOND: That an agreement and plan of merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 251 of Title 8 of the General Corporation Law of the State of Delaware.
THIRD: That the name of the surviving corporation of the merger is Potomac Capital Investment Corporation.
FOURTH: That the Certificate of Incorporation of Potomac Capital Investment Corporation shall be the Certificate of Incorporation of the surviving corporation.
FIFTH: That the executed agreement and plan of merger is on file at the principal place of business of the surviving corporation. The address of the principal place of business of the surviving corporation is Suite 900, 1801 K Street, N.W., Washington, D.C. 20006.
SIXTH: That a copy of the agreement and plan of merger will be furnished by the surviving corporation, on request and without cost, to any shareholder of either constituent corporation.
SEVENTH: That the Merger shall be effective immediately upon filing.
IN WINESS WHEREOF, the surviving corporation has caused this certificate to be executed by its President and attested by its Secretary this 27 ^th day of May, 1999.
ATTEST: /s/ JOY A. JOHNSON Joy A. Johnson Corporate Secretary and Associate General Counsel		POTOMAC CAPITAL INVESTMENT CORPORATION By: /s/ WM. SHAPIRO William Dana Shapiro Senior Vice President and General Counsel
		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 06/03/1999 991223207 - 2020271

BY-LAWS

Potomac Capital Investment Corporation
(a Delaware Corporation)

As amended
through
March 12, 2001

POTOMAC CAPITAL INVESTMENT CORPORATION

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Potomac Capital Investment Corporation (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Article III

DIRECTORS

Section 1. The Board of Directors shall consist of not less than one and not more than seven persons. The Directors need not be shareholders. Each director shall hold office until his or her successor is elected and qualified, or until the Director's earlier death or resignation or removal in the manner hereafter provided.

Section 2. Five members of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, or by these By-Laws, be the acts of the Board of Directors.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 8. (a) The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate an Executive Committee consisting of three directors. Except as otherwise provided by law, the Executive Committee shall have and may exercise, when the Board is not in session, all of the powers of the Board in the management of the property, business and affairs of the Corporation; but the Executive Committee shall not have power to fill vacancies in the Board, or to change the membership of, or to fill vacancies in, the Executive Committee, or to adopt, alter, amend or repeal by-laws of the Corporation. The Executive Committee may make rules for the conduct of its business and fix the time and place of its meetings, and may appoint such committees and assistants as it shall from time to time deem necessary. A majority of the members of the Executive Committee shall constitute a quorum, and the acts of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the acts of said Committee.

All action taken by the Executive Committee shall be reported to the Board at its regular meeting next succeeding the taking of such action.

(b) The Board of Directors may also, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Section 10. The Board of Directors shall fix the compensation to be paid to each director who is not a salaried employee of the Corporation or of the Corporation's parent company for serving as a director and for attendance at meetings of the Board and committees thereof, and may authorize the payment to directors of expenses incurred in attending any such meeting or otherwise incurred in connection with the business of the Corporation. This By-Law shall not be construed to preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor.

ARTICLE IV

INDEMNIFICATION

The Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification of the director, officer, employee or agent is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include expenses (including attorneys' fees), judgment, fines and amounts paid in settlement. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding and the repayment of such advancements will be required only if it shall ultimately be determined that the director, officer, employee or agent who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

Article V

OFFICERS

Section 3. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation, and each division of the Corporation, shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation, or in the case of divisional officers their respective divisions, as by custom generally pertain to their respective offices, as well a such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

Article IX

AMENDMENTS

Any By-Laws (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF Potomac Capital Joint Leasing Corporation 1. The name of the corporation is: Potomac Capital Joint Leasing Corporation 2. The address of its registered office in the state of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is on thousand (1,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000,00). 5A. The name and mailing address of each incorporator is as follows:
NAME V. A. Brookens D. L. Sipple M. C. Kinnamon	MAILING ADDRESS 100 West Tenth Street Wilmington, Delaware 19801 100 West Tenth Street Wilmington, Delaware 19801 100 West Tenth Street Wilmington, Delaware 19801
5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows:
NAME H. Lowell Davis Stanley J. Bright Edward A. Caine	MAILING ADDRESS 1900 Pennsylvania Avenue, NW Suite 803 Washington, D.C. 20068
6. The corporation is to have perpetual existence 7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized: To make, alter or repeal the by-laws of the corporation 8. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide. 9. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. WE, THE UNDERSIGNED, being each of the incorporators here in before named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 31 ^st day of October, 1983.
	/s/ V. A. Brookens V. A. Brookens /s/ D. L. Sipple D. L. Sipple /s/ M. C. Kinnamon M.C. Kinnamon

CERTIFICATE OF CHANGE OF REGISTERED AGENT AND REGISTERED OFFICE Potomac Capital joint Leasing Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: The present registered agent of the corporation is The Corporation Trust Company and the present registered office of the corporation is in the County of New Castle. The Board of Directors of Potomac Capital Joint Leasing Corporation adopted the following resolution on the 19th day of November, 1984.
	RESOLVED, that the appropriate officers of the Corporation are authorized to take such steps as may be necessary or convenient to amend the Certificate of Incorporation to provide that the registered office of the Corporation shall be established and maintained at 1100 North Market Street, in the City of Wilmington, State of Delaware, and in order to provide that the name of the registered agent at such address is Financial Services (Delaware), Inc.
IN WITNESS WHEREOF, Potomac Capital Joint Leasing Corporation has caused this statement to be signed by H. Lowell Davis, its President and attested by Thomas E. O' Dea, its Vice President and Secretary, this 4 ^th day of December, 1984.
ATTEST: By: /s/ Thomas E. O'Dea Vice President and Secretary		By /s/ H. L. DAVIS President

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 11/06/1992 923115283 - 2020272
CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION AFTER PAYMENT OF CAPITAL OF POTOMAC CAPITAL JOINT LEASING CORPORATION PURSUANT TO SECTION 242 OF THE GENERAL CORPORATION LAW The undersigned, being the president and secretary of Potomac Capital Joint Leasing Corporation, hereby certify that: 1. The name of the Corporation is Potomac capital Joint Leasing Corporation. 2. A Certificate of Incorporation was filed in the Office of the Secretary of State of Delaware on October 31, 1983 and a certified copy thereof was recorded on October 31, 1983 in the office of the Recorder of Deeds of New Castle County, Delaware. 3. ARTICLE 4 of the Certificate of Incorporation of the Corporation which deals with authorized shares is hereby amended to increase the aggregate number of shares which the Corporation shall have authority to issue from 1,000 shares of the par value of $1per share to 2,000 shares of the par value of $1 per share. To effect such amendment, ARTICLE 4 is hereby amended to read as follows:
	4. The total number of shares of stock which the Corporation shall have authority to issue is two thousand (2,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to Two Thousand Dollars ($2,000.00).
4. The capital of the Corporation will not be reduced under or by reason of the foregoing amendment. 5. The foregoing amendment to the certificate of incorporation has been duly adopted in accordance with the applicable provisions of Section 228 and Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Potomac Capital Joint Leasing Corporation has caused its corporate seal to be hereunto affixed and this Certificate' to be signed by the president of the Corporation, and attested by its secretary this 3 ^rd day of November , 1992.
		/s/ PAUL F. NAUGHTON Paul F. Naughton President
[SEAL] Attest: /s/ WM. SHAPIRO William Dana Shapiro Secretary District of Columbia ) ss: BE IT REMEMBERED, that on this 3rd day of November , 1992, personally appeared before me Paul F. Naughton, known to me personally to be such, who executed the foregoing Certificate of Amendment of the Certificate of Incorporation, and acknowledged that he is the President of Potomac Capital Joint Leasing Corporation, that he executed the foregoing document as President of said corporation, and that the statements contained therein are true. IN WITNESS WHEREOF, I have hereunto set my hand and seal of office and day and year aforesaid.
		/s/ CHERYL A. LONGENECKER Notary Public My Commission Expires: 1-31-95

CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED

OFFICE AND REGISTERED AGENT

POTOMAC CAPITAL JOINT LEASING CORPORATION

The Board of Directors of:

POTOMAC CAPITAL JOINT LEASING CORPORATION

a Corporation of the State of Delaware, on this _ 9th _ day of __ June __, A.D. 1997, do hereby resolve and order that the location of the Registered Office of this Corporation within this State be, and the same hereby is:

1013 Centre Road, in the City of Wilmington, in the County of New Castle, Delaware, 19805.

The name of the Registered Agent therein and in charge thereof upon whom process against the Corporation may be served, is: CORPORATION SERVICE COMPANY.

POTOMAC CAPITAL JOINT LEASING CORPORATION

a Corporation of the State of Delaware, does hereby certify that the foregoing is a true copy of a resolution adopted by the Board of Directors at a meeting held as herein stated.

IN WITNESS WHEREOF, said corporation has caused this Certificate to be signed by Secretary this 9 ^th day of June A.D. 1997.

   STATE OF DELAWARE
   SECRETARY OF STATE
DIVISION OF CORPORATIONS
  FILED 09:00 AM 06/20/1997
        971207047 - 2020272

/s./ LESLIE C. ZIMBERG
Authorized Officer

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

By-Laws

Potomac Capital Joint Leasing Corporation

(a Delaware corporation)

As amended
through
September 25, 1986

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

Potomac Capital Joint Leasing Corporation

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Potomac Capital Joint Leasing Corporation (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETINGS OF SHAREHOLDERS

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Article III

DIRECTORS

Section 3. (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

(c) Vacancies in the Board 'and newly created directorships resulting from any increase in-the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 8. The Board of Directors may also, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more other committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to an officer, director, or employee of the Corporation or of any wholly-owned subsidiary of the Corporation (Subsidiary), the Corporation shall indemnify, and with respect to any other individual the Corporation may indemnify, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (including an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation or of such Subsidiary, or is or was serving at the request of the Corporation or of such Subsidiary as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in the manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; except in relation to matters as to which he shall be finally adjudged in such action, suit or proceeding to be liable for gross negligence or willful misconduct in the performance of his duty to the Corporation or such Subsidiary. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation or' such Subsidiary or a presumption that he was guilty of gross negligence or willful misconduct, or with respect to any criminal action or proceeding, a presumption that he had reasonable cause to believe that his conduct was unlawful.

Any indemnification (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth above. Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the shareholders.

Expenses incurred in defending an action, suit or proceeding, whether civil, criminal , administrative, arbitrative or investigative, shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in the preceding paragraph upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this section.

It is the intention of the Corporation that the indemnification set forth in this Article IV shall be applied to no less extent than the maximum indemnification permitted by law. Such indemnification shall be in addition to, and not exclusive of, any other rights to which those indemnified may be entitled under any by-law, agreement, vote of shareholders, or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and inure to the benefit of such person's heirs, executors, and administrators.

Article V

OFFICERS

Section 2. The term of office. of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed, Election or appointment of an officer or agent shall not of itself create contract rights.

Section 3. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business 'and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF Potomac Capital Markets Corporation 1. The name of the corporation is: Potomac Capital Markets Corporation 2. The address of its registered office in the State of Delaware is 1100 North Market Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is Financial Services (Delaware), Inc. 3. The nature of the business or purpose to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00). 5A. The name and mailing address of each incorporator is as follows
NAME Stanley J. Bright Edward A. Caine Donald K. James	MAILING ADDRESS 1901 Pennsylvania Avenue, N.W. Washington, D.C. 20006 1901 Pennsylvania Avenue, N.W. Washington, D.C. 20006 1901 Pennsylvania Avenue, N.N. Washington, D.C. 20006
5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows:
NAME H. Lowell Davis Stanley J. Bright Edward A. Caine	MAILING ADDRESS Suite 803 1900 Pennsylvania Avenue, N.W. Washington, D.C. 20068 Suite 1100 1901 Pennsylvania Avenue, N.W. Washington, D.C. 20006 Suite 1100 1901 Pennsylvania Avenue, N.W. Washington, D.C. 20006
6. The corporation is to have perpetual existence. 7. In furtherance and not in limitation of the powers conferred by statute, the' board of directors is expressly authorized: To make, alter or repeal the by-laws of the corporations 8. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide. 9. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. WE, THE UNDERSIGNED, being each of the incorporators herein before named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 22 ^nd day of February, 1985.
RECEIVED FOR RECORD FEB 25 1985 LEO J. DUGAN, Jr., Recorder	/s/ S. J. BRIGHT Stanley J. Bright /s/ EDWARD A. CAINE Edward A. Caine /s/ DONALD K. JAMES Donald K. James

CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED

OFFICE AND REGISTERED AGENT

POTOMAC CAPITAL MARKETS CORPORATION

The Board of Directors of:

POTOMAC CAPITAL MARKETS CORPORATION

a Corporation of the State of Delaware, on this 9 ^th day of June, A.D. 1997, do hereby resolve and order that the location of the Registered Office of this Corporation within this State be, and the same hereby is:

1013 Centre Road, in the City of Wilmington, in the County of New Castle, Delaware, 19805.

The name of the Registered Agent therein and in charge thereof upon whom process against the Corporation may be served, is: CORPORATION SERVICE COMPANY.

POTOMAC CAPITAL MARKETS CORPORATION

a Corporation of the State of Delaware, does hereby certify that the foregoing is a true copy of a resolution adopted by the Board of Directors-at a meeting held as herein stated.

IN WITNESS WHEREOF, said corporation has caused this Certificate to be signed by its Secretary this 9 ^th day of June, A.D. 1997.

      STATE OF DELAWARE
      SECRETARY OF STATE
DIVISION OF CORPORATIONS
   FILED 09:00 AM 06/20/1997
      971207115 - 2055640

/s/ WM. SHAPIRO
Authorized Officer
WILLLIAM SHAPIRO

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

By-Laws

Potomac Capital Markets Corporation

(a Delaware corporation)

As amended

through

September 25, 1986

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

Potomac Capital Markets Corporation

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Potomac Capital Markets Corporation (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETINGS OF SHAREHOLDERS

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Article III

DIRECTORS

Section I. The Board of Directors of the Corporation shall consist of two persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

Section 2. One member of the Board shall constitute a quorum for the transaction of business. The acts of a-majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation, or by these By-Laws, be the acts of the Board of Directors.

Section 3. (a) Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

(c) The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day-on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

Section 5. The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual-meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 8. The Board of Directors may also, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more other committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to a Company officer, director, or employee of the Company or of any wholly-owned subsidiary of the Company (Subsidiary), the Company shall indemnify, and with respect to any other individual the Company may indemnify, any person who was or is a party or is threatened to be made a party of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (including an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Company or of such Subsidiary, or is or was serving at the request of the Company or of such Subsidiary as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in the manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; except in relation to any Claim, issue or matter, as to which he shall be finally adjudged in such action, suit or proceeding to be liable for gross negligence or willful misconduct in the performance of his duty to the Company or such Subsidiary. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or such Subsidiary, or a presumption that he was guilty of gross-negligence or willful misconduct, or, with respect to any criminal action or proceeding, a presumption that he had reasonable cause to believe that his conduct was unlawful.

Any indemnification (unless ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard Of conduct set forth above. Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the shareholders.

Such indemnification shall be in addition to, and not exclusive of, any other rights to which those indemnified may be entitled under any other by-law of the Company or such Subsidiary, agreement, vote of shareholders, or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee, or agent of the Company or of such Subsidiary and insure to the benefit of such person's heirs, executors, and administrators.

Article V

OFFICERS

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

       STATE OF DELAWARE
       SECRETARY OF STATE
DIVISION OF CORPORATIONS
  FILED 09:00 AM 05/20/1999
      991202077 - 3045628

CERTIFICATE OF INCORPORATION

POTOMAC DELAWARE LEASING CORPORATION

FIRST. The name of this corporation shall be:

POTOMAC DELAWARE LEASING CORPORATION

SECOND. Its registered office in the State of Delaware is to be located at 1013 Centre Road, in the City of Wilmington, County of New Castle and its registered agent at such address is CORPORATION SERVICE COMPANY.

THIRD. The purpose or purposes of the corporation shall be:

To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH. The total number of shares of stock which this corporation is authorized to issue is:

One Thousand (1,000) shares with a par value of One Dollar ($1.00) per share, amounting to One Thousand Dollars.

FIFTH. The name and address of the incorporator is as follows:

                              Kerry Starr
                              Corporation Service Company
                              1013 Centre Road
                              Wilmington, DE 19805

SIXTH. The Board of Directors shall have the power to adopt, amend or repeal the by-laws.

SEVENTH. No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law, (i) for breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article Seventh shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.

IN WITNESS WHEREOF, the undersigned, being the incorporator herein before named, has executed, signed and acknowledged this certificate of incorporation this twentieth day of May, A.D., 1999.

/s/ KERRY STARR
Kerry Starr
Incorporator

BY-LAWS

Potomac Delaware Leasing Corporation
(a Delaware Corporation)

May 20, 1999

POTOMAC DELAWARE LEASING CORPORATION

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Potomac Delaware Leasing Corporation (hereinafter called the "Corporation") shall be in the City of Wilmington; County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

Section 2. A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Article III

DIRECTORS

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending. or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

Section 2. The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract fights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

Section 3. Subject to 'such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom 'generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By - Law (including these By - Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

DEAN HELLER Secretary of State 101 North Carson Street, Suite 3 Carson City, Nevada 89701-4786 (775) 684-5708			Articles of Incorporation (PURSUANT to NRS 78)		FILED # C13383-99 JUN 01 1999 I N THE OFFICE OF DEAN HELLER SECRETARY OF STATE
___________________________________________________________ Important: Read attached instructions before completing form.
1.	Name of Corporation:	Potomac Equipment Leasing Corporation
2.	Resident Agent Name and Street Address: (must be a Nevada address where process may be served)	CSC SeRvICES OF NEVADA, INC . Name 502 East John St Carson City NEVADA 89706 Street Address City Zip Code
3.	Shares: (No. of shares corporation authorized to issue)	Number of shares Number of shares with par value: 1,000 par value : $1 without par value: 0
4.	Governing Board: (Check one)	Shall be styled as X Directors or _______Trustees
	Names, Addresses, Number of Board of Directors/Trustees:	The First Board of Directors/Trustees shall consist of__ 5 _ __members whose names and addresses are as follows: See attached list _____ __________________ Name Name _______________________ _______________________ Address City, State, Zip Address City, State, Zip
5.	Purpose: ( Optional - See Instructions)	The purpose of this Corporation shall be: To engage in any lawful act or activity for which corporations may be organized in the State of Nevada.
6.	Other Matters: (See instructions)	Number of additional pages attached______
7.	Names, Addresses and Signatures of Incorporators: (Signatures must be notarized) Attach additional pages if there are more than 2 incorporators.	Joy A. Johnson, Secretary ___________________ Name Name 1801 K Street, Suite 900, Washington , DC 2006 _______________ Address City, State, Zip Address City, State, Zip _________________________ /s/ JOY A. JOHNSON Signature Signature
	Notary:	This instrument was acknowledged before me on his instrument was acknowledged before me on ______ May 28, 1999 by ___________________________________ by Joy A. Johnson Name of person Name of person As incorporator As incorporator of Potomac Equipment Leasing Corp. of (Name of party on behalf of whom (Name of party on behalf of whom instrument is executed) instrument is executed) /s/ Maggie O. Westfield _____________________________ Notary Public Signature Notary Public Signature (affix notary stamp or seal) (affix notary stamp or seal)
8.	Certificate of Acceptance of Appointment of Resident Agent:	I, CSC SERVICES OF NEVADA, INC. hereby accept appointment as Resident Agent for the above named corporation _/s/ Jennifer L. Oliver _ Jennifer L. Oliver ___ May 28, 1999 __ Signature of Resident Agent Date
This form must be accompanied by appropriate fees. See attached fee schedule				Nevada Secretary of State Form CORpArT1999.01 Revised on: 02/12/99

BY-LAWS

Potomac Equipment Leasing Corporation
(a Nevada Corporation)

June 1, 1999

POTOMAC EQUIPMENT LEASING CORPORATION

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Potomac Equipment Leasing Corporation (hereinafter called the Corporation") shall be in Carson City, State of Nevada.

Section 2. The Corporation may also have offices at other places both within and without the State of Nevada.

Article II

MEETING OF SHAREHOLDERS

Section 1. The annual meeting of the shareholders' for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Nevada to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

Section 2. A special meeting of the. shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Section 3. Any action required by the laws of the State of Nevada to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

Section 4. (a) As soon as practicable after each annual election of' directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section of this Article.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

(c) he Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

(d) The Board may hold its meetings at such place or places within or without the State of Nevada as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

Section 7. Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board Or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the' manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Nevada and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

Article VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation Shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Nevada or the Certificate of Incorporation.

STATE OF MARYLAND

I hereby certify that this is a true and complete copy of the 4 page document on file in this office, DATED: 3-4-93

STATE DEPARTMENT OF ASSESSMENTS AND TAXATION

BY: /s/ B. J. SWOBODA
This stamp replaces our previous certification system. Effective: 10/84

ARTICLES OF INCORPORATION OF POTOMAC HARMANS CORPORATION
FIRST: I, Ellen Sheriff Rogers, whose post office address is 3100 Leland Street, Chevy Chase, Maryland 20815, being at least eighteen years of age, do hereby form a corporation under the Laws of the State of Maryland.
SECOND: The name of the Corporation is Potomac Harmans Corporation.
THIRD: The purposes for which the corporation is formed are:
To engage in any or all lawful business for which corporations may be incorporated under the Maryland General Corporation Law.
In general, to possess and exercise all the purposes, powers, rights and privileges granted to, or conferred upon corporations by the Laws of the State of Maryland now or hereafter in force, and to exercise any powers suitable, convenient or proper for the accomplishment of any of the purposes herein enumerated, implied or incidental to the powers or purposes herein specified, or which at any time may appear conducive to or expedient for the accomplishment of any of such purposes.
The foregoing shall, except where otherwise expressed, be in no way limited or restricted by reference to or inference from the terms of any other clause of this or any other article of these Articles of Incorporation or of any amendment thereto, and shall each be regarded as independent, and construed as powers as well as purposes.
FOURTH: The post office address of the principal office of the corporation in Maryland is 32 South Street, Baltimore, Maryland 21202. The name and address of the resident agent is The Corporation Trust Incorporated. Said resident agent is a Maryland corporation.
FIFTH: The total number of shares of stock which the corporation shall have authority to issue is 1,000 shares of common stock, all of one class, of the par value of one Dollar ($1.00) each and of the aggregate par value of One Thousand Dollars ($1,000).
SIXTH: The number of directors of the corporation shall be three (3), which number may be increased or decreased pursuant to the Bylaws of the corporation, but shall never be less than three (3); provided that if at any time, the corporation has less than three stockholders, the number of directors may be less than three but not less than the number of stockholders. The names of the directors who shall act until the first annual meeting or until their successors are duly chosen and qualified are: H. Lowell Davis, Paul F. Naughton and Frank J. Spingler.
SEVENTH: The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the corporation and of the directors and stockholders:
The board of directors of the corporation is hereby empowered to authorize the issuance from time to time of shares of its stock of any class, whether now or hereafter authorized, or securities convertible into shares of its stock of any class or classes, whether now or hereafter authorized.
No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class or of securities convertible into shares of stock of any class, whether now or hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.
EIGHTH: The duration of the corporation shall be perpetual.
IN WITNESS WHEREOF, the undersigned incorporator of Potomac Harmans Corporation, who executed the foregoing Articles of Incorporation, hereby acknowledges the same to be her act and further acknowledges that, to the best of her knowledge, the matters and facts set forth therein are true in all material respects under the penalties of perjury.
Dated this 25th day of February, 1993.
	/s/ ELLEN SHERIFF ROGERS Ellen Sheriff Rogers

CERTIFICATE OF CHANGE OF RESIDENT AGENT AND ADDRESS OF POTOMAC HARMANS CORPORATION
The Board of Directors of:
POTOMAC HARMANS CORPORATION
a corporation organized in Maryland on March 3, 1993 duly approved a resolution as follows:
RESOLVED: That the resident agent and address are changed to:
CSC-Lawyers Incorporating Service Company 11 East Chase Street Baltimore, MD 21202
I, William Dana Shapiro certify under the penalties of perjury that to the best of my knowledge, information, and belief the foregoing resolution is true in all material respects
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION APPROVED FOR RECORD 6-23-97 at 3:29 P.M.	POTOMAC HARMANS CORPORATION By: /s/ WM. SHAPIRO William Dana Shapiro - Secretary Type name and title

BYLAWS

OF

POTOMAC HARMANS CORPORATION

ARTICLE I

Offices

Section 1. Resident Agent . The name of the initial resident agent in the State of Maryland is The Corporation Trust Incorporated and the address of the initial resident agent is 32 South Street, Baltimore, Maryland 21202.

Section 2. Principal Office . The initial address of the principal office of the corporation is 7529 Harmans Road, Harmans, Maryland 21077.

Section 3. Additional Offices . The corporation may also have business offices at such places both within and without the State of Maryland as the board of directors may from time to time determine.

ARTICLE II

Stockholders' Meetings

Section 1. Place of Meetings . Meetings of the stockholders shall be held at the principal office of the corporation or at such other place, within or without the State of Maryland, as the board of directors may from time to time select.

Section 2. Annual Meeting . An annual meeting of the stockholders shall be held in March of each year at such time and date during that month as shall be designated by the board of directors. At such meeting the stockholders shall transact any business lawfully before them, and shall elect the board of directors. Any business of the corporation may be transacted at the annual meeting without being specifically designated in the notice, except such business as is specifically required by the laws of the State of Maryland to be stated in the notice.

Section 3. Special Meetings . Special meetings of the stockholders may be called by the president or secretary, by a majority of the board of directors or by request to the secretary by the holders of not less than twenty-five percent (25%) of the shares outstanding and entitled to vote at such meeting; provided that unless requested by stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting, the secretary shall not be required to call a special meeting to consider any matter which is substantially the same as a matter voted on at any special meeting of the stockholders held during the twelve (12) months preceding the request to call such new special meeting.

Section 4. Notice of Meetings . A written or printed notice of each stockholders meeting, stating the place, day and hour of the meeting, and in case of a special meeting the purpose or purposes of the meeting, shall be given by the secretary of the corporation or by the person authorized to call the meeting to each stockholder of record entitled to vote at the meeting. This notice shall be sent not less than ten (10) nor more than ninety (90) days before the date of the meeting by personal delivery, by mail or by telegram, charges prepaid, to the address of the stockholder which appears on the books of the corporation.

Section 5. Waiver of Notice . A stockholder, either before or after a stockholders' meeting, may waive notice of the meeting; and his waiver shall be deemed the equivalent of giving notice. Attendance at a stockholders' meeting, either in person or by proxy, of a person entitled to notice shall constitute a waiver of notice of the meeting unless he attends for the express purpose of objecting to the transaction of business on the ground that the meeting was not lawfully called or convened.

Section 6. Business of Special Meetings . Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 7. Voting Rights . Subject to the provisions of the laws of the State of Maryland, each holder of capital stock in the corporation shall be entitled at each stockholders' meeting to one vote for every share of stock standing in his name on the books of the corporation.

Section 8. Proxies . A stockholder entitled to vote may vote in person or by proxy executed in writing by the stockholder or by his attorney-in-fact. A proxy shall not be valid after eleven (11) months from the date of its execution unless a longer period is expressly stated thereon.

Section 9. Quorum . The presence, in person or by proxy, of the holders of a majority of the shares outstanding and entitled to vote shall constitute a quorum at meetings of stockholders

Section 10. Majority . A majority of the votes cast at a meeting of stockholders, duly called and at which a quorum is present, shall be sufficient to take or authorize action upon any matter which may properly come before the meeting, unless more than a majority of the votes cast is required-by the articles of incorporation, by statute or by these bylaws.

Section 11. Adjournments . A meeting of stockholders convened on the date for which it was called may be adjourned prior to the completion of business thereat to a date not more than 120 days after the record date of the original meeting. Notice of a subsequent meeting held as a result of an adjournment, other than by announcement at the meeting at which the adjournment was taken, shall not be necessary. If a quorum is present or represented at such subsequent meeting, any business may be transacted thereat which could have been transacted at the meeting which was adjourned.

Section 12. Informal Action by Stockholders . Any action that may be taken at a meeting of stockholders may be taken without a meeting if a written consent setting forth the action shall be signed by all of the stockholders entitled to vote on the action and shall be filed with the secretary of the corporation. This consent shall have the same effect as a unanimous vote at a stockholders' meeting.

ARTICLE III

The Board of Directors

Section 1. Number, Qualifications and Term of Office. The business and affairs of the corporation shall be managed by a board of three (3) directors, who need not be residents of the State of Maryland nor hold shares in the corporation. The number of directors may be increased or decreased pursuant to amendment of these bylaws, but shall never be less than three; provided that if, at any time, the corporation has less than three stockholders, the number of directors may be less than three but not less than the number of stockholders. Each director, except one appointed to fill a vacancy, shall be elected to serve for the term of one year and until his successor shall be elected and shall qualify.

Section 2. Vacancies . Except as otherwise provided in this section 2, vacancies on the board of directors shall be filled by a majority of the remaining members of the board, even though less than a quorum of the entire board. Each director so selected shall serve until his successor is elected by the stockholders at the next annual meeting or at a special meeting earlier-called for that purpose and qualifies. Vacancies on the board of directors due to the removal of a directors or to an increase in the number of directors shall be filled only by the stockholders at an annual meeting or at a special meeting called for that purpose. A director elected by the stockholders to fill a vacancy which results from the removal of a director shall serve for the balance of the term of the removed director.

Section 3. Removal . At an annual meeting or at a special meeting of stockholders called for that purpose the entire board of directors or any individual director may be removed from office with or without assignment of cause only by the affirmative vote of a majority of all the votes entitled to be cast for the election of directors.

Section 4. Management . The business and affairs of the corporation shall be managed by its board of directors, which may exercise all of the powers of the corporation except such as are by law, by the articles of incorporation or by these bylaws conferred upon or reserved to the stockholders.

Section 5. Committees of Directors . The board of directors, by resolution adopted by a majority of the whole board, may appoint from among its members an executive committee and other committees composed of two or more directors which, to the extent provided in such resolution, shall have and may exercise all of the authority of the board of directors in the business and affairs of the corporation except the power to declare dividends or distributions on stock, to amend the bylaws, to issue stock other than in a manner prescribed in these bylaws, to recommend to the stockholders any action which requires stockholder approval or to approve any merger, consolidation or share exchange which does not require stockholder approval. Vacancies in the membership of the committee shall be filled by the board of directors at an annual or special meeting of the board of directors. Each committee shall keep regular minutes of its proceedings and report the same to the board when requested.

ARTICLE IV

Meetings of the Board of Directors

Section 1. Place of Meeting . The meetings of the board of directors may be held at the principal office of-the corporation or at any place within or without the State of Maryland that a majority of the board of directors may from time to time designate.

Section 2. Annual Meeting . The board of directors shall meet each year immediately after the annual meeting of the stockholders to elect officers and consider other business.

Section 3. Special Meetings . Special meetings of the board of directors may be called at any time by the president.

Section 4. Notice of Meetings . Written notice of each meeting of the board of directors shall be given to each director at least three (3) days before the meeting and shall set forth the time and place of such meeting. This notice may be given either personally, or by sending a copy of the notice by registered mail, return receipt requested, or by telegram, charges prepaid, to the address of each director appearing on the books of the corporation or to such other address as may be designated by such director in writing to the secretary of the corporation.

Section 5. Waiver of Notice . A director may waive in writing notice of a meeting of the board of directors either before or after the meeting; and his waiver shall be deemed the equivalent of giving notice. Attendance of a director at a meeting shall constitute waiver of notice of that meeting unless he attends for the express purpose of objecting to the transaction of business on the ground that the meeting was not lawfully called or convened.

Section 6. Quorum . At meetings of the board of directors a majority of the directors in office shall be necessary to constitute a quorum for the transaction of business. If a quorum is present, except as otherwise provided in these bylaws, the acts of a majority of the directors in attendance shall be the acts of the board.

Section 7. Participation By Conference Telephone. Members of the board of directors, or any committee thereof, may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this section shall constitute presence in person at such meeting.

Section 8. Adjournments . Any meeting of the board of directors may be adjourned prior to the completion of business thereat. Notice of such meeting held as a result of an adjournment, other than by announcement at the meeting at which the adjournment is taken, shall not be necessary. If a quorum is present at such subsequent meeting, any business may be transacted thereat which could have been transacted at the meeting which was adjourned.

Section 9. Informal Action . If all of the directors consent in writing to any action required or permitted to be taken at a meeting of the board of directors and the writing or writings evidencing their consent are filed by the secretary of the corporation with the minutes of proceedings of the board of directors, the action shall be as valid as though it had been taken at a meeting of the board.

ARTICLE V

Officers, Agents, and Employees

Section 1. Officers . The officers of the corporation shall be chosen by a majority vote of the board of directors, and shall consist of a president, one or more vice presidents, a secretary, and a treasurer. Other officers, assistant officers, agents and employees that the board of directors from time to time may deem necessary may be elected by the board or be appointed in a manner prescribed by the board. Two or more offices may be held by the same person, except that a person may not serve concurrently as both president and vice president. Officers shall hold office for one year and until their successors are chosen and have qualified, unless they sooner resign or are removed from office as provided in these bylaws.

Section 2. Vacancies . When a vacancy occurs in one of the offices by death, resignation, or otherwise, it shall be filled by the board of directors. The officer so selected shall hold office until his successor is chosen and qualified, unless he sooner resigns or is removed from office as provided in these bylaws.

Section 3. Salaries . The board of directors shall fix the salaries of the officers of the corporation. The salaries of other agents and employees of the corporation may be fixed by the board of directors or by an officer to whom that function has been delegated by the board.

Section 4. Removal of Officers and Agents . An officer or agent of the corporation may be removed by the board of directors if the board in its judgment finds that the best interests of the corporation will be served thereby.

Section 5. President . The president shall be the chief executive officer of the corporation and shall have general supervision of the business of the corporation. The president shall preside at all meetings of stockholders and directors, and shall present at each annual meeting of the stockholders a report of the business of the corporation for the preceding fiscal year. In the absence of any contrary designation by the board of directors, the president shall have the authority to execute all authorized contracts and other obligations-in the name of the corporation. The president also shall perform whatever duties and have whatever powers the board of directors may from time to time prescribe.

Section 6. Vice President . The vice president or vice presidents, if any, shall perform the duties of the president in the absence or disability of the president, and shall have such powers and perform such other duties as the board of directors may from time to time prescribe.

Section 7. Secretary. The secretary shall attend all meetings of the board of directors and of the stockholders and shall keep or cause to be kept a true and complete record of the proceedings of those meetings. The secretary shall keep the corporate seal of the corporation, and when directed by the president or by the board of directors shall affix it to any instrument requiring it. If required by statute or these bylaws, the secretary shall give, or cause to be given, notice of all meetings of the directors or of the stockholders. The secretary also shall perform whatever duties and have whatever powers the board of directors may from time to time prescribe.

Section 8. Treasurer . The. treasurer shall have custody of corporate funds and securities. The treasurer shall keep full and accurate accounts of receipts and disbursements and shall deposit all corporate moneys and other valuable effects in the name and to the credit of the corporation in a depository or depositories designated by the board of directors. The treasurer shall disburse the funds of the corporation and shall render to the president or the stockholders or the board of directors, whenever they may require it, an account of his or her transactions as treasurer and of the financial condition of the corporation. The treasurer also shall perform whatever duties and have whatever powers the board of directors shall from time to time prescribe.

ARTICLE VI

Share Certificates and the Transfer of. Shares

Section 1. Share Certificates . 'Each stockholder shall be entitled to a certificate or certificates, in a form approved by the board of directors, which shall represent and certify the number, kind and class of shares owned by him or her in the corporation. Each certificate shall be signed by the president or a vice president, and by the secretary or the treasurer.

Section 2. Record Date and Closing of Transfer Books. The board of directors may fix, in advance, a date as the record date for the purpose of determining stockholders entitled to notice of, or to vote at, any meeting of stockholders, or stockholders entitled to receive payment of any dividend or the allotment of any rights, or in order to make a determination of stockholders for any other proper purpose. Such date shall be not more than ninety (90) days, and in case of a meeting of stockholders not less than ten (10) days, prior to the date on which the particular action requiring such determination of stockholders is to be taken. The stock transfer books of the corporation may not be closed for a period longer than twenty (20) days.

If no record is fixed and the stock transfer books are not closed, the determination of stockholders entitled to notice of, or to vote at, a meeting of stockholders shall be at the later-of (i) the close of business on the day on which notice of the meeting is mailed or (ii) the thirtieth (30th) day before the meeting. If no record date is fixed, the record date for determining stockholders for any purpose other than that specified in the preceding sentence shall be at the close of business on the day on which the resolution of the directors relating thereto is adopted.

When a determination of stockholders of record entitled to notice of, or to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any future meeting in respect of an adjournment thereof, unless the directors fix a new record date under this section for such future meeting.

Section 3. Registered Stockholders . The corporation shall be entitled to treat the holder of record of shares as the holder in fact and, except as otherwise provided by the law of the State of Maryland, shall not be bound to recognize any equitable or other claim to or interest in the shares.

Shares of the corporation shall only be transferred on its books upon the surrender to the corporation of the share certificates duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, and upon presentation of adequate evidence of the validity of the transfer under this section and the laws of the State of Maryland. In that event, the surrendered certificates shall be canceled, new certificates issued to the person entitled to them and the transaction recorded on the books of the corporation.

Section 4. Lost Certificates . The board of directors may direct a new certificate to be issued in place of a certificate alleged to have been destroyed or lost if the owner makes an affidavit that it is destroyed or lost. The board, in its discretion, may as a condition precedent to issuing the new certificate, require the owner to give the corporation a bond as indemnity against any claim that may be made against the corporation-on the certificate allegedly destroyed or lost.

ARTICLE VII

General Provisions

Section 1. Execution of Written Instruments. Contracts, deeds, documents, and instruments shall be executed by the president and attested by the secretary, unless the board of directors shall, in a particular situation, designate another procedure for their execution.

Section 2. Signing of Checks and Notes . Checks, notes, drafts, and demands for money shall be signed by such person or persons as may be designated by the board of directors.

Section 3. Seal . The corporate seal, if any, shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Maryland." The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

Section 4. Fiscal Year . The fiscal year of the corporation shall be January 1 to December 31.

Section 5. Indemnification . The corporation shall indemnify, to the full extent permitted by applicable law, any present or former director, officer, agent or employee, or any person who may. be serving or have served at the request of the corporation as a director, officer, agent or employee of another corporation, partnership, joint venture, trust or other enterprise.

Section 6. Voting Shares Held in Other Corporations. In the absence of other arrangements by the board of directors, shares of stock issued by any other corporation and owned or controlled by this corporation may be voted at any stockholders' meeting of the other corporation by the president of this corporation or, if he or she is not present at the meeting, by any vice president of this corporation, and in the event neither the president nor any vice president is to be present at a meeting, the shares may be voted by such person as the president and secretary of the corporation shall by duly executed proxy designate to represent the corporation at the meeting.

ARTICLE VIII

Amendments

These bylaws may be repealed or amended, or a new code of bylaws adopted, only by the affirmative vote of holders of a majority of the total number of shares issued and outstanding or by the board of directors.

EXECUTION COPY

____________________________________________________________________________

THIRD AMENDED AND RESTATED

AGREEMENT OF

LIMITED PARTNERSHIP OF

POTOMAC LEASING ASSOCIATES, L.P.

between

POTOMAC NEVADA LEASING CORPORATION

and

POTOMAC NEVADA CORPORATION

DATED AS OF JANUARY 7, 1999

____________________________________________________________________________

	TABLE OF CONTENTS
Section		Page
ARTICLE I
	THE PARTNERSHIP	1
	SECTION 1.1. Formation	1
	SECTION 1.2. Name.	1
	SECTION 1.3. Purposes	1
	SECTION 1.4. Principal Place of Business	1
	SECTION 1.5. Term	1
	SECTION 1.6. Filings; Agent for Service of Process	2
	SECTION 1.7. Title to Property	2
	SECTION 1.8. Payments of Individual Obligations	2
	SECTION 1.9. Independent Activities; Transactions with Affiliates	2
	SECTION 1.10. Definitions	4
	SECTION 1.11. Powers	17
	SECTION 1.12. Other Terms	17
ARTICLE II		18
	PARTNERS AND CAPITAL	18
	SECTION 2.1. General Partner	18
	SECTION 2.2. Limited Partner
	SECTION 2.3. Additional Capital Contributions	18
	SECTION 2.4. Other Matters	18
	SECTION 2.5. Capital Accounts and Percentage Interests	20
ARTICLE III
	ALLOCATIONS	20
	SECTION 3.1. Profits	20
	SECTION 3.2. Losses	20
	SECTION 3.3. Special Allocations	21
	SECTION 3.4. Curative Allocations	23
	SECTION 3.5. Loss Limitation	23
	SECTION 3.6. Other Allocation Rules	23
	SECTION 3.7. Tax Allocations: Code Section 704(c)	24
ARTICLE IV
	DISTRIBUTIONS	25
	SECTION 4.1. Distributions of Net Cash Flow	25
	SECTION 4.2. Amounts Withheld	25
	SECTION 4.3. Distributions to the Limited Partner	25
ARTICLE V
	MANAGEMENT	25
	SECTION 5.1. Authority of the General Partner	25
	SECTION 5.2. Right to Rely on the General Partner	27
	SECTION 5.3. Restrictions on Authority of the General Partner	28
	SECTION 5.4. Fiduciary Duty of the General Partner	29
	SECTION 5.5. Indemnification of the Partners	29
	SECTION 5.6. Compensation and Expenses	30
	SECTION 5.7. Temporary Investments	30
ARTICLE VI
	ROLE OF LIMITED PARTNER	30
	SECTION 6.1. Rights or Powers	30
	SECTION 6.2. Voting Rights	31
	SECTION 6.3. Procedure for Consent	31
ARTICLE VII
	REPRESENTATIONS AND WARRANTIES	31
	SECTION 7.1. In General	31
	SECTION 7.2. Representations and Warranties	31
	SECTION 7.3. Damages Payments With Respect To Letter Agreements	34
	SECTION 7.4. Damage Payments	34
ARTICLE VIII
	ACCOUNTING, BOOKS AND RECORDS	34
	SECTION 8.1. Accounting, Books and Records	34
	SECTION 8.2. Reports	35
	SECTION 8.3. Tax Matters Partner; Tax Information	36
ARTICLE IX
	AMENDMENTS; MEETINGS	36
	SECTION 9.1. Amendments	36
	SECTION 9.2. Meetings of the Partners	37
	SECTION 9.3. Unanimous Consent	37
ARTICLE X
	TRANSFERS	37
	SECTION 10.1. Restriction on Transfers	37
	SECTION 10.2. Permitted Transfers	38
	SECTION 10.3. Conditions to Permitted Transfers	38
	SECTION 10.4. Prohibited Transfers	39
	SECTION 10.5. Rights of Unadmitted Assignees	39
	SECTION 10.6. Admission of Substituted Partners	40
	SECTION 10.7. Distributions and Allocations in Respect of Transferred Interests	40
	SECTION 10.8. Partial Retirement of Limited Partner's Interest. Determination of Appraised Values and Gross Asset Values	41
ARTICLE XI
	GENERAL PARTNER	43
	SECTION 11.1. Covenant Not to Withdraw, Transfer or Dissolve	43
	SECTION 11.2. Termination of Status as General Partner	43
	SECTION 11.3. Election of Additional General Partners	44
ARTICLE XII
	DISSOLUTION AND WINDING UP	44
	SECTION 12.1. Liquidating Events	44
	SECTION 12.2. Winding Up	46
	SECTION 12.3. Compliance With Certain Requirements of Regulations Deficit Capital Accounts	47
	SECTION 12.4. Deemed Contribution and Distribution	48
	SECTION 12.5. Rights of Partners	48
	SECTION 12.6. Notice of Dissolution	49
ARTICLE XIII
	POWER OF ATTORNEY	49
	SECTION 13.1. General Parmer as Attorney-In-Fact	49
	SECTION 13.2. Nature as Special Power	50
ARTICLE XIV
	MISCELLANEOUS	50
	SECTION 14.1. Notices	50
	SECTION 14.2. Binding Effect	51
	SECTION 14.3. Construction	51
	SECTION 14.4. Time	51
	SECTION 14.5. Headings	51
	SECTION 14.6. Severability	51
	SECTION 14.7. Incorporation by Reference	52
	SECTION 14.8. Further Action	52
	SECTION 14.9. Variation of Pronouns	52
	SECTION 14.10. Governing Law	52
	SECTION 14.11. Waiver of Action for Partition; No Bill For Partnership Accounting	52
	SECTION 14.12. Consent to Jurisdiction; Service of Process	52
	SECTION 14.13. Counterpart Execution	53
	SECTION 14.14. Sole and Absolute Discretion	53
	SECTION 14.15. Specific Performance	53
	SECTION 14.16. No Material Impairment	53
	SECTION 14.17. Duties and Liabilities of Partners	53
SCHEDULE A - LIST OF PHASE I AND PHASE II ASSETS

THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF POTOMAC LEASING ASSOCIATES, L.P.
This THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is entered into and shall be effective as of the 7th day of January, 1999, by and between POTOMAC NEVADA LEASING CORPORATION (" *Leasing* "), a Nevada corporation, as the General Partner, and POTOMAC NEVADA CORPORATION (" *Nevada* "), a Nevada corporation, as the Limited Partner, pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act.
ARTICLE I THE PARTNERSHIP
*SECTION 1.1. Formation* . The Partnership was formed on April 15, 1993. The Partners hereby agree to continue the Partnership as a limited partnership pursuant' to the provisions of the Act and upon the terms and conditions set forth in this Agreement. This Agreement completely amends and restates that certain Second Amended and Restated Agreement of Limited Partnership of Potomac Leasing Associates, L.P., entered into as of June 8, 1993, as amended to date.
*SECTION 1.2. Name* . The name of the Partnership shall continue to be Potomac Leasing Associates, L.P., and all business of the Partnership shall continue to be conducted in such name or, with the unanimous consent of the Partners, under any other name.
*SECTION 1.3. Purposes* . The purposes of the Partnership are to acquire, manage, protect, conserve and dispose of Permitted Assets and to make such additional investments' and engage in such additional business endeavors as are permitted under this Agreement or otherwise as the Partners may unanimously agree, and to engage in any and all activities related or incidental thereto.
*SECTION 1.4 Principal Place of Business* . The principal place of business of the Partnership shall continue to be at 1575 Delucchi Lane, Suite 115, Reno, Nevada 89502. The General Partner may change the principal place of business of the Partnership to any other place with the unanimous consent of the Partners.
*SECTION 1.5. Term.* The term of the Partnership commenced on the date the certificate of limited partnership of the Partnership (the " *Certificate* ") was filed in the office of the Secretary of State of the State of Delaware in accordance with the Act and shall continue until the earlier to occur of December 31, 2020, or the winding up and liquidation of the Partnership and the completion of its business following a Liquidating Event as provided in Article XII hereof.
*SECTION 1.6. Filings; Agent for Service of Process* . (a) The General Partner caused the Certificate to be filed in the office of the Secretary of State of the State of Delaware in accordance with the provisions of the Act. The General Partner shall take any and all actions reasonably necessary to perfect and maintain the status of the Partnership as a limited partnership under the laws of the State of Delaware or any other jurisdiction in which the. Partnership is engaged in business. The General Partner shall cause amendments to the Certificate to be filed whenever required by the Act.
(b) The registered agent for service of process on the Partnership in the State of Delaware shall continue to be Corporation Service Company, 1013 Centre Road, Wilmington, New Castle County, Delaware 19805 or any successor as appointed by the General Partner in accordance with the Act. The registered office of the Partnership in the State of Delaware is located at 1013 Centre Road, Wilmington, New Castle County, Delaware 19805.
(c) Upon the dissolution and completion of the winding up and liquidation of the Partnership, the General Partner (or, in the event there is no General Partner, any Person appointed pursuant to Section 12.2 hereof) shall promptly execute and cause to be filed appropriate certificates of cancellation in accordance with the Act and the laws of any other jurisdictions in which the General Partner or such other appointed Person, as the case may be, deems such filing necessary or advisable.
*SECTION 1.7. Title to Property* . All real and personal property owned by the Partnership or any Partnership Subsidiary shall be owned by the Partnership or such Partnership Subsidiary, as the case may be, as an entity and no Partner shall have any ownership interest in such property in its individual name or right. Each Partner's Interest shall be personal property for all purposes. Each of the Partnership and any Partnership Subsidiary shall hold all of its property in the name of the Partnership or such Partnership Subsidiary, as the case may be, and not in the name of any Partner.
*SECTION 1.8. Payments of Individual Obligations* . The Partnership's credit and assets shall be used solely for the benefit of the Partnership. No asset of the Partnership shall be transferred or encumbered for or in payment of any individual obligation of any Partner.
*SECTION 1.9. Independent Activities; Transactions with Affiliates.* (a) The General Partner shall be required to devote only such time to the affairs of the Partnership as the General Partner determines in its sole discretion may be necessary to manage and operate the Partnership. The General Partner shall be free to serve any other Person or' enterprise in any capacity that it may deem appropriate in its discretion.
(b) To the extent permitted by applicable law and except as otherwise provided in this Agreement, each Partner acknowledges that the other Partner (each acting on its own behalf) and its Affiliates are free to engage or invest in an unlimited number of activities or businesses, any one or more of which may be related to the activities or businesses of the Partnership, without having or incurring any obligation to offer any interest in such activities or businesses to the Partnership or any Partner. Neither this Agreement nor any activity undertaken pursuant to this Agreement shall prevent any Partner or its Affiliates from engaging in such activities or require any Partner to permit the Partnership or any Partner or its Affiliates to participate in any such activities. As a material part of the consideration for the execution of this Agreement by each Partner, each Partner hereby waives, relinquishes, and renounces any such right or claim of participation.
(c) To the extent permitted by applicable law and except as otherwise provided in this Agreement, the General Partner, when acting on behalf of the Partnership, is hereby authorized to purchase property from, sell property to, or otherwise deal with the Limited Partner, acting on its own behalf, or any Affiliate of the Limited Partner, provided that any such purchase, sale or other transaction shall be in the ordinary course of the Partnership's business and shall be made on such terms and conditions which are no less favorable to the Partnership than if the sale, purchase or other transaction had been entered into with an independent third party on prevailing market terms. The Partners hereby agree that PCI Loans and PCI Guaranteed Loans satisfy this independent third-party standard and the Partners hereby authorize the General Partner to cause the Partnership or any Partnership Subsidiary to enter into the documents referenced in this Section 1.9(c). Notwithstanding the foregoing, unless the Partners otherwise unanimously agree, any sale of Schedule A Assets by the Partnership to an Affiliate of any Partner must be consummated at a cash price of not less than the Appraised Value of such assets determined in accordance with the procedures set forth in Section 10.8(b)(i) hereof.
(d) The Limited Partner and any Affiliate thereof may also lend money to, borrow money from, act as a surety, guarantor or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, and transact other business with the Partnership and, subject to other applicable law, has the same rights and obligations with respect thereto as a Person who is not a Partner. The existence of these relationships and acting in such capacities will not result in the Limited Partner being deemed to be participating in the control of the business of the Partnership or otherwise affect the limited liability of the Limited Partner. If the Limited Partner or any Affiliate thereof is a lender, in exercising its rights as a lender, including making its decision on whether to foreclose on property of the Partnership, such lender will have no duty to consider (i) its sums as a Partner or an Affiliate of a Partner, (ii) the interests of the Partnership, or (iii) any duty it may have to a Partner or the Partnership.
*SECTION 1.10. Definitions* . Capitalized words and phrases used in this Agreement have the following meanings:
	" *Act* " means the Delaware Revised Uniform Limited Partnership Act, as set forth in the Del. Code Ann. Tit. 6, Section I7-10t to 17-1111, as amended from time to time (or any corresponding provisions of succeeding law).
	" *Additional Capital Contributions* " means, with respect to each Partner, the Capital Contributions made by such Partner pursuant to Section 2.3 hereof, reduced by the amount of any liabilities of such Partner assumed by the Partnership in connection with such Capital Contribution or which are secured by any property contributed by such Partner as a part of such Capital Contribution. In the event all or a portion of an Interest is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Additional Capital Contributions of the transferor to the extent they relate to the Transferred Interest.
	" *Additional Partnership Subsidiary* " means such other corporation(s) as shall be designated by the Partnership.
	" *Additional Partnership Subsidiary Stock* " has the meaning set forth in clause (iii) of the definition of "Permitted Assets."
	" *Adjusted Capital Account Deficit* " means, with respect to the Limited Partner, the deficit balance, if any, in the Limited Partner's Capital Account as of the end of the relevant Allocation Year, after giving effect to the following adjustments:
		(i) Credit to such Capital Account any amounts which the Limited Partner is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Regulations Section 1.704-1(b)(2)(ii)(C), 1.704-2(g)(1)or 1.704-2(i)(5); and
		(ii) Debit to such Capital Account the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5)' or 1.704-1(b)(2)(ii)(d)(6).
	The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
	" *Affiliate* " means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any Person owning or controlling 50% or more of the outstanding voting interests of such Person, (iii) any officer, director, partner or trustee of, or a Person serving in a similar capacity with respect to, such Person, or (iv) any Person who is an officer, director, general partner, trustee, or holder of 50 % or more of the voting interests of any Person described in clauses (i) through (iii) of this sentence. For purposes of this definition, the term "control," (including with correlative meanings, the terms "controlling," "controlled by" or "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
	" *Agreement* " or " *Partnership Agreement* " means this Third Amended and Restated Agreement of Limited Partnership, as amended, modified or supplemented from time to time.
	" *Allocation Year* " means (i) the period commencing on the Closing Date and ending on December 31, 1999, (ii) any subsequent period commencing on January 1 and ending on the following December 31 or (iii) any portion of any period described in clause (ii) for which the Partnership is required to allocate Profits, Losses and other items of Partnership income, gain, loss or deduction pursuant to Article III hereof.
	" *Appraised Value* " means, with respect to any asset being appraised, the fair market value price at which such asset would be sold by a willing and informed seller to a willing and informed unrelated buyer, neither being under any compulsion to sell or buy, taking into account all factors considered by the appraiser to affect the fair market value of the asset being appraised.
	" *Assignment and Assumption Agreements* " means, collectively, the Assignment and Assumption Agreement [1988 Z] and the. Assignment and Assumption Agreement [1988 AA], in each case by and between Potomac Nevada Corporation as Assignor and Potomac Leasing Associates, L.P. as Assignee relating to the contribution of the Phase I Assets to the Partnership.
	" *Bankruptcy* " means, with respect to any Person, a Voluntary Bankruptcy or an Involuntary Bankruptcy. A " *Voluntary Bankruptcy* " means, with respect to any Person, (a)(i) the inability of such Person generally to pay its debts as such debts become due, (ii) the failure of such Person generally to pay its debts as such debts become due, or (iii) an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors; (b) the filing of any petition or answer by such Person seeking to adjudicate it a bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property; or (c) corporate action taken by such Person to authorize any of the actions set forth above. An " *Involuntary Bankruptcy* " means, with respect to any Person, without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation, or the filing of any such petition against such Person which petition shall not be dismissed within ninety (90) days, or, without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person which order shall not be dismissed within ninety (90) days. It is the intent of the Partners that these definitions supersede those set forth in Section 17-402(d)(4) of the Act.
	" *Business Day* " means a day of the year on which banks are not required or authorized to close in New York City.
	" *Capital Account* " means, with respect to any Partner, the Capital Account maintained for such Partner in accordance with the following provisions:
		(i) To each Partner's Capital Account there shall be credited such Partner's Capital Contributions, such Partner's distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof, and the amount of any Partnership liabilities assumed by such Partner or which are secured by any Property distributed to such Partner.
		(ii) To each Partner's Capital Account there shall be debited the amount of cash and the Gross Asset Value of any Property distributed to such Partner pursuant to any provision of this Agreement, such Partner's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof, and the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the Partnership.
		(iii) In the event all or a portion of an Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest.
		(iv) In determining the amount of any liability for purposes of the definition of "Additional Capital Contribution" and subparagraphs (i) and (ii) of this definition, there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.
	The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Partnership or any Partner), are computed in order to comply with such Regulations, the General Partner, with the unanimous consent of the Partners, may make such modification. The General Partner also shall make, with the unanimous consent of the Partners, (i) any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of Partnership capital reflected on the Partnership's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b).
	" *Capital Contribution* " means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership with respect to the Interest held by such Partner.
	" *Certificate* " has the meaning set forth in Section 1.5 hereof.
	" *Closing Date* " means January 7 1999.
	" *Code* " means the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law).
	" *Continental* " means Continental Airlines, Inc.
	" *Damages Payment* " has the meaning set forth in Section 2.4(e) hereof.
	" *Debt* " of a Person means (i) any indebtedness for borrowed money or deferred purchase price of property or evidenced by a note, bonds, or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by such Person whether or not such Person has assumed or become liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement (the principal amount of such obligation shall be deemed to be the notional principal amount on which such swap is based), and (v) obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii) and (iv) above, provided that Debt shall not include obligations in respect of any accounts payable that are incurred in the ordinary course of such Person's business and are not delinquent or are being contested in good faith by appropriate proceedings.
	" *Depreciation* " means, for each Allocation Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Allocation Year for U.S. federal income tax purposes, except that if the Gross Asset Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.
	" *Expenses* " means any and all liabilities, obligations, losses, damages, penalties, claims (including, but not limited to negligence, strict or absolute liability, liability in tort and liabilities arising out of violation of laws or regulatory requirements of any kind), actions, suits, costs, expenses and disbursements (including reasonable legal fees and expenses).
	" *Federal Aviation Act* " means the Federal Aviation Act of 1958, as amended.
	" *Fiscal Quarter* " means (i) the period commencing on the Closing Date and ending on March 31, 1999, and (ii) any subsequent three-month period commencing on each of January 1, April 1, July 1 or October 1 and ending on the following of March 31, June 30, September 30 or December 31, as the case may be; provided that the last Fiscal Quarter shall end on the date on which all Partnership Property is distributed pursuant to Section 12.2 hereof and the Certificate has been canceled pursuant to the Act.
	" *Fiscal Year* " means (i) the period commencing on the Closing Date and ending on December 31, 1999, (ii) any subsequent twelve (12)-month period commencing on January 1 and ending on the earlier to occur of (A) the following December 31 or (B) the date on which all Partnership Property is distributed pursuant to Section 12.2 hereof and the Certificate has been canceled in accordance with the Act.
	" *FSBU* " means First Security Bank of Utah, National Association, as owner trustee (and in its individual capacity where expressly provided) under the Phase II Trust Agreements.
	" *GAAP* " means United States generally accepted accounting principles as in effect from time to time as applied to the Partnership.
	" *General Partner* " means any Person who (i) is referred to as such in the first paragraph of this Agreement or has become a General Partner pursuant to the terms of this Agreement, and (ii) has not, at any given time, ceased to be a General Partner pursuant to the terms of this Agreement.
	" *Gross Asset Value* " means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:
		(i) The initial Gross Asset Value of any asset contributed by a Partner to-the Partnership shall be the fair market value of such asset, as determined by the General Partner with the unanimous consent of the Partners;
		(ii) The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective Appraised Values, as determined in accordance with the appraisal procedures set forth in Section 10.8(b)(i) hereof, in connection with the following events: (A) the acquisition of an additional Interest by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Partnership to a Partner of more than a de minimis amount of Property as consideration for all or a portion of its Interest in the Partnership; and (C) the liquidation of the Partnership within the meaning of Regulations Section 1.704-1 (b)(2)(ii)(g); provided, however , that adjustments pursuant to clauses (A) and (B) above shall be made only if the General Partner reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;
		(iii) The Gross Asset Value of any Partnership asset distributed to any Partner shall be adjusted to equal the Appraised Value of such asset as determined in accordance with Section 10.8(b)(i) as of the date of such distribution; and
		(iv) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 732(d), 734(b) or 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of "Profits" and "Losses" and Section 3.3(g) hereof; provided, however , that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the Partners unanimously agree that an adjustment pursuant to subparagraph (ii) hereof is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).
	If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (i), (ii), or (iv) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.
	" *Interest* " means any interest in the Partnership representing the Capital Contributions made by a Partner or its predecessors in interest, including any and all benefits to which the holder of such an interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement.
	" *Involuntary Bankruptcy* " has the meaning set forth in the definition of "Bankruptcy.
	" *Issuance Items* " has the meaning set forth in Section 3.3(h) hereof.
	" *Lessee* " means United Air Lines, Inc. as Lessee under the Phase I Leases.
	" *Lessor Liens* " has the meaning set forth in Section 1 of each of the Phase I Leases.
	" *Lessor's Liens* " has the meaning set forth in Section 1 of each of the Phase II Leases.
	" *Letter Agreements* " means the two Letter Agreements, each dated as of June 8, 1993, from the Partnership addressed to Continental in connection with the Phase II Trust Agreements.
	" *Limited Partner* " means any Person (i) who is referred to as such in the first paragraph of this Agreement or who has become a Limited Partner pursuant to the terms of this Agreement, and (ii) who has not ceased to be a Limited Partner.
	" *Liquidating Event* " has the meaning set forth in Section-12.1 hereof.
	" *Loan* " means a loan that is made by the Partnership or a Partnership Subsidiary to, and at all times the obligor of which is, PCI or any Affiliate of PCI; provided that (i) each such Loan shall require interest-only payments at a rate equal to PCI's then current borrowing rate ( i. e. , the rate that would be charged to PCI in accordance with Section 1.9(c) hereof) for equivalent maturity securities, and (ii) principal for each such Loan shall be repaid at maturity.
	" *Net Cash Flow* " means the gross cash proceeds of the Partnership (including Capital Contributions of money) less the portion thereof used to pay, or to establish in the reasonable determination of the General Partner (considering projected cash receipts), a reasonable reserve for (a) Partnership expenses, (b) debt payments, (c) capital expenditures with respect to the Schedule A Assets 0i: other Permitted Assets and (d) with unanimous consent of the Partners, contingencies, all as determined by the General Partner. " *Net Cash Flow* " shall not be reduced by depreciation, amortization, cost recovery deductions or similar allowances, but shall be, without duplication, (i) decreased by distributions previously made pursuant to Section 4.1 hereof, (ii) decreased by the amount of any funds invested in Permitted Assets, (iii) decreased by damages or other indemnification payments to the Partnership that are required to be paid over by the Partnership to a Partner or an Affiliate 'thereof pursuant to Section 7.4 or 10.4 hereof, and (iv) increased by any reductions of reserves previously established pursuant to the first sentence of this definition.
	" *Nonrecourse Deductions* " has the meaning set forth in Regulations Section 1.704-2(b)(1).
	" *Nonrecourse Liability* " has the meaning set forth in Regulations Section 1.704-2(b)(3).
	" *Owner Participant* " has the meaning set forth in Section 1 of each of the Phase I Leases.
	" *Owner Trustee* " means Wilmington Trust Company as Owner Trustee under the Phase I Leases.
	" *Parent* " means (i) in the case of the General Partner, Potomac Nevada Corporation, and (ii) in the case of the Limited Partner, Potomac Capital Investment Corporation.
	" *Partner Nonrecourse Debt* " has the meaning set forth in Regulations Section 1.704-2(b)(4).
	" *Partner Nonrecourse Debt Minimum Gain* " means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).
	" *Partner Nonrecourse Deductions* " has the meaning set forth in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).
	" *Partners* " means the General Partner and all Limited Partners, where no distinction is required by the context in which the term is used herein. " *Partner* " means any one of the Partners.
	" *Partnership* " means the limited partnership continued pursuant to this Agreement and the limited partnership continuing the business of this Partnership in the event of dissolution as herein provided.
	" *Partnership Minimum Gain* " has the meaning set forth in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
	" *Partnership Subsidiary* " means either Partnership Subsidiary I or any Additional Partnership Subsidiary.
	" *Partnership Subsidiary Stock* " means either Partnership Subsidiary I Stock or any Additional Partnership Subsidiary Stock.
	" *Partnership Subsidiary I* " means such corporation as shall be designated by the Partnership.
	" *Partnership Subsidiary I Stock* " has the meaning set forth in clause (ii) of the definition of "Permitted Assets.
	" *PCI* " means Potomac Capital Investment Corporation, a Delaware corporation.
	" *PCI Guaranteed Loan* " means a Loan made by the partnership or a Partnership Subsidiary to an Affiliate of PCI, in each case guaranteed by PCI.
	" *PCI Loan* " means a Loan made by the Partnership or a Partnership Subsidiary to PCI.
	" *Percentage Interest* " means, with respect to any Partner, the ratio (expressed as a percentage) of the balance in such Partner's Capital Account to the aggregate balances in the Capital Accounts of all Partners. The Percentage Interest as of the Closing Date with respect to each Partner is the percentage set forth opposite such Partner's name in Section 2.5 hereof. In the event all or any portion of an Interest is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to a corresponding portion of the Percentage Interest of the transferor.
	" *Permitted Assets* " means:
		(i) The Phase I Assets and the Phase II Assets listed on Schedule A hereto (collectively, the " *Schedule A Assets* ") contributed to the Partnership by Nevada;
		(ii) Up to one hundred percent (100%) of the issued and outstanding capital stock of Partnership Subsidiary I (" *Partnership Subsidiary I Stock* ");
		(iii) Up to one hundred percent (100%) of the issued and outstanding capital stock of any Additional Partnership Subsidiary (" *Additional Partnership Subsidiary Stock* ");
		(iv) PCI Loans and PCI Guaranteed Loans;
		(v) U.S. government or U.S. government agency securities, or other corporate debt instruments that, in either case, are rated at least investment grade by either Standard & Poor's Corporation or by Moody's Investors Service, Inc.;
		(vi) Any temporary investment permitted by Section 5.7 hereof;
		(vii) Any of the following items of personal property which, at the time acquired by the Partnership, are subject to leases that are substantially similar to the leases on the Schedule A Assets:
			(x) Rail cars, airplanes, airplane engines, and similar transportation equipment;
			(y) Computer, data processing-and communications equipment; and
			(z) Vehicles, including automobiles, forklift trucks, cranes and similar heavy equipment; and
		(viii) Any other assets as may be agreed to by all of the Partners. "Permitted Transfer" has the meaning set forth in Section 10.2 hereof.
	" *Person* " means any individual, partnership (whether general or limited and whether domestic or foreign), limited liability company, corporation, trust, estate, association, custodian, nominee or other entity.
	" *Phase I Assets* " means the assets held through the Owner Participant interests contributed to the Partnership by Nevada pursuant to the Phase I Contribution Agreement.
	" *Phase I Contribution Agreement* " means that certain Contribution Agreement, dated as of April 18, 1993, between the Partnership and Nevada.
	" *Phase I Guarantees* " means the Guaranty of Obligations [1988F] and the Guaranty of Obligations [1988AA], each by Nevada in favor of the Lessee and the Owner Trustee, dated as of April 15, 1993.
	" *Phase I Leases* " means, collectively, the Lease Agreement (1988 Z) and the Lease Agreement (1988AA), each dated as of October 1, 1988, between Wilmington Trust Company as Owner-Trustee and United Air Lines, Inc. as Lessee, and each as supplemented by the Lease Supplement No. I dated November 14, 1988.
	" *Phase I Trust Agreements* " means, collectively, Trust Agreement (1988Z)and Trust Agreement (1988AA), each dated as of October 1, 1988, between PCI as Owner Participant and Wilmington Trust Company as Owner Trustee, and each as supplemented by the Trust Agreement Supplement (1988Z) or the Trust Agreement Supplement (1988AA), as the case may be, each dated November 14, 1988.
	" *Phase II Assets* " means the assets transferred to FSBU and deemed contributed to the Partnership by Nevada, in accordance with the Phase II Contribution Agreement.
	" *Phase II Contribution Agreement* " means that certain Contribution Agreement dated as of June 8, 1993 between the Partnership and Nevada.
	" *Phase II Guarantees* " means the' Guaranty of Obligations [N71828] and the Guaranty of Obligations [N14831] dated as of June 8, 1993, each by Nevada in favor of Continental.
	" *Phase II Leases"* means, collectively, the First Amended and Restated Lease Agreement No. 1 and the First Amended and Restated Lease Agreement No. 2, each dated as of June 8, 1993 between FSBU and Continental, as amended.
	" *Phase II Trust Agreements* " means the Trust Agreement [N71828] and the Trust Agreement [N148311], each dated as of June 8, 1993 between the Partnership and FSBU, as amended.
	" *Profits* " and " *Losses* " means, for each Allocation Year, an amount equal to the Partnership's taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
		(i) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;
		(ii) Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-l(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted from such taxable income or loss;
		(iii) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of "Gross Asset Value," the amount of such adjustment, if positive, shall be taken into account as gain or, if negative, shall be taken into account as loss, from the disposition of such asset for purposes of computing Profits or Losses;
		(iv) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Gross Asset Value;
		(v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Year, computed in accordance with the definition of "Depreciation;"
		(vi) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner's Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses; and
		(vii) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof shall not be taken into account in computing Profits or Losses.
	The amounts of the items of Partnership income, gain, loss or deduction available to be specially allocated pursuant to Sections 3.3 and 3.4 hereof shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.
	" *Property* " means all real and personal property (including cash) acquired or held by the Partnership and any improvements thereto and shall include both tangible and intangible property.
	" *Reconstitution Period* " has the meaning set forth in Section 12.1 hereof.
	" *Regulations* " means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
	" *Regulatory Allocations* " has the meaning set forth in Section 3.4 hereof.
	" *Retirement Date* " has the meaning set forth in Section 10.8(a) hereof.
	" *Retirement Notice* " has the meaning set forth in Section 10.8(a) hereof.
	" *Schedule A Assets* " has the meaning set forth in clause (i) of the definition of "Permitted Assets."
	" *Tax Indemnity Agreements* " means the Tax Indemnity Agreements, each dated as of June 8, 1993, among FSBU, the Partnership, Nevada, Leasing, PLA-BT Nevada, Inc., and Continental, relating to the Phase II Assets.
	" *Tax Matters Partner* " has the meaning set forth in Section 8.3(a) hereof.
	" *Transfer* " means, with respect to all or any portion of an Interest, as a noun, any voluntary or involuntary transfer, sale, or other disposition and, as a verb, voluntarily or involuntarily, to transfer, sell, or otherwise dispose of.
	" *Trust Agreements* " means the Phase I Trust Agreements and the Phase II Trust Agreements.
	" *Voluntary Bankruptcy* " has the meaning set forth in the definition of "Bankruptcy."
	" *Wholly Owned Affiliate* " of any Person means an Affiliate of such Person (i) 100% of the voting stock or beneficial ownership of which is owned directly by such Person, or by any Person who, directly or indirectly, owns 100% of the voting stock or beneficial ownership of such Person, (ii) an Affiliate of such Person who, directly or indirectly, owns 100 % of the voting stock or beneficial ownership of such Person, and (iii) any Wholly Owned Affiliate of any Affiliate described in clauses (i) or (ii) of this definition.
*SECTION 1.11. Powers.* The Partnership shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or in furtherance of the purposes of the Partnership set forth in Section 1.3 hereof and for the protection and benefit of the Partnership and shall have, without limitation, any and all powers that may be exercised on behalf of the Partnership by the General Partner pursuant to Article V hereof.
*SECTION 1.12. Other Terms* . Unless the content shall require otherwise:
(a) Words importing the singular number or plural number shall include the plural number and singular number respectively;
(b) Words importing the masculine gender shall include the feminine and neuter genders and vice versa;
(c) Reference to "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation;"
(d) Reference in this Agreement to "herein," "hereby," "hereof" or "hereunder", or any similar formulation, shall be deemed to refer to this Agreement as a whole, including the Exhibits, unless the context otherwise requires;
(e) References in this Agreement to "Section" or "Sections" are to a section or sections of this Agreement unless otherwise specified; and
(f) Reference to "and" and "or" shall be deemed to mean "and/or."
ARTICLE II PARTNERS AND CAPITAL
SECTION 2.1. General Partner. The name and address of the General Partner are as follows:
		Potomac Nevada Leasing Corporation 1517 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator Fax: (702) 786-9532
*SECTION 2.2. Limited Partner* . The name and address of the Limited Partner are as follows:
		Potomac Nevada Corporation 1517 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator Fax: (702) 786-9532
*SECTION 2.3. Additional Capital Contributions* . (a) In General. Each Partner may contribute from time to time such additional cash or other property as it may determine or as may be required under Section 4.3 or 12.3(a)(ii) hereof; provided that any Capital Contribution of property made by such Partner pursuant to this Section 2.3(a) shall consist of Permitted Assets.
(b) In the event that Nevada is required to make any payment under the Phase I Guarantees or the Phase II Guarantees, including without limitation any payment attributable to the obligations described in Section 15.3 of the Phase II Leases, such payment shall be treated as a capital contribution by Nevada to the Partnership for all purposes of this Agreement and Nevada shall contribute to the Partnership all subrogation rights arising as a result of such payment.
*SECTION 2.4. Other Matters* . (a) Except as otherwise provided in Section 10.8 or Article XII hereof, no Partner shall demand or receive a return of its Capital Contributions or withdraw from the Partnership without the consent of the other Partner. Under circumstances requiring a return of any Capital Contributions, no Partner shall have the right to receive property other than cash except as may be specifically provided in this Agreement.
(b) No Partner shall receive any interest or draw with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Partnership or otherwise in its capacity as a Partner, except as otherwise provided in this Agreement.
(c) The Limited Partner shall not be liable for the debts, liabilities, contracts or any other obligations of the Partnership. Except (i) as otherwise provided by this Agreement or mandatory provisions of applicable state law or (ii) as otherwise required because the Partnership made a distribution to the Limited Partner in violation of the Act at a time when the Limited Partner knew the distribution would violate the Act, the Limited Partner shall not be required to lend or contribute any funds to the Partnership.
(d) The General Partner shall not have any personal liability for the repayment of any Capital Contributions of the Limited Partner.
(e) Notwithstanding anything to the contrary herein, amounts paid or received by a Partner or an Affiliate of a Partner as damages or indemnification with respect to any breach or other violation of any representation, warranty, covenant or other agreement made pursuant to Article VII or Section 10.4 hereof (such amounts being referred to in this Section 2.4(e) as a " *Damages Payment* ") shall be treated for income tax purposes as a contribution to, or a distribution from the Partnership to, as the case may be, such Partner; provided however , that a Damages Payment (i) shall not be treated as a Capital Contribution, (ii) shall not cause an adjustment to or otherwise affect the Capital Account of any Partner, (iii) shall not be taken into account in computing Profits or Losses, (iv) shall be deemed to be a contribution obligation under the Act and (v) in the case of a Damages Payment to a Partner or an Affiliate of a Partner, shall not be treated as a distribution of Net Cash Flow; provided further , however, that (x) to the extent a Damages Payment required to be paid by a Partner or an Affiliate of a Partner is with respect to a payment by the Partnership of an item that is deductible for income tax purposes or results in an increase in the basis of any Partnership asset that is depreciable, amortizable, or subject to cost recovery, any such deduction or cost recovery allowance shall not be taken into account in computing Profits or Losses or other items of loss or deduction allocable pursuant to Article III hereof, but shall be specially allocated to such Partner for income tax purposes, (y) to the extent any Damages Payment required to be paid to a Partner or an Affiliate of a Partner is with respect to the receipt by the Partnership of an item that constitutes income for income tax purposes, such income shall not be taken into account in computing Profits or Losses or other items of income or gain allocable pursuant to Article III hereof, but shall be specially allocated to such Partner for income tax purposes, and (z) any special allocations pursuant to clauses (x) or (y) of this Section 2.4(e) shall not affect the Capital Account of any Partner.
*SECTION 2.5. Capital Accounts and Percentage Interests* . The Capital Account and Percentage Interest of each Partner as of the Closing Date, which give effect to all Capital Contributions, transfers of Interests and adjustments to Capital Accounts made prior to and including the Closing Date, are as follows:

	Closing Date Capital Account	Percentage Interest
GENERAL PARTNER: Potomac Nevada Leasing Corporation	$ 2,341,587	1.10%
LIMITED PARTNER: Potomac Nevada Corporation	$210,027.733	98.90 %
TOTAL	$ 212,369,320	100.00 %

ARTICLE III ALLOCATIONS
*SECTION 3.1. Profits.* After giving effect to the special allocations set forth in Sections 3.3 and 3.4 hereof, Profits for any Allocation Year shall be allocated in the following order and priority:
(a) First , 100% to the General Partner in an amount equal to the remainder, if any, of (i) the cumulative Losses allocated to the General Partner pursuant to Section 3.2(c) hereof for all prior Allocation Years, minus (ii) the cumulative Profits allocated to the General Partner pursuant to this Section 3.1(a) for all prior Allocation Years;
(b) Second , to the Partners in proportion: to and to the extent of an amount equal to the remainder, if any, of (i) the cumulative Losses allocated to each Partner pursuant to Section 3.2 (b) hereof for all prior Allocation Years, minus (ii) the cumulative Profits allocated to such Partner pursuant to this Section 3.1(b) hereof for all prior Allocation Years; and
(c) Third , the balance, if any, to the Partners in proportion to their Percentage Interests.
*SECTION 3.2.* Losses. After giving effect to the special allocations set forth in -Sections 3.3 and 3.4 hereof, Losses for any Allocation Year shall be allocated in the following order and priority, subject to the limitations in Section 3.5 hereof:
(a) First , to the Partners in proportion to and to the extent of the remainder, if any, of (i) the cumulative Profits allocated to each Partner pursuant to Section 3.1 (c) hereof for all prior Allocation Years, minus (ii) the cumulative Losses allocated to such Partner pursuant to this Section 3.2(a) hereof for all prior Allocation Years;
(b) Second , to the Partners in proportion to their Percentage Interests until the Capital Account of the Limited Partner is equal to zero; and
(c) Third , the balance, if any, 100% to the General Partner.
*SECTION 3.3. Special Allocations* . The following special allocations shall be made in the following order:
(a) *Minimum Gain Chargeback.* Except as otherwise provided in Regulations Section 1.704-2(0, notwithstanding any other provision of this Article III, if there is a net decrease in Partnership Minimum Gain during any Allocation Year, each Partner shall be specially allocated items of Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 3.3(a) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) *Partner Minimum Gain Chargeback.* Except as otherwise provided in Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article III, if there is a net decrease in Partner Non-recourse Debt Minimum Gain attributable to a Partner Non-recourse Debt during any Allocation Year, each Partner who has a share of the Partner Non-recourse Debt Minimum Gain attributable to such Partner Non-recourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Partner's share of the net decrease in Partner Non-recourse Debt Minimum 'Gain attributable to such Partner Non-recourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 3.3(b) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) *Qualified Income Offset.* In the event the Limited Partner unexpectedly receives any adjustments, allocations or distributions described in Regulations Sections 1.704-l(b)(2)(ii)( d )( 4 ), 1.704-1(b)(2)(ii)( d )(5) or 1.704-1(b)(2)(ii)( d )(6), items of Partnership income and gain shall be specially allocated to the Limited Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Limited Partner as quickly as possible; provided that an allocation pursuant to this Section 3.3(c) shall be made only if and to the extent that the Limited Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article III have been tentatively made as if this Section 3.3(c) were not in the Agreement.
(d) *Gross Income Allocation* . In the event the Limited Partner has a deficit Capital Account at the end of any Allocation Year which is in excess of the sum of (i) the amount the Limited Partner is obligated to restore pursuant to any provision of this Agreement, and (ii) the amount the Limited Partner is deemed to be obligated to restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, the Limited Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible; provided that an allocation pursuant to this Section 3.3(d) shall be made only if and to .the extent that the Limited Partner would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article III have been made as if Section 3.3(c) hereof and this Section 3.3(d) were not in the Agreement.
(e) *Non-recourse Deductions.* Non-recourse Deductions for any Allocation Year shall be specially allocated to the Limited Partner and to the General Partner in proportion to their Percentage Interests.
(f) *Partner Non-recourse Deductions.* Any Partner Non-recourse Deductions for any Allocation Year shall be specially allocated to the Partner who bears the economic risk of loss with respect to the Partner Non-recourse Debt to which such Partner Non-recourse Deductions are attributable in accordance with Regulations Section 1.704-2(1)(1).
(g) *Section 754 Adjustments* . To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as the result of a distribution to a Partner in complete liquidation of its Interest, the amount of such, adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Partners in accordance with their interests in the Partnership in the event Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to whom such distribution was made in the event Regulations Section 1.704-l(b)(2)(iv)(m)(4) applies.
(h) *Allocations Relating to Taxable Issuance of Partnership Interests* . Any income, gain, loss or deduction realized as a direct or indirect result of the issuance of an Interest by the Partnership to a Partner (the " *Issuance Items* ") shall be allocated among the Partners so that, to the extent possible, the net amount of such Issuance Items, together with all other allocations under this Agreement to each Partner, shall be equal to the net amount that would have been allocated to each such Partner if the Issuance Items had not been realized.
*SECTION 3.4. Curative Allocations.* The allocations set forth in Sections 3.3(a), 3.3(b), 3.3(c), 3.3(d), 3.3(e), 3.3(f), 3.3(g) and 3.5 hereof (the " *Regulatory Allocations* ") are intended to comply with certain requirements of the Regulations. It is the intent of the Partners that, to the extent possible, all Regulatory Allocations shall be Offset either with other Regulatory Allocations or with special allocations of other items of Partnership income, gain, loss or deduction pursuant to this Section 3.4. Therefore, notwithstanding any other provision of this Article III (other than the Regulatory Allocations and the following sentence), the General Partner shall make such offsetting special allocations of Partnership income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Partner's Capital Account balance-is, to the extent possible, equal to the Capital Account balance such Partner would have had if the Regulatory Allocations were not part of the Agreement and all Partnership items were allocated pursuant to Sections 3.1, 3.2, 3.3(h) and 3.6 hereof. Notwithstanding the previous sentence, the General Partner shall not make special allocations of income or gain under this Section 3.4 to offset Regulatory Allocations previously made under Sections 3.3(e) and 3.3(f) hereof.
*SECTION 3.5. Loss Limitation* . The Losses allocated pursuant to Section 3.2 hereof and the items of loss or deduction allocated pursuant to Sections 3.3 and 3.4 hereof shall not exceed the maximum amount of Losses and items of loss or deduction that can be so allocated without causing the Limited Partner to have an Adjusted Capital Account Deficit at the end of any Allocation Year. All Losses and items of loss or deduction in excess of the limitation set forth in this Section 3.5 shall be allocated to the General Partner.
*SECTION 3.6. Other Allocation Rules* . (a) Profits, Losses and any other items of income, gain, loss or deduction shall be allocated to the Partners pursuant to this Article III as of the last day of each. Allocation Year; provided that Profits, Losses and such other items shall also be allocated at such times as are required by Section 10.8(b) hereof and at such other times as the Gross Asset Values of Partnership Property are adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value."
(b) In any cases in which it is necessary to determine the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the General Partner using any permissible method under Code Section 706 and the Regulations thereunder.
(c) The Partners are aware of the income tax consequences of the allocations made by this Article III and hereby agree to be bound by the provisions of this Article III in reporting their shares of Partnership income and loss for income, tax purposes, except to the extent otherwise required by law.
(d) Solely for purposes of determining a Partner's proportionate share of the "excess non-recourse liabilities" of the Partnership within the meaning of Regulations Section 1.752-3(a)(3), the Partners' interests in Partnership profits are as follows: 1% to the General Partner and 99 % to the Limited Partner.
(e) To the extent permitted by Regulations Section 1.704-2(h)(3), the General Partner shall endeavor to treat distributions of Net Cash Flow as having been made from the proceeds of a Non-recourse Liability or a Partner Non-recourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for the Limited Partner.
*SECTION 3.7. Tax Allocations: Code Section 704(c)* . (a) In accordance with Code Section 704(c) and the applicable Regulations thereunder in effect on the date of the contribution of any assets to which Code Section 704(c) relates, income, gain, loss, and deduction with respect to any property contributed to the capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of "Gross Asset Value").
(b) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the applicable Regulations thereunder in effect on the date of such adjustment.
(c) Any elections or other decisions relating to such allocations shall be made by the General Partner in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 3.7 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.
(d) Except as otherwise provided in this Agreement, all items of Partnership income, gain, loss, deduction, and any other allocations not otherwise provided for shall be divided among the Partners in the same proportions as they share Profits or Losses, as the case may be', for the Allocation Year.
ARTICLE IV DISTRIBUTIONS
*SECTION 4.1. Distributions of Net Cash Flow.* Except as otherwise provided in Section 4.2, Section 10.8 and Article XII hereof, distributions of Net Cash Flow shall be made at such times and in such amounts as shall be determined by the General Partner.
*SECTION 4.2. Amounts Withheld* . All amounts withheld or required to be withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any payment, distribution or allocation to the Partnership or the Partners and treated by the Code (whether or not withheld pursuant to the Code) or any such tax law as amounts payable by or in respect of the Partners or any Person owning an interest, directly or indirectly, in such Partner shall be treated as amounts paid or distributed to the Partners with respect to which such amount was withheld pursuant to this Article IV for all purposes under this Agreement. The General Partner is authorized to withhold from distributions, or with respect to allocations, to the Partners and to pay over to any federal, state, local or foreign government any amounts required to be so withheld pursuant to the Code or any provisions of any other federal, state, local or foreign law, and shall allocate any such amounts to the Partners with respect to which such amount was withheld.
*SECTION 4.3. Distributions to the Limited Partner* . It is the intent of the parties hereto that no distribution or payment to the Limited Partner (including distributions under Sections 4.1, 10.8 and 12.2 hereof) shall be deemed a return of money or other property in violation of the Act. The payment or distribution of any such money or property to the Limited Partner shall be deemed to be a compromise within the meaning of Section 17-502(b) of the Act, and the Limited Partner receiving any such money or property shall not be required to return any such money or property to the Partnership, any creditor of the Partnership or any other Person. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, the Limited Partner is obligated to return such money or property, such obligation shall be the obligation of the Limited Partner and not of the General Partner. Any amounts required to be paid under such obligation shall be treated as an "Additional Capital Contribution pursuant to Section 2.3(a) hereof.
ARTICLE V MANAGEMENT
*SECTION 5.1. Authority of the General Partner* . The General Partner shall take all actions which may be necessary or appropriate (i) for the continuation of the Partnership's valid existence as a limited partnership under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Limited Partner or to enable the Partnership to conduct the business in which it is engaged and (ii) for the accomplishment of the Partnership's purposes, including the acquisition, development, maintenance, preservation, and operation of Property in accordance with the provisions of this Agreement and applicable laws and regulations.
Subject to the limitations and restrictions set forth in this Agreement including, without limitation, those set forth in this Article V, the General Partner shall manage and control the business of the Partnership by conducting, in the name of, and on behalf of, the Partnership, the day-to-day business and affairs of the Partnership, and in so doing may exercise in the name of, and on behalf of, the Partnership the following specific rights and powers without any further consent of the Partners being required:
	(a) Acquire by purchase, lease, or otherwise any personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Partnership;
	(b) Operate, maintain, finance, improve, own, grant options, with respect to, sell, convey, assign, mortgage, and lease any personal property necessary or appropriate to the accomplishment of the purposes of the Partnership;
	(c) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the formation, management, maintenance, and operation of Property, or in connection with managing the affairs of the Partnership;
	(d) Borrow money and issue evidences of indebtedness necessary or appropriate for the accomplishment of the purposes of the Partnership and secure the same by mortgage, pledge, or other lien on any Property;
	(e) Execute, in furtherance of any or all of the purposes of the Partnership, any deed, lease, mortgage, deed of trust, mortgage note, promissory note, bill of sale, contract, or other instrument purporting to convey or encumber any or all of the Property;
	(f) Care for and distribute funds to the Partners by way of cash, income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Partnership or this Agreement;
	(g) Contract on behalf of the Partnership for the employment and services of employees and/or independent contractors, such as lawyers and accountants, and delegate (subject to the control and supervision of the General Partner) to such Persons the duty to manage or supervise any of the assets or operations of the Partnership;
	(h) Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Property and General Partner liability) necessary or appropriate for the accomplishment of the purposes of the Partnership, as may be lawfully carried on or performed by a partnership under the laws of each jurisdiction in which the Partnership was formed or is then qualified;
	(i) Invest Partnership funds in Permitted Assets; and
	(j) Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Partnership or the Partners in connection with activities arising out of, connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith.
*SECTION 5.2. Right to Rely on the General Partner.* (a) Any Person dealing with the Partnership may rely (without duty of further inquiry) upon a certificate signed by the General Partner as to:
	(i) The identity of any General Partner or the Limited Partner;
	(ii) The existence or nonexistence of any fact or facts which constitute a condition precedent to acts by the General Partner or which are in any other manner germane to the affairs of the Partnership;
	(iii) The Persons who are authorized to execute and deliver any instrument or document of the Partnership; or
	(iv). Any act or failure to act by the Partnership or any other matter whatsoever involving the Partnership or any Partner.
(b) The signature of the General Partner shall be necessary and sufficient to convey title to any property owned by the Partnership or to execute any promissory notes, trust deeds, mortgages, or other instruments of hypothecation, and all of the Partners agree that a copy of this Agreement may be shown to the appropriate parties in order to confirm the same, and further agree that the signature of the General Partner shall be sufficient to execute any "statement of partnership" or other documents necessary to effectuate this or any other provision of this Agreement. All of the Partners do hereby appoint the General Partner as their attorney-in-fact for the execution of any or all of the documents described in this Section 5.2(b)
*SECTION 5.3. Restrictions on Authority of the General Partner* . The General Partner shall not have the authority to, and covenants and agrees that it shall not, do any of the following acts without the unanimous consent of the Partners:
	(a) Cause or permit the Partnership to engage in (i) any activity that is not consistent with the purposes of the Partnership as set forth in Section 1.3 hereof or (ii) any merger or consolidation of the Partnership;
	(b) Knowingly do any act in contravention of this Agreement;
	(c) Knowingly do any act which would make it impossible to carry on the ordinary business of the Partnership, except as otherwise provided in this Agreement;
	(d) Confess a judgment against the Partnership in an amount in excess of Interests.
	(e) Possess Property, or assign rights in specific Property, for other than a Partnership purpose;
	(f) Knowingly perform any act that would subject the Limited Partner to liability as a general partner in any jurisdiction;
	(g) Cause or permit the Partnership or any Partnership Subsidiary to voluntarily take any action with respect to the Partnership or such Partnership Subsidiary described in clauses (a)(iii), (b) or (c) of the definition of "Bankruptcy," that would cause a Bankruptcy of the Partnership or any Partnership Subsidiary;
	(h) Cause a significant change in the nature of the Partnership's business or make any amendment, consent, waiver, or other modification with respect to a Permitted Asset;
	(i) Cause the Partnership to admit any additional Partners or issue any additional Partnership Interests other than pursuant to Section 10.6 hereof or to effect any redemption or retirement of any part of an Interest (other than a redemption or retirement pursuant to Section 10.8(b) hereof);
	(j) Cause the Partnership to prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the Property and in connection therewith execute any extensions or renewals of encumbrances on any or all of the Property; or
	(k) Cause the Partnership or any Partnership Subsidiary to acquire, by purchase, lease or contribution, any assets other than Permitted Assets or any Permitted Asset that is in default at the time of its acquisition by the Partnership or such Partnership Subsidiary.
*SECTION 5.4. Fiduciary Duty of the General Partner* . Subject to Section 1.9(b) hereof, the General Partner, in its capacity as General Partner, shall be under a fiduciary duty to conduct the affairs of the Partnership in the best interests of the Partnership and of the Partners, including the safekeeping and use of all of the Property and the use thereof for the exclusive benefit of the Partnership.
*SECTION 5.5. Indemnification of the Partners* . (a) To the maximum extent permitted by applicable law, the Partnership, its receiver or its trustee (in the case of its receiver or trustee, to the extent of Partnership Property) shall indemnify, save harmless, and pay all Expenses of the General Partner or any officers or directors of the General Partner relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the General Partner, officer or director in connection with the business of the Partnership, including attorneys fees incurred by the General Partner, officer or director in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, including all such liabilities under federal and state securities laws (including the Securities Act of 1933, as amended) as permitted by law.
(b) In the event of any action by a Partner against the General Partner, including a Partnership derivative suit, the Partnership shall indemnify, save harmless, and pay all Expenses of the General Partner incurred in the defense of such action, if the General Partner obtains a favorable final nonappealable judgment in such action.
(c) The Partnership shall indemnify, save harmless, and pay all Expenses of the General Partner if it, for the benefit of the Partnership, makes any deposit; acquires any option, or makes any other similar payment or assumes any obligation in connection with any property proposed to be acquired by the Partnership and suffers any financial loss as the result of such action.
(d) Notwithstanding anything to the contrary in any of Sections 5.5(a), 5.5(b) and 5.5(c) hereof, no Partner shall be indemnified from any liability for fraud, bad faith, willful misconduct, negligence or failure to perform in accordance with this Agreement.
(e) Notwithstanding anything to the contrary in any of Sections 5.5(a), 5.5(b) and 5.5(c) hereof, in the event that any provision in any of such Sections is determined to be invalid in whole or in part, such Section shall be enforced to the maximum extent permitted by law.
(f) Notwithstanding anything to the contrary in this Agreement, in no event will any indemnification set forth in this Section 5.5 subject the Limited Partner to personal liability.
*SECTION 5.6. Compensation and Expenses* . (a) *Compensation and Reimbursement* . Except as otherwise provided in this Section 5.6 or Section 5.5(c) hereof, no Partner shall receive any salary, fee or draw for services rendered to or on behalf of the Partnership or any Partnership Subsidiary or otherwise in its capacity as a Partner, nor shall any Partner be reimbursed for any expenses incurred by such Partner on behalf of the Partnership or any Partnership Subsidiary or otherwise in its capacity as a Partner.
(b) *Expenses* . The General Partner may charge the Partnership, and shall be reimbursed, for other reasonable direct out-of-pocket expenditures that are necessary or appropriate for the conduct of the Partnership's business.
(c) *Partnership Subsidiary.* The General Partner is authorized to cause or permit a Partnership Subsidiary to pay Affiliates of the General Partner reasonable fees for services rendered to or on behalf of such Partnership Subsidiary and to reimburse reasonable direct out-of-pocket expenditures that are necessary or appropriate for the conduct of such Partnership Subsidiary's business.
*SECTION 5.7. Temporary Investments.* All cash held by the Partnership not otherwise invested in a Permitted Asset shall be deposited for the benefit of the Partnership in one or more accounts of the Partnership maintained in such financial institutions as the General Partner shall determine or shall be invested in short-term liquid securities or other cash-equivalent obligations of such financial institutions or of the United States government (or institutions whose obligations are guaranteed as to payment by the United States government, and withdrawals shall be made only in the regular course of Partnership business on such signature or signatures as the General Partner may determine from time to time. Such financial institutions must have outstanding unsecured indebtedness that is rated AA or better by Standard & Poor's Corporation or Aa2 or better by Moody's Investors Service, Inc. (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating unsecured bank indebtedness).
ARTICLE VI ROLE OF LIMITED PARTNER
*SECTION 6.1. Rights or Powers* . The Limited Partner shall not have any right or power to take part in the management or control of the Partnership or its business and affairs or to act for or bind the Partnership in any way. Notwithstanding the foregoing, the Limited Partner shall have all the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act. The Limited Partner, any Affiliate thereof-or an employee, stockholder, agent, director or officer of the Limited Partner or any Affiliate thereof, may also be an employee or agent of the Partnership or an employee, agent, stockholder, director or officer of a General Partner. The existence of these relationships and acting in such capacities will not result in the Limited Partner being deemed to be participating in the control of the business of the Partnership or otherwise affect the limited liability of the Limited Partner.
*SECTION 6.2. Voting Rights* . The Limited Partner shall have the right to vote only on the matters specifically reserved for their vote or approval which are set forth in this Agreement and as required by the Act.
*SECTION 6.3. Procedure for Consent* . In any circumstances requiring the agreement, approval or consent of the Limited Partner specified in this Agreement, such agreement, approval or consent may, except where a standard for such agreement, approval or consent is provided for expressly in this Agreement, be given or withheld in the sole and absolute discretion of the Limited Partner. If the General Partner receives the necessary agreement, approval or consent of the Limited Partner to such action, the General Partner shall be authorized and empowered to implement such action without further authorization by the Limited Partner. Such agreement, approval or consent must be obtained in writing; provided, however, that such agreement, approval or consent shall be deemed to have been given by the Limited Partner if such Partner does not otherwise notify the General Partner in writing within 60 days after such Partner is notified in writing by the General Partner that the Limited Partner's agreement, approval or consent is requested.
ARTICLE VII REPRESENTATIONS AND WARRANTIES
*SECTION 7.1. In General.* As of the Closing Date, each Partner-hereby makes each of the representations and warranties applicable to such Partner as set forth in Section 7.2 hereof, and such representations and warranties shall survive the execution of this Agreement.
*SECTION 7.2. Representations and Warranties* . Each Partner hereby represents and warrants to the Partnership, to each of the other Partners, and to PCI that:
	(a) *Due Incorporation or Formation; Authorization of Agreement* . Such Partner is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Partner is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Partner has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by such Partner and constitutes the legal, valid and binding obligation of such Partner.
	(b) *No Conflict with Restrictions; No Default* . Neither the execution and delivery of this Agreement nor the performance or compliance by such Partner with the terms and provisions hereof (i) will conflict with, violate or result in a breach, whether with notice or lapse of time or both, of any of the terms, conditions or provisions of any law, regulation, order, writ, injunction, decree, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator, applicable to such Partner, (ii) will conflict with, violate, result in a breach of or constitute a default under, whether with notice or lapse of time or both, any of the terms, conditions or provisions of the articles of incorporation or bylaws of such Partner, (iii) will conflict with, violate, result in a breach of or constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights or require any consent, authorization or approval under any indenture, note, bond, mortgage, lease agreement or other instrument or agreement to which such Partner is a party or by which such Partner is or may be bound, or (iv) will result in the creation or imposition of any lien, claim, charge or encumbrance upon any of the material properties or assets of such Partner.
	(c) *Governmental Authorizations.* Any registration, declaration or filing with, or consent, approval, license, permit or other authorization or 'order by, any governmental or regulatory authority, domestic or foreign, that is required in connection with the valid execution, delivery, acceptance and' performance by such Partner of its obligations under this Agreement, or the consummation by such Partner of any transaction contemplated hereby has been completed, made or obtained on or before the date hereof.
	(d) *Litigation* . There are no actions, suits, proceedings or investigations pending or, to the knowledge of such Partner, threatened against or affecting such Partner or any of its properties, assets or businesses in any court or before or by any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit or proceeding, which could, if adversely determined) reasonably be expected to materially impair such Partner's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Partner; and such Partner has not received any currently effective notice of any default, and such Partner is not in default (whether with notice or lapse of time or both), under any applicable order, writ, injunction, decree, permit, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Partner's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Partner.
	(e) *Subsidiary.* All of the outstanding capital stock or ownership interests in the capital and profits of such Partner is owned, directly or indirectly, by its Parent.
	(f) *Investigation* . Such Partner acquired its Interest based upon its own investigation, and the exercise by such Partner of its rights and the performance of its obligations under this Agreement will be based upon its own investigation, analysis and expertise; such Partner's acquisition of its Interest was made for its own account for investment, and not with a view to the sale or distribution thereof; and such Partner is a sophisticated investor possessing an expertise in analyzing the benefits and risks associated with acquiring investments that are similar to the acquisition of its Interest.
	(g) *Confidentiality* . Except as contemplated hereby or required by a court of competent authority or regulatory agency or otherwise in connection with an examination of such Partner's records by appropriate authorities, each Partner shall keep confidential and shall not disclose to others (except its agents and 'advisors) and shall use its reasonable efforts to prevent its Affiliates and any of its, or its Affiliates' present or former employees, agents, and representatives from disclosing to others without the prior written consent of all Partners any information which pertains to this Agreement, any negotiations pertaining thereto, any of the transactions contemplated hereby or the business of the Partnership.
	(h) *Citizenship* . Such Partner is, and except as may be consented to by the other Partners (which consent shall not be unreasonably withheld), shall remain throughout the term of the Partnership, a "citizen of the United States" within the meaning of Section 101(16) of the Federal Aviation' Act and shall notify the General Partner immediately upon becoming aware of any fact or circumstance that would lead reasonably to the conclusion that such Partner is at risk of losing such citizenship.
	(i) *Liens* . Such Partner shall not cause or permit to exist Lessor Liens or Lessor's Liens attributable to or caused by it and will promptly, at its own expense, take such action as may be necessary to discharge any Lessor Liens or Lessor's Liens attributable to it or caused by it.
	(j) *ERISA* . Such Partner did not acquire its Interest in the Partnership with the assets of any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or any "plan" within the meaning of Section 4975(e)(1) of the Code.
	(k) *Public Utility Holding Company Act of 1935.* Such Partner is not, nor will the Partnership be, a "holding company," an "affiliate of a holding company," or a "subsidiary of a holding company" as defined in, or subject to regulation under, the Public Utility Holding Company. Act of 1935, as amended.
*SECTION 7.3. Damages Payments With Respect To Letter Agreements* . In the event that the Partnership is subject to or incurs any claim, loss, damage, liability, cost or expense (including, without limitation, reasonable counsel fees and expenses) in connection with or arising from either Letter Agreement (the " *Letter Agreement Damages* ," and any such Letter Agreement Damages are attributable solely to (a) any act or omission of any Partner resulting directly in the failure or inability of the Partnership to perform any obligation under either Letter Agreement or (b) a misrepresentation of the Partnership under either Letter Agreement which directly results from (i) a fact or circumstance attributable to any Partner or (ii) a misrepresentation or breach of any representation, warranty or covenant by 'any Partner hereunder, then such Partner shall, immediately upon demand, pay to the Partnership an amount equal to the Letter Agreement Damages.
*SECTION 7.4. Damage Payments.* Any damages, indemnification or other payments made to the Partnership with respect to any breach or other violation of any representation, warranty, covenant' or other agreement made pursuant to Article VII hereof, to the extent paid with respect to costs, liabilities or damages incurred by a Partner or an Affiliate thereof, shall immediately be paid by the Partnership to such Partner or Affiliate.
ARTICLE VIII ACCOUNTING, BOOKS AND RECORDS
*SECTION 8.1. Accounting, Books and Records.* The Partnership shall maintain at its principal place of business separate books of account for the Partnership which shall show a true and accurate record in United States dollars of all costs and expenses incurred, all charges made, all credits made and received, and all income derived in connection with the conduct of the Partnership and the operation of its business in accordance with GAAP consistently applied and, to the extent inconsistent therewith, in accordance with this Agreement. The Partnership also shall keep separate books of account that reflect the Capital Accounts of the Partners as maintained pursuant to the provisions of this Agreement. The Partnership shall use the accrual method of accounting in preparation of its annual reports and for tax purposes and shall keep its books and records accordingly. Any Partner or its designated representative shall have the right at its own cost and expense, at any reasonable time, to have access to and inspect and copy the contents of such books or records: The General Partner shall be reimbursed by such Partner for reasonable costs incurred as a result of such inspection. Notwithstanding anything in the Act (including Section 17-305(b) of the Act) or this Agreement to the contrary, the General Partner shall not have the right to keep confidential from the Limited Partner any information concerning the Partnership.
*SECTION 8.2. Reports* . (a) *In General* . The General Partner shall be responsible for the preparation of financial reports of the Partnership and the coordination of financial matters of the Partnership with the Partnership's accountants.
(b) *Annual Reports.* Within ninety (90) days after the end of each Fiscal Year and at such time as distributions are made to the Partners pursuant to Section 12.2 hereof, the General Partner shall cause to be prepared and each Partner to be furnished with audited financial statements accompanied by a report thereon of the Partnership's accountants stating that such statements are prepared and fairly stated in all material respects on a federal income tax basis, and to the extent inconsistent therewith, in accordance with this Agreement, including the following:
	(i) A copy of the balance sheet of the Partnership as of the last day of such Fiscal Year;
	(ii) A statement of income or loss for the Partnership for such Fiscal Year; and
	(iii) A statement of the Partners' Capital Accounts and changes therein for such Fiscal Year;
provided, however , that the requirement of this Section 8.2(b) that the annual financial statements be audited may be waived by the unanimous consent of the Partners.
(c) *Retirement/Liquidation Date Reports.* On the date on which any distribution is made pursuant to Section 10. 8(b) hereof in retirement of any portion' of a Partners Interest and the date on which a final distribution is made to the Partners pursuant to Section 12.2 hereof, the General Partner shall cause to be prepared and delivered to each Partner each of the following statements together with a certificate of the General Partner executed by a financial officer thereof familiar with the financial affairs of the Partnership that such statements have been prepared in accordance with this Agreement:
	(i) A balance sheet as of the date of such distribution setting forth the aggregate Appraised Values for each of the following as individual line items: the Schedule A Assets, all Loans held by the Partnership and any Partnership Subsidiary and any other Permitted Asset held by the Partnership and any Partnership Subsidiary; and
	(ii) A statement of the Partners' Capital Accounts as adjusted immediately prior to such distribution pursuant to Section 3.6 and either Section 10.8 or Section 12.2 hereof, as the case may be.
*SECTION 8.3. Tax Matters Partner; Tax Information.* (a) The General Partner is specifically authorized to act as the "Tax Matters Partner" under the Code and in any similar capacity under state, local or foreign law. The Tax Matters Partner shall have the authority to make any and all elections for federal, state, and local tax purposes including, without limitation, any election, if permitted by applicable law: (i) to adjust the basis of Property pursuant to Code Sections 754, 734(b) and 743(b), or comparable provisions of state or local law, in connection with transfers of Interests and Partnership distributions; (ii) to extend the statute of limitations for assessment of tax deficiencies against the Partners with respect to adjustments to the Partnership's federal, state, local or foreign tax returns; and (iii) to the extent provided in Code Sections 6221 through 6231, to represent the Partnership and the Partners before taxing authorities or courts of competent jurisdiction in tax matters affecting the Partnership and the Partners in their capacities as Partners, and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Partners with respect to such tax matters or otherwise affect the rights of the Partnership and the Partners; provided that, to the extent any such agreement, election, or document might have a material adverse effect on any Partner, such Partner must consent in writing to such agreement, election, or document and the General Partner must reasonably consult with such Partner in any discussions or negotiations associated with such agreement or document.
(b) All necessary tax information shall be delivered by the General Partner to each Partner as soon as practicable but not later than three and one-half (31/2) months after the end of each Partnership taxable year. The General Partner shall file tax returns for the Partnership prepared in accordance with the Code and the Regulations. Each Partner agrees that it will report all Partnership taxable income, gain, loss, deduction and credit for each Partnership taxable year in the manner reflected on the Partnership's U.S. Partnership Return of Income (Form 1065) and related Schedule K-1 furnished to each Partner for such year.
ARTICLE IX AMENDMENTS; MEETINGS
SECTION 9.1. Amendments. Amendments to this Agreement may be proposed by any Partner. Following such proposal, the General Partner shall submit to the Partners a verbatim statement of any proposed amendment and the General Partner shall include in any such submission a recommendation as to the proposed amendment. The General Partner shall seek the written vote of the Partners on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto if it receives the affirmative vote of all of the Partners.
*SECTION 9.2. Meetings of the Partners.* (a) Meetings of the Partners may be called by any Partner. The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners not less than ten (10) Business Days or more than thirty (30) days-prior to the date of such meeting. Partners may vote in person, by proxy at such meeting or by telephone. Whenever the vote or consent of Partners is permitted or required under the Agreement, such vote or consent may be given at a meeting of the Partners or may be given in accordance with the procedure described in Section 9.3 hereof.
(b) For the purpose of determining the Partners entitled to vote on, or to vote at, any meeting of the Partners or any adjournment thereof, the General Partner or the Partner requesting such meeting may fix, in advance, a date as the record date for any such determination. Such date shall not be more than thirty (30) days or less than ten (10) Business Days before any such meeting.
(c) Each Partner may authorize any Person or Persons to act for it by proxy on all matters in which such Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Partner or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Partner executing it.
(d) Each meeting of Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other Person deems appropriate.
*SECTION 9.3. Unanimous Consent* . In the event the consent of the Partners is required for any action to be taken by the Partnership, such consent may be given at a meeting, which may be conducted by conference telephone call, or provided in writing executed by all the Partners.
ARTICLE X TRANSFERS
*SECTION 10.1. Restriction on Transfers* . Except as otherwise permitted by this Agreement, no Partner shall Transfer all or any portion of its Interest.
*SECTION 10.2. Permitted Transfers.* Subject to the conditions and restrictions set forth in Section 10.3 hereof, a Partner may at any time Transfer all or any portion of its Interest to (a) any other Partner or Wholly Owned Affiliate of another Partner, (b) any Wholly Owned Affiliate of the transferor, (c) the transferor's administrator or trustee to whom such interest is transferred involuntarily by operation of law or (d) any Person approved by all the other Partners.
Any Transfer permitted by this Section 10.2 shall be referred to in this Agreement as a " *Permitted Transfer* ."
*SECTION 10.3. Conditions to Permitted Transfers* . A Transfer shall not be treated as a Permitted Transfer under Section 10.2 hereof unless and until the following conditions are satisfied:
	(a) Except in the case of a Transfer involuntarily by operation of law, the transferor and transferee (i) shall execute and deliver to the Partnership such documents and instruments of conveyance as may be necessary or appropriate in the opinion of counsel to the Partnership to effect such Transfer and to confirm the agreement of the transferee to be bound by the provisions of this Article X, and (ii) will comply with the requirements of Code Section 60501. In the case of a Transfer of Interest involuntarily by operation of law, the Transfer 'shall be confirmed by presentation to the Partnership of legal evidence of such Transfer, in form and-substance satisfactory to counsel to the Partnership. In addition, unless the requirements of this sentence have been waived by the General Partner, the Partnership shall be reimbursed by the transferor and/or transferee for all costs and expenses that it reasonably incurs in connection with such Transfer.
	(b) The transferor and transferee shall furnish the Partnership with the transferee's taxpayer identification number, sufficient information to determine the transferee's initial tax basis in the Interest transferred, and any other information reasonably necessary to permit the Partnership to file all required-tax returns and other legally required information statements or returns. Without limiting the generality of the foregoing, the Partnership shall 'not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred Interest until it has received such information.
	(c) Such Transfer will be exempt from all applicable registration requirements and will not violate any applicable laws regulating the transfer of securities and, except in the case of a Transfer of an Interest to another Partner or to an Affiliate of any Partner or involuntarily by operation of law, the transferor shall provide an opinion of counsel to such effect, unless the Partners unanimously agree to waive the requirement that such opinion be provided. Such opinion and counsel shall be reasonably satisfactory to all the Partners.
	(d) The Transfer will not cause the Partnership to be deemed to be an "investment company" under the Investment Company Act of 1940, as amended, and, except in the case of a Transfer of an Interest involuntarily by operation of law, the transferor shall provide an opinion of counsel to such effect, unless the Partners unanimously agree to waive the requirement that such opinion be provided. Such opinion and counsel shall be reasonably satisfactory to all the Partners.
	(e) Except in the case of a Transfer of an Interest involuntarily by operation of law, if the transferor is a General Partner, the transferor and transferee shall provide the Partnership with an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Limited Partner, to the effect that such Transfer will not cause the Partnership to become taxable as a corporation for United States federal income tax purposes.
*SECTION 10.4. Prohibited Transfers* . Any purported Transfer of an Interest that is not a Permitted Transfer shall be null and void and of no force or effect whatever; provided that, if the Partnership is required to recognize a Transfer that is not a Permitted Transfer (or if the General Partner, in its sole discretion, elects to recognize a Transfer that is not a Permitted Transfer), the Interest Transferred shall be strictly limited to the transferor's rights to allocations and distributions as provided by this Agreement with respect to the Transferred Interest, which allocations and distributions may be applied (without limiting any other legal or equitable rights of the Partnership) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Interest may have to the Partnership.
In the case of a Transfer or attempted Transfer of an Interest that is not a Permitted Transfer, the parties engaging or attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Partnership and the other Partner from all cost, liability, and' damage that any of such indemnified Partners may incur (including, without limitation, incremental tax liabilities, lawyers' fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby. Any indemnification payments made to the Partnership under this Section 10.4, to the extent paid with respect to costs, liabilities or other damages incurred by a Partner, shall be paid immediately .by the Partnership to such Partner.
SECTION 10.5. Rights of Unadmitted Assignees. (a) *In General* . A Person who acquires an Interest but who is not admired as a substituted Partner pursuant to Section 10.6 hereof shall be entitled only to allocations and distributions with respect to such Interest in accordance with this Agreement, and shall have no right to any information or accounting of the affairs of the Partnership, shall not be entitled to inspect the books or records of the Partnership, and shall not have any of the rights of a General Partner or a Limited Partner under the Act or this Agreement.
(b) *General Partner* . A transferee who acquires an Interest from a General Partner hereunder by means of a Transfer that is permitted under this Article X, but who is not admired as a substituted General Partner, shall have no authority to act for or bind the Partnership, to inspect the Partnership's books, or otherwise to be treated as a General Partner. Following such a Transfer, the transferor shall not cease to be a General Partner of the Partnership and shall continue to be a General Partner until such time as the transferee is admired as a General Partner.
S *ECTION 10.6. Admission of Substituted Partners.* Subject to the other provisions of this Article X, a transferee of an Interest may be admitted to the Partnership as a substituted Partner only upon satisfaction of the conditions set forth in this Section 10.6:
	(a) The Partners unanimously consent to such admission;
	(b) The Interest with respect to which the transferee is being admitted was acquired by means of a Permitted Transfer;
	(c) The transferee becomes a party to this Agreement as a Partner and executes such documents and instruments as the General Partner may reasonably request (including, without limitation, a counterpart or amendment to this Agreement and an amendment to the Certificate) as may be necessary or appropriate to confirm such transferee as a Partner in the Partnership and such transferee's agreement to be bound by the terms and conditions hereof;
	(d) Unless the requirements of this Section 10.6(d) have been waived by the General Partner, the transferee pays or reimburses the Partnership for all reasonable legal, filing, and publication costs that the Partnership incurs in connection with the admission of the transferee as a Partner with respect to the Transferred Interest;
	(e) If the transferee is a partnership or corporation, the transferee provides the Partnership with evidence satisfactory to counsel for the Partnership that such transferee has made each of the representations and undertaken each of the warranties described in Article VII hereof; and
	(f) In the event' that the transferee of an Interest from a General Partner is admitted as a substituted General Partner hereunder, such transferee shall be deemed admitted to the Partnership as a General Partner immediately prior to the Transfer, and such transferee shall continue the business of the Partnership without dissolution.
*SECTION 10. 7. Distributions and Allocations in Respect of Transferred Interests* . If any Interest is Transferred during any Allocation Year in compliance with the provisions of this Article X, Profits, Losses, each item thereof, and all other items attributable to the Transferred Interest for such Allocation Year shall be divided and allocated between the transferor and the transferee by taking into account their varying Percentage Interests during the Allocation Year in accordance with Code Section 706(d), using any conventions permitted by law and agreed to by the transferor and the transferee. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter shall be made to the transferee. Solely for purposes of making such allocations and distributions, the Partnership shall recognize such Transfer not later than the end of the calendar month during which it is given notice of such Transfer, provided that, if the Partnership is given notice of a Transfer at least ten (10) Business Days prior to the Transfer, the Partnership shall recognize such Transfer as of the date of such Transfer, and provided further that if the Partnership does not receive a notice stating the date such Interest was transferred and such other information as the General Partner may reasonably require within thirty (30) days after the end of the Allocation Year during which the Transfer occurs, then all such items shall be allocated, and all distributions shall be made, to the Person who, according to the books and records of the Partnership, was the owner of the Interest on the last day of such Allocation Year. Neither the Partnership nor the General Partner shall incur any liability for making allocations and distributions in accordance with the provisions of this Section 10.7, whether or not the General Partner or the Partnership has knowledge of any Transfer of ownership of any Interest.
*SECTION 10.8. Partial Retirement of Limited Partner's Interest. Determination of Appraised Values and Gross Asset Values.* (a) *In General* . The General Partner may at any time elect to cause a portion of the Limited Partner's Interest to be retired in accordance with this Section 10.8 by giving written notice of its election to the Partnership and to the Limited Partner; provided that no Liquidating Event (or event which, with notice or lapse of time, or both, would constitute a Liquidating Event) shall have occurred and be continuing, immediately before or after giving effect to such retirement, and provided further that the Limited Partner has a positive Capital Account balance, taking into account the adjustments and allocations set forth in Section 10.8(b) hereof that would result from the distribution in Section 10.8(b) hereof (other than the distribution itself). Notwithstanding the immediately preceding sentence, the General Partner, without the unanimous consent of the Partners, shall not be able to retire any portion of the Limited Partner's Interest that would cause the Limited Partner's Percentage Interest or positive Capital Account balance to fall below 50 percent of the total Percentage Interests or Capital Account balances of all of the Partners. Any notice given pursuant to this Section' 10.8(a) (a "Retirement Notice") shall include (i) a statement of the amount to be distributed in retirement of any portion of the Limited Partner's Interest and (ii) the date on which the distribution required by Section 10.8(b) hereof shall be made (the "Retirement Date"), which date shall not be later than 30 Business Days after the date of such written notice.
(b) *Distributions Upon Retirement* . In the event that any portion of the Limited Partner's Interest is retired pursuant to Section 10.8(a) hereof, (x) the value of the Partnership's assets shall be determined in accordance with this Section 10.8(b) and the Gross Asset Values of all Partnership assets shall be adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" as of the applicable Retirement Date, (y) Profits, Losses and other items of Partnership income, gain, loss or deduction for the period beginning on the first day of the Allocation Year during which the Retirement Date occurs and ending on the Retirement Date shall be allocated pursuant to Article III hereof. On the applicable Retirement Date, the Partnership shall distribute to the Limited Partner an amount of Partnership Property the aggregate Appraised Values of which, as of the Retirement Date, are, (A) in the event that the entire Interest of the Limited Partner is to be retired, equal to the positive balance in the Limited Partner's Capital Account as of the Retirement Date immediately after giving effect to the adjustments and allocations required by the first sentence of this Section 10.8(b) and as reflected on the statement of Capital Accounts provided to the Partners pursuant to Section 8.2(c)(ii), or (B) in all other cases, equal to the amount stated in the applicable Retirement Notice.
	(i) For purposes of determining the amount of any adjustment to the Gross Asset Values of Partnership assets pursuant to subparagraph (ii) or (iii) of the definition of "Gross Asset Value," the Appraised Value of each of the Permitted Assets will be determined in accordance with this Section 10.08(b)(i).
		(A) The Appraised Value of any Loan shall be equal to the par value of such Loan plus accrued interest thereon, if any; provided that if there has occurred and is continuing any payment or other material default with respect to any such Loan at the time such value is being determined, the Appraised Value of such Loan shall be determined by an investment or commercial bank of national recognition selected by the General Partner with the consent of the Limited Partner (which consent shall not be unreasonably withheld).
		(B) The Appraised Value of the Schedule A Assets shall be determined by appraisal by a qualified appraiser appointed by the General Partner with the consent of the Limited Partner (which consent shall not be unreasonably withheld), using substantially the same valuation methodology as was used in determining the Gross Asset Values of the Schedule A Assets as of the Closing Date.
		(C) The Appraised Value of any cash shall be valued at its face value.
		(d) The Appraised Value of any Partnership Subsidiary Stock shall be equal to the aggregate Appraised Values of all Permitted Assets held by such Partnership Subsidiary reduced by the present value of all liabilities of such Partnership Subsidiary, in each case multiplied by the percentage of such Partnership Subsidiary's stock then held by 'the Partnership.
	(ii) In the event that the General Partner has elected to retire all or any portion of the Limited Partner's Interest in the Partnership pursuant to Section 10.8(a) hereof, distributions shall be made to the Limited Partner, and such portion of the Limited Partner's Interest in the Partnership shall be retired, at 11:00 a.m. on the Retirement Date specified in the Retirement Notice, which date shall not be less than five (5) Business Days or more than fifteen (15) Business Days after the date on which the Retirement Notice was given pursuant to Section 10.8(a) hereof.
ARTICLE XI GENERAL PARTNER
*SECTION 11.1. Covenant Not to Withdraw, Transfer or Dissolve* . Except as otherwise permitted by this Agreement, the General Partner hereby covenants and agrees not to (a) take any action .to file a certificate of dissolution or its equivalent with respect to itself, (b) take any action that would cause a Voluntary Bankruptcy of such General Partner, (c) withdraw or attempt to withdraw from the Partnership, (d) exercise any power under the Act to dissolve the Partnership, (e) Transfer all or any portion of its Interest as a General Partner, or (f) petition for judicial dissolution of the Partnership. Further, the General Partner hereby covenants and agrees to continue to carry out the duties of a General Partner hereunder until the Partnership is dissolved and liquidated pursuant to Article XII hereof.
*SECTION 11.2. Termination of Status as General Partner* . (a) A General Partner shall cease to be a General Partner upon the first to occur of (i) the Bankruptcy of such Partner; (ii) the Transfer of such Partner's entire Interest as a General Partner unless the transferee does not become a substituted General Partner; (iii) the involuntary Transfer by operation of law of such General Partner's entire Interest in the Partnership, (iv) the vote of the Limited Partner to approve a request by such General Partner to retire, or (v) the vote of the Limited Partner to remove such General Partner after such General Partner has attempted to make a Transfer of its Interest that is not permitted by Section 10.2 hereof, committed a material breach of this Agreement or its representations and warranties hereunder, or committed any other act or suffered any Other condition that would justify a decree of dissolution Of the Partnership under the laws of the State of Delaware. In the event a Person ceases to be a General Partner without having Transferred its entire Interest as a General Partner, such Person shall be treated as an unadmitted' transferee of an Interest as a result of a Permitted Transfer of an Interest pursuant to Section 10.5 hereof.
If a Person ceases to be a General Partner for any reason hereunder, such Person shall continue to be liable as a General Partner for all debts and obligations of the Partnership existing at the time such Person ceases to be a General Partner, regardless of whether, at such time, such debts or liabilities were known or unknown, actual or contingent. A Person shall not be liable as a General Partner for Partnership debts and obligations arising after such Person ceases to be a General Partner. Any debts, obligations, or liabilities in damages to the Partnership or another Partner of any Person who ceases to be a General Partner shall be collectible by any legal means and the Partnership is authorized, in addition to any other remedies at law or in equity, to apply any mounts otherwise distributable or payable by the Partnership to such Person to satisfy such debts, obligations, or liabilities.
(b) It is the intention of the Partners that the Partnership not dissolve as a result of the cessation of any Person's status as a General Partner; provided, however, that if it is determined by a court of competent jurisdiction that the Partnership has dissolved, the provisions of Section 12.1 hereof shall govern.
(c) If at the time a Person ceases to be a General Partner, such Person is also a Limited Partner with respect to an Interest other than its Interest as a General Partner, such cessation shall not affect such Person's rights and obligations with respect to such Interest.
*SECTION 11.3. Election of Additional General Partners* . Provided the Partnership has one General Partner, any Partner may nominate one or more Persons for election as additional General Partners. The election of an additional General Partner shall require an affirmative vote of all of the Partners.
ARTICLE XII DISSOLUTION AND WINDING UP
*SECTION 12.1. Liquidating Events* . The Partnership shall dissolve and commence winding up and liquidating upon the first to occur of any of the following (each a " *Liquidating Event* "):
	(a) The unanimous vote of the Partners to dissolve, wind up, and liquidate the Partnership;
	(b) The Bankruptcy of the General Partner; provided that such Bankruptcy shall not constitute a Liquidating Event if the Partnership is continued pursuant to' this Section 12.1;
	(c) A judicial determination that an event has occurred that makes it unlawful to carry on the business of the Partnership; or
	(d) The withdrawal or removal of the General Partner, the assignment by the General Partner of its entire Interest or any other event that causes the General Partner to cease to be a general partner under the Act, provided that any such event shall not constitute a Liquidating Event if the Partnership is not dissolved or is continued pursuant to this Section 12.1.
The Partners hereby agree that, notwithstanding any provision of the Act or the Delaware Uniform Partnership Act (or any corresponding provisions of succeeding law), the Partnership shall not dissolve prior to the occurrence of a Liquidating Event. Upon the occurrence of any event set forth in Section 12.1(b) or 12.1(d) hereof (so long as no other Liquidating Event has occurred), the Partnership shall not be dissolved or required to be wound up if (x) at the time of such event there is at least one remaining General Partner and that General Partner carries on the business of the Partnership (any such remaining General Partner being hereby authorized to carry on the business of the Partnership), or (y) within ninety (90) days after such event all remaining Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such event, of one or more additional General Partners. If it is determined, by a court of competent jurisdiction, that the Partnership has dissolved prior to the occurrence of a Liquidating Event, or if upon the occurrence of an event described in Section 12.1(b) or 12.1(d) hereof, the Partners fail to appoint a substitute General Partner effective as of such event and--to agree to continue the business of the Partnership as provided in this Section 12.1, then within an additional one hundred and eighty (180) days after such determination or the last day of such ninety (90) day period, as the case may be (the " *Reconstitution Period* "), the remaining Partner(s) may elect to reconstitute the Partnership and continue its business on the same terms and conditions set forth in this Agreement by forming a new limited partnership on terms identical to those set forth in this Agreement and having as a general partner a Person elected by the remaining Partner(s). Unless such an election is made within the Reconstitution Period, the Partnership shall wind up its affairs in accordance with Section 12.2 hereof. If such an election is made within the Reconstitution Period, then:
	(i) The reconstituted limited partnership shall continue until the occurrence of a Liquidating Event as provided in 'this Section 12.1;
	(ii) If the successor general partner is not a former General Partner, then the Interest of any former General Partner shall be treated thenceforth as the Interest of a Limited Partner; and
	(iii) All necessary steps shall be taken to cancel this Agreement and the Certificate and to enter into a new partnership agreement and certificate of limited partnership, and the successor general partner may for this purpose exercise the powers of attorney granted the General Partner pursuant to Article XIII hereof;
provided that the right of the remaining Partner(s) to select a successor general partner and to reconstitute and continue the business of the Partnership shall not exist and may not be exercised unless the Partnership has received an opinion of counsel that the exercise of the right would not result in the loss of limited liability of any Limited Partner and neither the Partnership nor the reconstituted partnership would cease to be treated as a partnership for federal income tax purposes upon the exercise of such right to continue.
*SECTION 12.2. Winding Up* . Upon the occurrence of a Liquidating Event (unless the Partnership is not to be wound up pursuant to Section 12.1 hereof), the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners, and no Partner shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership's business and affairs. To the extent not inconsistent with the foregoing, all covenants and obligations in this Agreement shall continue in full force and effect until such time as the Partnership Property has been distributed pursuant to this Section 12.2 and the Certificate has been canceled in accordance with the Act. The General Partner (or, in the event there is no remaining General Partner, any Person that may be appointed by the remaining Partner(s)) shall be responsible for overseeing the winding up and dissolution of the Partnership, shall take full account of the Partnership's liabilities and Property, shall cause the Property to be liquidated as promptly as is consistent with obtaining the fair value thereof unless it elects to make distributions of all or any part of the Property in. kind and except as otherwise provided in this Section -12.2, and shall cause the Property or the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed in the following order:
	(a) First, to creditors other than the General Partner but including any Limited Partner who is a creditor, to the extent otherwise permitted by law, in satisfaction of all of the Partnership's debts and liabilities (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for which reasonable provision or payment has been made and liabilities for distributions to Partners under Sections 17-601 or 17-604 of the Act;
	(b) Second, to the General Partner, in its capacity-as a creditor of the Partnership, in satisfaction of all of the Partnership's debts and liabilities (whether by payment or the making of reasonable provision for payment thereof); and
	(c) The balance, if any, to the Partners in accordance with their Capital Accounts, after giving effect to all contributions, distributions, and allocations for all periods.
The General Partner shall not receive any additional compensation for any services performed pursuant to this Article XII, other than compensation pursuant to Section 5.6(c) hereof. The General Partner understands and agrees that by accepting the provisions of this Section 12.2 setting forth the priority of the distribution of the assets of the Partnership to be made upon its liquidation, such General Partner expressly waives any right which it, as a creditor of the Partnership, might otherwise have under the Act to receive distributions of assets pari passu with the other creditors of the Partnership in connection with a distribution of assets' of the Partnership in satisfaction of any liability of the Partnership, and hereby subordinates to said creditors any such right.
Upon liquidation of the Partnership pursuant to this Article XII and in accordance with the procedures set forth in Section 10. 8(b)(i) hereof, the assets of the Partnership shall be valued, the Gross Asset Value of Partnership assets shall be adjusted and Profits, Losses and other items of Partnership income, gain, loss or deduction shall be allocated. For purposes of the preceding sentence of this Section 12.2, the Retirement Date referred to in Section 10.8(b) hereof shall be deemed to be, in the case of a liquidation as a result of an event described in (a) Section 12. l(a) hereof, the date on which the vote referred to in Section 12. l(a) hereof occurs, (b) Section 12. l(b) hereof, the date on which an event of Bankruptcy shall occur with respect to the General Partner, (c) Section 12. l(c) hereof, the date on which the judicial determination is issued or (d) the date on which the event described in Section 12. l(d) hereof occurs.
In connection with the winding up of the Partnership and the liquidation of its assets, the Schedule A Assets may be sold for their Appraised Value as determined in accordance with Section 10.8(b)(i) hereof.
Unless the Partners otherwise unanimously agree, undivided interests in each item of Property and proportionate share of cash (including cash from the disposition of Property) shall be distributed to the Partners in proportion to the respective balances in the Partners' Capital Accounts as determined pursuant to Section 12.2(c) hereof.
*SECTION 12.3. Compliance With Certain Requirements of Regulations Deficit Capital Accounts* . (a) In the event the Partnership is "liquidated" within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g),
	(i) Distributions shall be made pursuant to this Article XII to the Partners who have positive Capital Accounts .in compliance with Regulations Section 1.704-1 (b) (2) (ii) (b) (2);
	(ii) If any General Partner's Capital Account has a deficit balance (after giving effect to all contributions, distributions, and allocations for all taxable years, including the year during which such liquidation occurs), such General Partner shall contribute to the capital of the Partnership the amount necessary to restore such deficit balance to zero in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3);
	(iii) If the Limited Partner has a deficit balance in its Capital Account (after giving effect to all contributions, distributions' and allocations for all Fiscal Years, including the Fiscal Year during which such liquidation occurs), the Limited Partner shall have no obligation to make any contribution to the capital of the-Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever.
(b) In the discretion of the General Partner, a pro rata portion of the distributions that would otherwise be made to the Partners pursuant to Section 12.2 hereof may be:
	(i) distributed to a trust established for the benefit of the Partners for the purposes of liquidating Partnership assets, collecting mounts owed to the Partnership, and paying any contingent liabilities or obligations of the Partnership or of the General Partner arising out of or in connection with the Partnership. The assets of any such trust shall be distributed to the Partners from time to time, in the reasonable discretion of the General Partner in the same proportions as the amount distributed to such trust by the Partnership would otherwise have been distributed to the Partners pursuant to Section 12.2 hereof; or
	(ii) withheld to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership, provided that such withheld amounts shall be distributed to the Partners as soon as practicable.
The portion of the distributions that would otherwise have been made to the General Partner and the Limited Partner that is instead distributed to a trust pursuant to Section 12.3(b)(i) hereof or withheld to provide a reserve pursuant to Section 12.3(b)(ii) hereof shall be determined in the same manner as the expense or deduction would have been allocated if the Partnership had realized an expense equal to such amounts immediately prior to distributions being made pursuant to Section 12.2 hereof.
*SECTION 12.4. Deemed Contribution and Distribution* . Notwithstanding any other provision of this Article XII, in the event the Partnership is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Property shall not be liquidated, the Partnership's liabilities shall not be paid or discharged, and the Partnership's affairs shall not be wound up. Instead, solely for federal income tax purposes, the Partnership shall be deemed to have contributed all Property and transferred all Partnership liabilities to a new limited partnership in exchange for an interest in the new limited partnership, and immediately thereafter, the Partnership will be deemed to liquidate by distributing interests in the new limited partnership to the Partners.
*SECTION 12.5. Rights of Partners* . Except as otherwise provided in this Agreement, (a) each Partner shall look solely to the assets of the Partnership for the return of its Capital Contribution and shall have no right or power to demand or receive property other than cash from the Partnership, and (b) no Partner shall have priority over any other Partner as to the return of its Capital Contributions, distributions, or allocations.
*SECTION 12.6. Notice of Dissolution* . In the event a Liquidating Event occurs or an event occurs that would, but for provisions of Section 12.1 hereof, result in a dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter, provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business (as determined in the discretion of the General Partner) and shall publish notice thereof in a newspaper of general circulation in each place in which the Partnership regularly conducts business (as determined in the discretion of the General Partner).
ARTICLE XIII POWER OF ATTORNEY
*SECTION 13.1. General Partner as Attorney-In-Fact* . (a) *Grant of Power* . Each Partner hereby makes, constitutes, and appoints the General Partner and each successor General Partner, with full power of substitution and re-substitution, its true and lawful attorney-in-fact for it and in its name, place, and stead and for its use-and benefit, to sign, execute, certify, acknowledge, swear to, file, and record (a) all certificates of limited partnership, amended name or similar certificates, and other certificates and instruments (including counterparts of this Agreement) which the General Partner may deem necessary or appropriate to be filed by the Partnership under the laws of the State of Delaware or any other state or jurisdiction in which the Partnership is doing or intends to do business; (b) any and all amendments or changes to this Agreement and the instruments described in (a), as now or hereafter amended, which the General Partner may deem necessary or appropriate to effect a change or modification of the Partnership in accordance with the terms of this Agreement, including, without limitation, amendments or changes to reflect (i) the exercise by the General Partner of any power granted to it under this Agreement; (ii) any amendments adopted by the Partners in accordance-with the terms of this Agreement; (iii) the admission of any substituted Partner; and (iv) the disposition by any Partner of its Interest; and (c) all certificates of cancellation and other instruments which the General Partner .may deem necessary or appropriate to effect the dissolution and termination of the Partnership pursuant to the terms of this Agreement; and (d) any other instrument which is now or may hereafter be required by law to be filed on-behalf of the Partnership or is deemed necessary or appropriate by the General Partner to carry out fully the provisions of this Agreement in accordance with its terms. Each Partner authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary or advisable in connection with any of the foregoing, hereby giving each such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite or advisable to be done in connection with the foregoing as fully as such Partner might or could do personally, and hereby ratifying and confirming all-that any such attorney-in-fact shall lawfully do or cause to be done by virtue thereof or hereof.
(b) *Form of Signature.* To the extent the laws of any jurisdiction in which the Partnership engages in business requires that a limited partner sign, execute, certify, acknowledge, swear to, file, or record a certificate or other document, such certificate or other document shall be executed in the form set forth below:
			Potomac Nevada Leasing Corporation, General Partner By: Potomac Nevada Leasing Corporation, attorney-in-fact under Power of Attorney, dated as of January 7, 1999 By:_________________________ Title:________________________
*SECTION 13.2. Nature as Special Power* . The power of attorney granted pursuant to this Article XIII:
	(a) Is a special power of attorney coupled with an interest and is irrevocable;
	(b) May be exercised by any such attorney-in-fact by listing the Partner(s) executing any agreement, certificate, instrument, or other document with the single signature of any such attorney-in-fact acting as attorney-in-fact for such Partner(s); and
	(c) Shall survive the Bankruptcy, insolvency, dissolution, or cessation of existence of a Partner and shall survive the delivery of an assignment by a Partner of the whole or a portion of its Interest, except that where the assignment is of such Partner's entire Interest and the assignee, with the consent of the General Partner, is admired as a substituted Partner, the power of attorney shall survive the delivery of such assignment for the sole purpose of enabling any such attorney-in-fact to effect such substitution.
ARTICLE XIV MISCELLANEOUS
*SECTION 14.1. Notices.* Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and sent by overnight courier, or by telephone or facsimile, if such telephone conversation or facsimile is followed by a hard copy of the telephone conversation or facsimile communication sent by overnight courier, charges prepaid and addressed as follows, or to such other address as such Person may from time to time specify by notice to the Partners:
	(a) If to the Partnership, to the Partnership at the address set forth in Section 1.4 hereof;
	(b) If to the General Partner, to the address set forth in Section 2.1 hereof; and
	(c) If to the Limited Partner, to the address set forth in Section 2.2 hereof.
Any such notice delivered, mailed or dispatched shall become effective when received. A return receipt will be conclusive evidence of receipt. Any Person may from time to time specify a different address by notice to the Partnership and the Partners.
*SECTION 14.2. Binding Effect* . Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Partners and their respective successors, transferees, and assigns.
*SECTION 14.3. Construction* . Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Partner. The terms of this Agreement are intended to embody the economic relationship among the Partners and shall not be subject to modification by, or be conformed with, any actions by the Internal Revenue Service except as this Agreement may be explicitly so amended and except as may relate specifically to the filing of tax returns.
*SECTION 14.4. Time* . Time is of the essence with respect to this Agreement.
*SECTION 14.5. Headings* . Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof.
*SECTION 14. 6. Severability* . Except as otherwise provided !n the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The preceding sentence of this Section 14.6 shall be of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Partner to lose the benefit of its economic bargain.
SECTION 14.7. Incorporation by Reference. Every exhibit, schedule, and other appendix attached to this Agreement and referred to herein is not incorporated in this Agreement by reference unless this Agreement expressly otherwise provides.
*SECTION 14. 8. Further Action* . Each Partner, upon the request of the General Partner, agrees to perform all further acts and execute, acknowledge, and deliver any documents which may be reasonably necessary, appropriate, or desirable to carry out the provisions of this Agreement.
*SECTION 14.9. Variation of Pronouns* . All pronouns and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
*SECTION 14.10. Governing Law* . The laws of the State of Delaware shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties of the Partners.
*SECTION 14.11. Waiver of Action for Partition; No Bill For Partnership Accounting* . Each Partner irrevocably waives any right that it may have to maintain any action for partition with respect to any of the Partnership Property. To the fullest extent permitted by law, each Partner covenants that it will not (except with the consent of the General Partner) file a bill for Partnership accounting.
*SECTION 14.12. Consent to Jurisdiction; Service of Process* . Each Partner (i) irrevocably submits to the non-exclusive jurisdiction of any Delaware State court or Federal court sitting in Wilmington, Delaware in any action arising out of this Agreement, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum, and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court. Each Partner hereby appoints the Partnership at its registered office in the State of Delaware, located at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801 (or any successor appointed by a Partner, provided, that prior written notice of such successor be sent to the other Partner) as its designee, appointee and agent to receive, accept and acknowledge, for and on behalf of each such Partner, service of process; service of process so served also shall be delivered to the Partner being so served in accordance with the requirements of Section 14.1 hereof.
*SECTION 14.13. Counterpart Execution* . This Agreement may be executed in any number of counterparts with the same effect as if all the Partners had signed the same document. All counterparts shall be construed together and shall constitute one agreement.
*SECTION 14.14. Sole and Absolute' Discretion* . Except as otherwise provided in this Agreement (including Article V hereof), all actions which the General Partner may take and all determinations which the General Partner may make pursuant to this Agreement may be taken and made at the sole and absolute discretion of the General Partner, as the case may be.
*SECTION 14.15. Specific Performance* . Each Partner agrees with the other Partners that the other Partners would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the non-breaching Partners may be entitled, at law or in equity, the non-breaching Partners shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof.
*SECTION 14. 16. No Material Impairment* . No Partner shall take any action that could impair materially such Partner's ability to perform its duties and obligations under this Agreement.
*SECTION 14. 17. Duties and Liabilities of Partners* . The duties and liabilities of the Partners to each other and to the Partnership are governed by the terms of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Third Amended and Restated Agreement of Limited Partnership as of the day first above set forth.
[signatures follow on separate pages]

GENERAL PARTNER:

POTOMAC NEVADA LEASING CORPORATION

By: /s/ KEVIN MCGOWAN
Title: Treasurer

THIS IS A SIGNATURE PAGE TO THE THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF POTOMAC LEASING ASSOCIATES, L.P. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS GENERAL PARTNER

LIMITED PARTNER:

POTOMAC NEVADA CORPORATION

By: /s/ LESLIE C. ZIMBERG
Title: Vice President and Secretary

SCHEDULE A

PHASE I ASSETS
AS OF THE CLOSING DATE

Accrued Rent Receivable

1988 Boeing 737-322 (N342UA)

1988 Boeing 737-322 (N341UA)

PHASE II ASSETS
AS OF THE CLOSING DATE

Accrued Rent Receivable

McDonnell Douglas DC-9-82 (N71828)

McDonnell Douglas DC-9-82 (N14831)

CERTIFICATE OF LIMITED PARTNERSHIP OF POTOMAC LEASING ASSOCIATES, L.P.
This Certificate of Limited Partnership of Potomac Leasing Associates, L.P. (the "Partnership"), dated as of the 15 ^th day of April, 1993, is being duly executed and filed by POTOMAC NEVADA LEASING CORPORATION, a Nevada corporation, as the sole general partner, to form a limited partnership under the Delaware Revised Uniform Limited Partnership Act (6 Del . C . Section 17-101, et seq .).
1. Name . The name of the limited partnership formed hereby shall be Potomac Leasing Associates, L.P.
2. Registered Office . The registered office of the Partnership in the State of Delaware &s located at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
3. Registered Agent . The name and address of the registered agent of the Partnership for service of process in the State of Delaware is located at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
4. General Partner . The name and mailing address of the sole general partner of the Partnership are as follows:
POTOMAC NEVADA LEASING CORPORATION 241 Ridge Street Fourth Floor Reno, Nevada 89501
IN WHEREOF, the undersigned has executed this Certificate of Limited Partnership as of the date first above written.
	POTOMAC NEVADA LEASING CORPORATION By: /s/ GARY R. CORRELL Name: Gary R. Correll Title: President
	STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 01:25 PM 04/15/1993 931055198 - 2332803

CERTIFICATE OF AMENDMENT TO CERTIFICATE OF LIMITED PARTNERSHIP OF POTOMAC LEASING ASSOCIATES, L.P. _____________________________________________________
POTOMAC LEASING ASSOCIATES, L.P., a limited partnership organized under the Delaware Revised Uniform Partnership Act (the "Act"), for the purpose of amending its Certificate of Limited Partnership pursuant to Section 17-202 of the Act, hereby certifies that effective on May 23 ^rd , 1997, Paragraphs 3 & 4 of the Certificate of Limited Partnership is amended to read in its entirety as follows:
	The address of the registered office of the Partnership in Delaware is: 1013 Centre Road, in the city of Wilmington, in the county of New Castle. The Partnership's registered agent at that address is: Corporation Service Company.
IN WITNESS WHEREOF, this Certificate of Amendment has been duly executed by a general partner thereunto duly authorized as of the 23 ^rd day of May 1997.
		POTOMAC NEVADA LEASING CORPORATION By: /s/ LESLIE C. ZIMBERG Type Name: Leslie C. Zimberg - Vice President & Secretary General Partner

STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 12:15 PM 03/31/1999 991126292 - 2332803
AMENDED AND RESTATED CERTIFICATE OF LIMITED PARTNERSHIP OF POTOMAC LEASING ASSOCIATES, L.P.
This Amended and Restated Certificate of Limited Partnership of Potomac Leasing Associates, L.P. (the "Partnership"), dated March 31, 1999, has been duly executed and is being filed by the undersigned, being the sole General Partner of the Partnership, in accordance with the provisions of 6 Del. C. Section 17-210, to amend and restate the Certificate of Limited Partnership of the Partnership, which was filed on April 15, 1993 with the Secretary of State of the State of Delaware (the "Certificate"), which has been amended by a Certificate of Amendment to Certificate of Limited Partnership field on May 28, 1997, to form the Partnership as a limited partnership under the Delaware Revised Uniform Limited Partnership Act (6 Del. C. Sections 17-101, et seq.).
The Certificate is hereby amended and restated in its entirety to read as follows:
1. Name . The name of the limited partnership its Potomac Leasing Associates, L.P.
2. Registered Office . The registered office Partnership in the State of Delaware is located in 1013 Centre Read, Wilmington, New Castle County, Delaware 19805.
3. Registered Agent . The name and address of the registered agent of the Partnership for service of process in the State of Delaware are Corporation Service Company, 1013 Centre Road, Wilmington, New Castle County, Delaware 19805.
4. General Partner . The name and business address of the sole General Partner of the Partnership are as follows:
Potomac Nevada Leasing Corporation 1517 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator
IN WITNESS WHEREOF, the undersigned, being the sole General Partner of the Partnership, has caused this Amended and Restated Certificate of Limited Partnership to be executed as of the date first-above written.
	POTOMAC NEVADA LEASING CORPORATION By: /s/ LESLIE C. ZIMBERG Name: Leslie C. Zimberg Title: Vice President and Secretary

FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA NOV 13 1992 CHERYL A. LAU SECRETARY OF STATE
ARTICLES OF INCORPORATION OF POTOMAC NEVADA CORPORATION, a Nevada Corporation
The undersigned natural person acting as an incorporator of a corporation under Chapter 78 of the Nevada Revised Statutes adopts the following articles of incorporation:
ARTICLE I
The name of the Corporation is *POTOMAC NEVADA CORPORATION* , a Nevada corporation (the "Corporation").
ARTICLE II
The address and location of the principal office of the Corporation in the State of Nevada is 241 Ridge Street, Reno, Washoe County, Nevada 89501.
ARTICLE III
The name and address of the resident agent for the Corporation in the State of Nevada is Sierra Corporate Services, 241 Ridge Street, Fourth Floor, Reno, Nevada 89501.
ARTICLE IV
The purpose for which the Corporation is formed is to engage in any lawful activity.
ARTICLE V
*Section 1* . The Corporation shall be authorized to issue 2,500 shares of capital stock with par value of ONE DOLLAR ($1.00) per share.
*Section 2* . All of the shares of stock shall be of the same class, without preference or distinction.
*Section 3* . The capital stock of the Corporation, after the amount of capital has been paid in money, property or services, as the board of directors shall determine, shall not be subject to assessment to pay the debts of the Corporation, nor for any other purpose, and no stock issued as fully paid shall ever be assessable or assessed and the articles of incorporation shall not be amended in this respect.
*Section 4* . Cumulative voting by any shareholder is denied.
*Section 5* . No shareholder shall, by reason of holding shares of any class of stock, have any preemptive or preferential right to purchase or subscribe for any shares of any class of stock now or hereafter authorized or any notes, debentures or bonds convertible into or carrying options or warrants to purchase shares of any class of stock now or hereafter authorized, whether or not the issuance of any shares, notes, debentures or bonds would adversely affect the dividend or voting rights of the shareholder.
ARTICLE VI
The period of existence of the Corporation is perpetual.
ARTICLE VII
The name and post office address of the Corporation is Robert E. Armstrong, P. O. Box 2670, Reno, Nevada 89505.
ARTICLE VIII
The members of the governing board of the Corporation shall be designated as "directors". The board of directors shall consist of five (5) members. The number of directors of the Corporation may be increased or decreased from time to time as provided in the bylaws of the Corporation. The names and addresses of the members of the initial board of directors who shall serve as director until his or her successors shall have been elected and qualified is as follows:
NAME	ADDRESS
H. Lowell Davis Paul F. Naughton William Dana Shapiro William D. Stockbridge Margie Vollmann	506 Richards Lane Alexandria, Virginia 22302 1058 Harriman Street Great Falls, Virginia 22066 1033 Broad Branch Court McLean, Virginia 22101 2149 California Street, N.W. Washington, D.C. 20008 2149 California Street, N.W Reno, Nevada 89503
ARTICLE IX
In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by Chapter 78 of the Nevada Revised Statutes or other statutes or laws of the State of Nevada, the board of directors is expressly authorized: (i) to make, amend, alter, or repeal the bylaws of the Corporation; (ii) to adopt from time to time bylaw provisions with respect to indemnification or directors, officers, employees, agents and other persons as it shall deem expedient and in the best interests of the Corporation and to the extent permitted by law; and (iii) to fix and determine designations, preferences, privileges, rights and powers and relative, participating, optional or other special rights, qualifications, limitations or restrictions on the capital stock of the Corporation as provided by Nev. Rev. Stat. Section 78.195, unless otherwise provided herein.
ARTICLE X
To the extent specified from time to time by the board of directors, no officer or director of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as an officer or director, exciting only (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or Co) the payment of dividends in violation of Nev. Rev. Stat. Section 78.300. No amendment or repeal of this Article IX applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and executed these Articles of Incorporation this 12th day of November, 1992.
	/s/ ROBERT E. ARMSTRONG Robert E. Armstrong
STATE OF NEVADA ) ) COUNTY OF WASHOE ) ss.
On this 12 ^th day of November, 1992, personally appeared before the undersigned, a Notary Public, in and for the County of Washoe, State of Nevada, Robert E. Armstrong, known to me to be the person described in and who executed the foregoing instrument freely and voluntarily and for the uses and purposes mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
	/s/ TERESA W. STOVAK NOTARY PUBLIC TERESA W. STOVAK Notary Public-State of Nevada Appointment Recorded in Washoe County MY APPOINTMENT EXPIRES APR. 7, 1994
FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA MAR 2, 1993 CHERYL A. LAU, SECRETARY OF STATE
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF POTOMAC NEVADA CORPORATION A Nevada Corporation
WILLIAM D. STOCKBRIDGE and WILLIAM DANA SHAPIRO hereby certify that:
1. They are the president and secretary, respectively, of POTOMAC NEVADA CORPORATION, a Nevada corporation (this "Corporation");
2. The original articles of incorporation of the Corporation were filed in the Office of the Secretary of State of the State of Nevada on the 13th day of November, 1992.
3. Capital has been paid to the Corporation.
4. It has been unanimously consented to and approved by the shareholders of the Corporation and the board of directors of the Corporation that ARTICLE X of the articles of incorporation of POTOMAC NEVADA CORPORATION, a Nevada corporation, is amended to read as follows:
"ARTICLE X
To the extent specified from time to time by the board of directors, no officer or director of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as an officer or director, excepting only (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of dividends in violation of Nev. Rev. Stat. Section 78.300. No amendment or repeal of this Article X applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law."
DATED: This 28th day of January, 1993.
	/s/ WILLIAM D. STOCKBRIDGE WILLIAM D. STOCKBRIDGE, President /s/ WM. SHAPIRO WILLIAM DANA SHAPIRO, Secretary
DISTRICT OF COLUMBIA) ss.
On this 28th day of January , 1993 personally, appeared before me, a Notary Public, WILLIAM D. STOCKBRIDGE, as President of POTOMAC NEVADA CORPORATION, a Nevada corporation, personally known to me to be the person who executed the above Certificate of Amendment of Articles of Incorporation of Potomac Nevada Corporation on behalf of said Corporation, and acknowledged to me that he executed the same for the purposes therein stated.
	/s/ KIM B. JONES NOTARY PUBLIC Kim B. Jones, Notary Public District of Columbia My Commission Expires May 14, 1998
DISTRICT OF COLUMBIA) ss.

	/s/ KIM B. JONES NOTARY PUBLIC Kim B. Jones, Notary Public District of Columbia My Commission Expires May 14, 1998
On this 28 ^th day of January, 1993 personally, appeared before me, a Notary Public, WILLIAM DANA SHAPIRO, as Secretary of POTOMAC NEVADA CORPORATION, a Nevada corporation, personally known to me to be the person who executed the above Certificate of Amendment of Articles of Incorporation of Potomac Nevada corporation on behalf of said Corporation, and acknowledged to me that he executed the same for the purposes there in stated.

BYLAWS OF POTOMAC NEVADA CORPORATION

ARTICLE 1 Identification
Section 1.01 Name . The name of the Corporation is POTOMAC NEVADA CORPORATION .
Section 1.02 Resident Office and Resident Agent . The address of the resident office of the Corporation is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501; and the name of the resident agent at this address is SIERRA CORPORATE SERVICES.
Section 1.03 Other Offices . Branch or subordinate offices may be established by the Board of Directors.
Section 1.04 Seal . The seal of the Corporation will be circular in form and mounted upon a metal die, suitable for impressing the same upon paper.
Section 1.05 Fiscal Year . The fiscal year of the Corporation will be determined by resolution of the Board of Directors.
ARTICLE 2 Capital Stock
Section 2.01 Consideration for Shares . The capital stock may be issued for such consideration, expressed in dollars, not less than the par value thereof, if any, as shall be fixed from time to time by the Board of Directors. Treasury shares may be disposed of by the Corporation for such consideration expressed in dollars as may be fixed from time to time by the Board of Directors.
Section 2.02 Payment for Shares . The consideration for the issuance of shares may be paid, in whole or in part, in cash, labor or services actually performed or personal property, or real estate or leases thereof; the term "personal property" may include the legally enforceable obligation of a subscriber to pay the balance of a subscription for the issuance of shares. Any shares issued shall be considered to be fully paid and nonassessable if (a) the entire amount, or (b) not less than the amount characterized as capital pursuant to NRS Section 78.270 accompanied by the legally enforceable obligation of the subscriber to pay the balance of the subscription has been received by the Corporation. The judgment of the Board of Directors as to the value of the consideration received for shares shall be conclusive as to all except the then existing-shareholders for whom it shall be conclusive in the absence of actual fraud in the transaction. No certificate shall be issued for any share until the share is fully paid.
Section 2.03 Certificates Representing Shares . Each holder of the capital stock of the Corporation is entitled to a certificate signed by the President or a Vice President, and the Secretary or an Assistant Secretary, certifying the number of shares owned by the shareholder in the Corporation.
Section 2.04 Transfer of Stock . The Corporation will register a transfer of a stock certificate presented to it for transfer if the following conditions have been fulfilled:
	(a) Endorsement . The certificate is properly endorsed by the registered shareholder or by the shareholder's duly authorized agent;
	(b) Witnessing . The endorsement or endorsements are witnessed by one witness unless this requirement is waived by the Secretary;
	(c) Adverse Claims . The Corporation has no notice of any adverse claims or has discharged any duty to inquire into any adverse claims; and
	(d) Collection of Taxes . There has been compliance with any applicable law relating to the collection of taxes.
ARTICLE 3 The Shareholders
Section 3.01 Place of Shareholder Meetings . Meetings of the shareholders of the Corporation shall be held at the principal business office of the Corporation, 241 Ridge Street, Reno, Washoe County, Nevada 89501, or such other place as may be designated by the Chairman, the President or the Board of Directors, or by the written consent of all shareholders entitled to vote at the meeting given either before or after the meeting and filed with the Secretary.
Section 3.02 Annual Shareholder Meeting . Unless a written consent of all of the shareholders entitled to vote at the annual meeting is filed with the Secretary .in lieu of an annual meeting, the annual shareholders' meeting shall be held at 10:00 o'clock a.m. in the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, on the fifteenth day of the third month following the end of the Corporation's fiscal year, if this day is not a legal holiday, and if a holiday, then on the first following day that is not a legal holiday. In the event the annual shareholder' s meeting is not held at such time and place, the Board of Directors, the Chairman of the Board of Directors, the President or shareholders holding not less that one-tenth of all the shares entitled to vote at the meeting may call the annum meeting of the shareholders. The failure to hold the annual meeting or to file the written consent in lieu thereof will not cause a forfeiture or dissolution of the Corporation.
Section 3.03 Special Shareholder Meetings . Special shareholders' meetings may be called by the Board of Directors, the Chairman, the President or shareholders holding not less than one-tenth of all the shares entitled to vote at the meeting.
Section 3.04 Notice of Shareholder Meetings - Waiver . Written notice stating the place, day and hour of a shareholders' meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered not less than ten (10) days, nor more than fifty (50) days before the date of the meeting, either personally, or by mail, or by other means of written communication, charges prepaid, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each registered shareholder entitled to vote at the meeting. If mailed, the notice shall be considered to be delivered when deposited in the United States mail addressed to the shareholder at the shareholder's address as it appears on the stock transfer books of the Corporation, with postage prepaid. If a shareholder gives no address, notice shall be deemed to have been given to the shareholder if sent by mail or other written communication addressed to the place where the Corporation's principal office is located, or if published at least once in some newspaper of general circulation in the county in which the Corporation's principal office is located. Waiver by a shareholder in writing of notice of a meeting, is equivalent to giving notice. Attendance by a shareholder, without objection to the notice, whether in person or by proxy, at a meeting is a waiver of notice of the meeting.
Section 3.05 Shareholder Quorum . A majority of the shares entitled to vote, represented in person or by proxy, is a quorum at a shareholders' meeting. The shareholders present at a duly organized meeting may continue to do businesses until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
Section 3.06 Adjourned Shareholder Meetings and Notice Thereof . Any shareholders' meeting, whether annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy, but in the absence of a quorum no other business may be transacted at any shareholders' meeting.
When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. As to any adjournment of less than thirty (30) days, it shall not be necessary to give any notice or the time and place of the adjourned meeting or of the business to be transacted, other than by announcement at the meeting at which the adjournment is taken.
Section 3.07 Entry of Notice . An entry in the minutes of any meeting of shareholders, whether annual or special, to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the meeting was given to all shareholders as required by law and these Bylaws.
Section 3.08 Voting . Except as otherwise provided by law, only persons in whose names shares entitled to vote stand on the stock registry of the Corporation on the day three (3) days prior to any shareholders' meeting, or, if a record date for voting purposes is fixed as provided in Article 6, Section 6.01, of these Bylaws, then on that record date, shall be entitled to vote at the meeting. Voting may be viva vote or by ballot; provided, however, that all elections for Directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Except as otherwise provided by an express provision of the Articles of Incorporation or by an express provision of law, each full share is entitled to one vote and, when a quorum is present at the commencement of any shareholders' meeting, the vote of the holders of a majority of the shares entitled to vote present, in person or by proxy, shall decide any question brought before the shareholders' meeting. Fractional shares shall not be entitled to any voting rights whatsoever.
Section 3.09 Consent of Absentees . The transactions of any shareholders' meeting, either annual or special and however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes thereof, all such waivers, consents or approvals shall be filed with the Secretary or be made a part of the minutes of the meeting.
Section 3.10 Action or Ratification of Action Without Meeting . Any action which, under applicable provisions of law, may be taken or ratified at a meeting of the shareholders, may be taken or ratified without a meeting if authorized in writing by shareholders holding the percentage of the voting power required by law for taking the action by written consent and the written consent is fried with the Secretary.
Section 3.11 Proxies . Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by the person or by the person's duly authorized agent and filed with the Secretary of the Corporation; provided that no proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless the person executing it specified therein the length of time for which the proxy is to continue in force, which in no event shall exceed seven (7) years from the date of its execution.
Section 3.12 Definition of "Shareholder" . As used in these Bylaws, the term "shareholder", and any term of like import, shall include all persons entitled to vote the shares held by a shareholder, unless the context in which the term is used indicates that a different meaning is intended.
ARTICLE 4 The Board of Directors
Section 4.01 Number of Directors . The Board of Directors of the Corporation shall consist of five (5) members. The members of the Board of Directors need not be shareholders. The number of members of the Board of Directors may be increased or decreased from time to time as provided in Section 4.02 below.
Section 4.02 Increase or Decrease of Directors . The number of Directors of the Corporation may be increased or decreased from time to time, at a meeting of the shareholders or by the filing of a written consent, by the affirmative vote of a majority of the issued and outstanding shares of stock of the Corporation. This section of the Bylaws may be amended only by the affirmative vote, at a meeting of the shareholders, of a majority or the issued and outstanding shares of stock of the Corporation.
Section 4.03 Election . Members of the initial Board of Directors shall hold office until the first annual shareholders' meeting or until their successors shall have been elected and qualified. At the first annual shareholder's meeting. and at each annual meeting thereafter, or by a written consent field in lieu of an annual meeting, the shareholders shall elect Directors to hold office until the time for the next succeeding annual meeting. If any annual shareholders' meeting is not held and a written consent in lieu of an annual meeting is not filed, or the Directors are not elected, the Directors may be elected at any special shareholders' meeting held for that purpose or by the filing of a special written consent. Each Director shall hold office for the term for which the Director is elected or until the Director's successor shall be elected and qualified.
Section 4.04 Vacancies . Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors was present, or by a sole remaining Director. A Director elected to fill a vacancy shall be elected for the unexpired term of the Director's predecessor in office.
A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any Director or Directors are elected to elect the full authorized number of Directors to be voted for at that meeting, or if a vacancy is declared by the Board of Directors for any reason permitted by law.
The shareholders may elect a Director or Directors at any time to fill any vacancy or vacancies not filled by the Directors. If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board or the shareholders shall have power to elect a successor to take, office when the resignation is to become effective.
No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of the Director's term of office.
Section 4.05 Place of Meetings . Immediately after the annual meeting of the shareholders, at the same place as the meeting of the shareholders, the Board of Directors shall meet each year for the purpose of organization, election of officers, and consideration of any other business that may properly be brought before the meeting. No notice of any kind to either old or new members of the Board of Directors for this annual meeting shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.07.
Section 4.06 Regular Meetings . Regular meetings of the Board of Directors shall be held at the times and places within or without the State of Nevada as may be designated from time to time by resolution of the Board or by written consent of all members of the Board. No notice of any kind to members of the Board for these regular meetings shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.07.
Section 4.07 Other Meetings . Other meetings of the Board of Directors for any purpose or purposes may be held at any time upon call by the President or, if the President is absent or unable or refuses to act, by any Vice President or by any two (2) Directors. The other meetings may be held at any place within or without the State of Nevada as may be designated from time to time by resolution of the Board of Directors or by written consent of all Directors.
Written notice of the time and place of other meetings shall be delivered personally to each Director or sent to each Director by mail or other form of written communication, charged prepaid, addressed to the Director at the Director's address as it is shown upon the records of the Corporation or, if it is not so shown on the Corporation's records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case the notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the place in which the principal office if the Corporation is located at least seventy-two (72) hours prior to the time of the holding of the meeting. In case the notice is delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. The mailing, telegraphing or delivery as above provided shall constitute due, legal and personal notice to the Director.
Section 4.08 Notice of Adjourned Meetings . Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place be fixed at the meeting adjourned.
Section 4.09 Entry of Notice . An entry in the minutes of any special meeting of the Board of Directors to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the special meeting was given to all Directors as required by law and by these Bylaws.
Section 4.10 Waiver of Notice . The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the Directors not present signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 4.11 Quorum . A majority of the authorized number of Directors, or, in the event that a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a majority of the exact authorized number of Directors, shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number be required by law or by the Articles of Incorporation. If the number of Directors pursuant to the Articles of Incorporation is one or two, the unanimous consent of said Directors shall be necessary for Board of Directors' action.
Section 4.12 Adjournment . A quorum of the Directors may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board.
Section 4.13 Action Without Meeting . Any action required or permitted to be taken by the Board of Directors under the Articles of Incorporation, these Bylaws, or under applicable law, may be taken without a meeting if all members of the Board of Directors shall individually or collectively consent, in writing, to the action. Any action by written consent shall have the same force and effect as a unanimous vote of all Directors. All written consents must be fried with the Secretary.
Section 4.14 Fees and Compensation . Directors shall not receive any stated salary for their services as Directors or as members of committees, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed to Directors for the Director's services. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor.
Section 4.15 Indemnification of Directors and Officers .
(a)The Corporation shall indemnify any person who was or is a party or is threatened .to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid or owed in settlement actually and reasonably paid or incurred by the person or rendered or levied against the person in connection with such action, suit or proceeding-if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for misfeasance or nonfeasance in the performance of the person's duty to the Corporation unless and only to the extent that, despite the adjudication of liability but in view of all circumstances of the case, such person fairly and equitably merits indemnification.
(c) To the extent that a person who may be entitled to indemnification by the Corporation under this section is or has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection therewith.
(d) Any indemnification under subsections (a) and (b) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsection (a) or (b). Such determination-shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs, by either independent legal counsel in a written opinion, or the stockholders, or (iii) if required by law, by the court in which such action, suit or proceeding was brought or another court of competent jurisdiction.
(e) Expenses incurred in defending a civil or criminal action, suit or proceeding may-be paid by the Corporation in advance of the final disposition of such action, suit or proceeding if such payment is authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Corporation as authorized in this section.
(f) The indemnification provided by this section shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person.
(g) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's stares as such, whether or not the Corporation would have the power to indemnify the person against such liability under the provisions of this section.
(h) For the purposes of this section, references to "the Corporation" include all constituent corporations absorbed .in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity.
(i) The provisions of this section shah apply to the estate, executors, administrators, heirs, legatees or devisees of a person entitled to indemnification hereunder and the term "person," where used in the section shah include the estate, executors, administrators, heirs, legatees or devisees of such person.
Section 4.16 Powers of Directors . Subject to limitations of the Articles of Incorporation, of these Bylaws, and of applicable law as to action to be authorized or approved by the shareholders and subject to the duties of Directors as prescribed by these Bylaws, all corporate powers shah be exercised by or under the authority of, and the business and affairs of the Corporation shah be controlled by, the Board of Directors. Without prejudice to these general powers, but subject to the same limitations, it is hereby expressly declared that the Directors shall have the following powers:
First: To select and remove all officers, agents and employees of the Corporation, to delegate the power to remove any or all officers, agents and employees of the Corporation to an officer or officer, prescribe such powers and duties for them as may not be inconsistent with law, with the Articles of Incorporation or the Bylaws, fix their compensation, and require from them security for faithful service.
Second: To conduct, manage and control the affairs and business of the Corporation and to make such rules and regulations therefor not inconsistent with law, with the Articles of Incorporation or these Bylaws, as they may deem best.
Third: To change the principal office of the Corporation from one location to another within the same county as provided in Article 1, Section 1.02, hereof; to fix and locate from time to time one or more subsidiary offices of the Corporation, within or without the State of Nevada as provided in Article 1, Section 1.03, hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of the seal and of the certificates from time to time, as in their judgment they may deem best, provided the seal and the certificates shall at all times comply with the provisions of law.
Fourth: To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor.
Fifth: To authorize the issue of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, tangible or intangible property actually received or such other consideration as may be authorized by law.
Sixth: To adopt and administer, or provide for the administration of, employee stock purchase plans, employee stock option plans and any other plans or arrangements whereby Directors, officers, employees or agents of the Corporation or any other entity may be entitled to acquire authorized but unissued or treasury stock or other securities of the Corporation, upon such terms and conditions as may from time to time be permitted by law.
Seventh: To appoint an Executive Committee and other committees, and to delegate to the Executive Committee any of the powers and authority of the Board in the management of the business and affairs of the Corporation except the power to declare dividends and to adopt, amend or repeal Bylaws. The Board of Directors shall have the power to prescribe the manner in which proceedings of the Executive Committee and other committees shall be conducted. The committees shall keep regular minutes of their meetings and report the same to the Board when required. The Executive Committee must be composed of two (2) or more Directors.
Eighth: To lend money in furtherance of any of the purposes of the Corporation; to invest the funds of the Corporation from time to time; and to take and hold any property as security for the payment of funds so loaned or invested.
Ninth: To lend money to employees, officers and Directors, and to otherwise assist employees, officers and Directors. Loans to members of the Board of Directors shall be made only upon the approval of a majority of the Board of Directors excluding the Director to whom the loan is to be made.
Tenth: To declare dividends upon the capital stock of the Corporation in cash, in property, or in shares of the capital stock, subject to the limitation of the Articles of Incorporation and of applicable law. Before payment of any dividend, there may be set aside out of the funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interests of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE 5 The Officers
Section 5.01 Officers . The officers of the Corporation shall be a President, a Secretary and a Treasurer, and each of them shall be appointed by the Board of Directors. The Corporation may also have such other executive officers, including one (1) or more Vice Presidents, one (1) or more Assistant Secretaries and one (1) or more Assistant Treasurers, and other subordinate officers as may be appointed in accordance with the provisions of Section 5.03 of this Article 5. Officers need not be Directors. One person may hold two (2) or more offices, except those of President and Vice President. However, if the Corporation only has one shareholder, then one person may hold the offices of both President and Vice President.
Section 5.02 Election . The officers of the Corporation, except those officers as may be appointed in accordance with the provisions of Section 5.03 or Section 5.05 of this Article, shall be chosen annually by the Board of Directors, and each shall hold office until the officer shall resign or shall be removed or otherwise disqualified to serve, or the officer's successor shall be elected and qualified; provided that officers may be appointed at any time by the Board of Directors, or, as permitted by Section 5.03 of this Article, by the President, for the purpose of initially filling an office or filling a newly created or vacant office.
Section 5.03 Subordinate Officers . The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the Corporation may require, each of whom shall hold office for the term, have the authority and perform the duties as are provided in these Bylaws or as the Board of Directors may from time to time determine.
Section 5.04 Removal and Resignation . Any officer may, subject to any contractual arrangements between the officer and the Corporation, be removed, either with or without cause, by a majority of the Directors in office at the time, at any regular or special meeting of the Board, or by any officer upon whom the power of removal may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the Board of Directors, to the President, or to the Secretary of the Corporation. Any resignation shall take effect at the date of the receipt of the notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective.
Section 5.05 Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to that office.
Section 5.06 President . Subject to the control of the Board of Directors, the President shall have general supervision, direction and control of the business and officers of the Corporation. In the absence of a Chairman of the Board, the President shall preside at all meetings of the shareholders and at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing committees, including the Executive Committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a Corporation, and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.
Section 5.07 Vice Presidents . In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other powers and perform such other duties as may be prescribed for them respectively by the Board of Directors, the President, or these Bylaws.
Section 5.08 Secretary . The Secretary shall keep or cause to be kept; at the principal office or such other place as the Board of Directors may order, a book of minutes of all meetings of Directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof.
The Secretary shall keep or cause to be kept, in any form permitted by law, at the principal office or at the office of the Corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for shares, and the number and date of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board of Directors required by these Bylaws or by law to be given, and shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws.
Section 5.09 Treasurer . The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any Director.
The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and Directors, whenever they request it, an account of all transactions as Treasurer and of the financial condition of the Corporation, and shah have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shah be satisfactory to the Board of Directors for the faithful performance of the duties of office of Treasurer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation.
Section 5.10 Corporate Bank Accounts . Bank accounts in the name of the Corporation may be opened without the approval of the Board of Directors if opened with the consent of the President and the Treasurer of the Corporation. The Treasurer shall inform the Board of Directors of any bank account opened by the Corporation pursuant to the authority granted in this section at the next meeting of the Board of Directors.
Section 5.11 Transfers of Authority . In case of the absence of any officer of the Corporation, or for any reason that the Board of Directors may consider sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer or to any Director or employee of the Corporation, provided a majority of the full Board of Directors concurs.
ARTICLE 6 Miscellaneous
Section 6.01 Record Date and Closing Stock Books . The Board of Directors may fix a time in the future, as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders, or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall not be more than sixty (60) days prior to the date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record on that date shall be entitled to notice of and to vote at the meeting, or to receive the dividend, distribution or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. The Board of Directors may close the books of the Corporation against transfers of shares during the whole or any part of any the sixty (60) day period.
Section 6.02 Inspection of Corporate Records . The share register or duplicate share register shall be open to inspection upon at least five (5) days written demand of any shareholder who has been as shareholder for at least six months preceding his demand or .any person holding, or authorized in writing by the holders of, at least five percent (5%) of all of the Corporation's outstanding shares, at any reasonable time. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection is not desired for any purpose which is in the interest of a business or object other than the business of the Corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose.
Unless the Corporation furnishes a detailed annual financial statement, the books of account and all financial records of the Corporation shall be open to inspection upon at least five (5) days written demand of any stockholder of record and who owns not less than fifteen percent (15%) of all of the Corporation's issued and outstanding shares, at any reasonable time, and shah include the right to audit the same. The stockholder shah pay, in advance, for the cost for making extracts and conducting an audit. At the time of making the demand, .the person. demanding the inspection must provide the Corporation with an affidavit that such inspection, extracts or audit is not desired for any purpose not related to his interest in the Corporation as a stockholder.
Any inspection may be made in person or by an agent or attorney, and shah include the right to make extracts. Demand for any inspection shah be made in writing upon the President of the Corporation.
Section 6.03 Checks, Drafts, etc . All checks, drafts, bonds, bills of exchange, or other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors.
Section 6.04 Contracts, etc., How Executed . The Board of Directors, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument or document in the name of and on behalf of the Corporation, and the authority may be general or confined to specific instances. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust, mortgages and corporate instruments or documents requiring the corporate seal, and certificates for shares of stock owned by the Corporation shall be executed, signed or endorsed by the President or any Vice President and by the Secretary (or any Assistant Secretary) or the Treasurer (or any Assistant Treasurer). The Board of Directors may, however, authorize any one (1) of these officers to sign any of such instruments, for and on behalf of the Corporation, without necessity of countersignature; may designate officers or employees of the Corporation, other than those named above, who may, in the name of the Corporation, sign such instruments; and may authorize the use of facsimile signatures or any of such persons. No officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit to render it liable for any purpose or to any amount except as specifically authorized in these Bylaws or by the Board of Directors in accordance with these Bylaws.
Section 6.05 Certificates of Stock . A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares are fully paid up. All certificates shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and Secretary or by a facsimile of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Before it becomes effective, every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust company, either domestic or foreign, as registrar of transfers, as required or permitted by law.
In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any certificate or certificates shall cease to be an officer or officers of the Corporation, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of the Corporation.
Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or these Bylaws may provide; provided, however, that any certificate so issued prior to full payment shall state the amount remaining unpaid and the terms of payment thereof.
Section 6.06 Lost Certificates of Stock . The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates, or the shareholder's legal representative, to advertise the same in any manner as it shall require or give the Corporation a bond in any sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed, or both.
Section 6.07 Representation of Shares of Other Corporations . The President or any Vice President and the Secretary or any Assistant Secretary of this Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to these officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other corporation or corporations may be exercised either by these officers in person or by any persons authorized so to do by proxy or power of attorney duly executed by these officers.
Section 6.08 Inspection of Bylaws . The Corporation shall keep in its principal business office the original or a copy of the Bylaws as amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours.
ARTICLE 7 Amendments
Section 7.01 Power of Shareholders . New Bylaws may be adopted or these Bylaws may be amended or repealed by the vote or written assent of shareholders entitled to exercise a majority of the voting power of the Corporation, unless a greater number is required by law, by the Articles of Incorporation or by these Bylaws.
Section 7.02 Power of Directors . Subject to the right of shareholders as provided in Section 7.01 of this Article 7 to adopt, amend or repeal Bylaws, Bylaws may be adopted, amended, or repealed by the Board of Directors; provided, however, that a Bylaw or amendment thereof changing the authorized number of Directors may be adopted, amended or repealed only by the shareholders, except that if a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a Bylaw or amendment thereof fixing the exact number of Directors within the limits specified in the Articles of Incorporation or these Bylaws may be adopted, amended or repealed by the Board of Directors.
I, the undersigned, being the Secretary of POTOMAC NEVADA CORPORATION, do hereby certify the foregoing to be the Bylaws of said corporation, as adopted at a meeting of the Board of Directors held on the 12 ^th day of November, 1992.
		WILLIAM DANA SHAPIRO Secretary of the Corporation

ARTICLES OF INCORPORATION OF POTOMAC NEVADA LEASING CORPORATION, a Nevada Corporation
The undersigned natural person acting as an incorporator of a corporation under Chapter 78 of the Nevada Revised Statutes adopts the following articles of incorporation:
ARTICLE I
The name of the Corporation is POTOMAC NEVADA LEASING CORPORATION, a Nevada corporation (the "Corporation").
ARTICLE II
The address and location of the principal office of the Corporation in the State of Nevada is 241 Ridge Street, Reno, Washoe County, Nevada 89501.
ARTICLE III
The name and address of the resident agent for the Corporation in the State of Nevada is Sierra Corporate Services, 241 Ridge Street, Fourth Floor, Reno, Nevada 89501.
ARTICLE IV
The purpose for which the Corporation is formed is to engage in any lawful activity.
ARTICLE V
Section 1. The Corporation shall be authorized to issue 2,500 shares of capital stock with par value of ONE DOLLAR ($1.00) per share. Section 2. All of the shares of stock shall be of the same class, without preference or distinction. Section 3. The capital stock of the Corporation, after the amount of capital has been paid in money, property or services, as the board of directors shall determine, shall not be subject to assessment to pay the debts of the Corporation, nor for any other purpose, and no stock issued as fully paid shall ever be assessable or assessed and the articles of incorporation shall not be amended in this respect. Section 4. Cumulative voting by any shareholder is denied. Section 5. No shareholder shall, by reason of holding shares of any class of stock, have any preemptive or preferential right to purchase or subscribe for any shares of any class of stock now or hereafter authorized or any notes, debentures or bonds convertible into or carrying options or warrants to purchase shares of any class of stock now or hereafter authorized, whether or not the issuance of any shares, notes, debentures or bonds would adversely affect the dividend or voting rights of the shareholder.
ARTICLE VI
The period of existence of the Corporation is perpetual.
ARTICLE VII
The name and post office address of the incorporator is Robert E. Armstrong, P. O. Box 2670, Reno, Nevada 89505.
ARTICLE VIII
The member of the governing board of the Corporation shall be designated as "director". The board of directors shall consist of one (1) member. The number of directors of the Corporation may be increased or decreased from time to time as provided in the bylaws of the Corporation. The names and addresses of the member of the initial board of director who shall serve as director until his successor shall have been elected and qualified is as follows: NAME ADDRESS Jon Sharp The Nook 91 Palmerston Road Earlsdown, Coventry, England CV56FH
ARTICLE IX
In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by Chapter 78 of the Nevada Revised Statutes or other statutes or laws of the State of Nevada, the board of directors is expressly authorized: (i) to make, amend, alter, or repeal the bylaws of the Corporation; (ii) to adopt from time to time bylaw provisions with respect to indemnification or directors, officers, employees, agents and other persons as it shall deem expedient and in the best interests of the Corporation and to the extent permitted by law; and (iii) to fix and determine designations, preferences, privileges, rights and powers and relative, participating, optional or other special rights, qualifications, limitations or restrictions on the capital stock of the Corporation as provided by Nev. Rev. Stat. Section 78.195, unless otherwise provided herein.
ARTICLE X
To the extent specified from time to time by the board of directors, no officer or director of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as an officer or director, excepting only (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of dividends in violation of Nev. Rev. Stat. Section 78.300. No amendment or repeal of this Article X applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and these Articles of Incorporation this 23 ^rd day of December, 1992.
	/s/ Robert E. Armstrong Robert E. Armstrong
STATE OF NEVADA ) ) ss. COUNTY OF WASHOE ) On this 23 ^rd day of December, 1992, personally a the undersigned, a Notary Public, in and for the County of Washoe, State of Nevada, Robert B. Armstrong, known to me to be the person described in and who executed the foregoing instrument freely and voluntarily and for the uses and purposes mentioned. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
	/s/ Teresa W. Stovak NOTARY PUBLIC TERESA W. STOVAK Notary Public-State of Nevada Appointment Recorded In Washoe County MY APPOINTMENT EXPIRES APR. 7, 1994

BYLAWS OF POTOMAC NEVADA LEASING CORPORATION ARTICLE 1 Identification
Section 1.01. Name . The name of the Corporation is POTOMAC NEVADA LEASING CORPORATION. Section 1.02. Resident Office and Resident Agent. The address of the resident office of the Corporation is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501; and the name of the resident agent at this address is SIERRA CORPORATE SERVICES. Section 1.03. Other Offices. Branch or subordinate offices may be established by the Board of Directors. Section 1.04. Seal. The seal of the Corporation will be circular in form and mounted upon a metal die, suitable for impressing the same upon paper. Section 1.05. Fiscal Year . The fiscal year of the Corporation will be determined by resolution of the Board of Directors.
ARTICLE 2 Capital Stock
Section 2.01. Consideration for Shares. The capital stock may be issued for such consideration, expressed in dollars, not less than the par value thereof, if any, as shall be fixed from time to time by the Board of Directors. Treasury shares may be disposed of by the Corporation for such consideration expressed in dollars as may be fixed from time to time by the Board of Directors. Section 2.02. Payment for Shares. The consideration for the issuance of shares may be paid, in whole or in part, in cash, labor or services actually performed or personal property, or real estate or leases thereof; the term "personal property" may include the legally enforceable obligation of a subscriber to pay the balance of a subscription for the issuance of shares. Any shares issued shall be considered to be fully paid and non-assessable if (a) the entire amount, or (b) not less than the amount characterized as capital pursuant to NRS Section 78.270 accompanied by the legally enforceable obligation of the subscriber to pay the balance of the subscription has been received by the Corporation. The judgment of the Board of Directors as to the value of the consideration received for shares shall be conclusive as to all except the then existing shareholders for whom it shall be conclusive in the absence of actual fraud in the transaction. No certificate shall be issued for any share until the share is fully paid. Section 2.03. Certificates Representing Shares. Each holder of the capital stock of the Corporation is entitled to a certificate signed by the President or a Vice President, and the Secretary or an Assistant Secretary, certifying the number of shares owned by the shareholder in the Corporation. Section 2.04. Transfer of Stock. The Corporation will register a transfer of a stock certificate presented to it for transfer if the following conditions have been fulfilled: (a) Endorsement. The certificate is properly endorsed by the registered shareholder or by the shareholder's duly authorized agent; (b) Witnessing. The endorsement or endorsements are witnessed by one witness unless this requirement is waived by the Secretary; (c) Adverse Claims. The Corporation has no notice of any adverse claims or has discharged any duty to inquire into any adverse claims; and (d) Collation of Taxes. There has been compliance with any applicable law relating to the collection of taxes.
ARTICLE 3 The Shareholders
Section 3.01. Place of Shareholder Meetings. Meetings of the shareholders of the Corporation shall be held at the principal business office of the Corporation, 241 Ridge Street, Reno, Washoe County, Nevada 89501, or such other place as may be designated by the Chairman, the President or the Board of Directors, or by the written consent of all shareholders entitled to vote at the meeting given either before or after the meeting and filed with the Secretary. Section 3.02. Annual Shareholder Meeting. Unless a written consent of all of the shareholders entitled to vote at the annual meeting is filed with the Secretary in lieu of an annual meeting, the annual shareholders' meeting shall be held at 10:00 o'clock a.m. in the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, on the fifteenth day of the third month following the end of the Corporation's fiscal year, if this day is not a legal holiday, and if a holiday, then on the first following day that is not a legal holiday. In the event the annual shareholder's meeting is not held at such time and place, the Board of Directors, the Chairman of the Board of Directors, the President or shareholders holding not less that one-tenth of all the shares entitled to vote at the meeting may call the annual meeting of the shareholders. The failure to hold the annual meeting or to file the written consent in lieu thereof will not cause a forfeiture or dissolution of the Corporation. Section 3.03. Special Shareholder Meetings. Special shareholders' meetings may be called by the Board of Directors, the Chairman, the President or shareholders holding not less than one-tenth of all the shares entitled to vote at the meeting. Section 3.04. Notice of Shareholder Meetings --Waiver. Written notice stating the place, day and hour of a shareholders' meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered not less than ten (10) days, nor more than fifty (50) days before the date of the meeting, either personally, or by mail, or by other means of written communication, charges prepaid, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each registered shareholder entitled to vote at the meeting. If mailed, the notice shall be considered to be delivered when deposited in the United States mail addressed to the shareholder at the shareholder's address as it appears on the stock transfer books of the Corporation, with postage prepaid. If a shareholder gives no address, notice shall be deemed to have been given to the shareholder if sent by mail or other written communication addressed to the place where the Corporation's principal office is located, or if published at least once in some newspaper of general circulation in the county in which the Corporation's principal office is located. Waiver by a shareholder in writing of notice of a meeting, is equivalent to giving notice. Attendance by a shareholder, without objection to the notice, whether in person or by proxy, at a meeting is a waiver of notice of the meeting. Section 3.05. Shareholder Quorum. A majority of the shares entitled to vote, represented in person or by proxy, is a quorum at a shareholders' meeting. The shareholders present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 3.06. Adjourned Shareholder Meetings and Notice Thereof. Any shareholders' meeting, whether annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy, but in the absence of a quorum no other business may be transacted at any shareholders' meeting. When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. As to any adjournment of less than thirty (30) days, it shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted, other than by announcement at the, meeting at which the adjournment is taken. Section 3.07. Entry of Notice. An entry in the minutes of any meeting of shareholders, whether annual or special, to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the meeting was given to all shareholders as required by law and these Bylaws. Section 3.08. Voting. Except as otherwise provided by law, only persons in whose names shares entitled to vote stand on the stock registry of the Corporation on the day three (3) days prior to any shareholders' meeting, or, if a record date for voting purposes is fixed as provided in Article 6, Section 6.01, of these Bylaws, then on that record date, shall be entitled to vote at the meeting. Voting may be viva voce or by ballot; provided, however, that all elections for Directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Except as otherwise provided by an express provision of the Articles of Incorporation or by an express provision of law, each full share is entitled to one vote and, when a quorum is present at the commencement of any shareholders' meeting, the vote of the holders of a majority of the shares entitled to vote present, in person or by proxy, shall decide any question brought before the shareholders' meeting. Fractional shares shall not be entitled to any voting rights whatsoever. Section 3.09. Consent of Absentees. The transactions of any shareholders' meeting, either annual or special and however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes thereof, all such waivers, consents or approvals shall be filed with the Secretary or be made a part of the minutes of the meeting. Section 3.10. Action or Ratification of Action Without Meeting. Any action which, under applicable provisions of law, may be taken or ratified at a meeting of the shareholders, may be taken or ratified without a meeting if authorized in writing by shareholders holding the percentage of the voting power required by law for taking the action by written consent and the written consent is filed with the Secretary. Section 3.11. Proxies. Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by the person or by the person's duly authorized agent and filed with the Secretary of the Corporation; provided that no proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless the person executing it specified therein the length of time for which the proxy is to continue in force, which in no event shall exceed seven (7) years from the date of its execution. Section 3.12. Definition of "Shareholder". As used in these Bylaws, the term "shareholder", and any term of like import, shall include all persons entitled to vote the shares held by a shareholder, unless the context in which the term is used indicates that a different meaning is intended.
ARTICLE 4 The Board of Directors
Section 4.01. Number of Directors. The Board of Directors of the Corporation shall consist of five (5) members. The members of the Board of Directors need not be shareholders. The number of members of the Board of Directors may be increased or decreased from time to time as provided in Section 4.02 below. Section 4.02. Increase or Decrease of Directors. The number of Directors of the Corporation may be increased or decreased from time to time, at a meeting of the shareholders or by the filing of a written consent, by the affirmative vote of a majority of the issued and outstanding shares of stock of the Corporation. This section of the Bylaws may be amended only by the affirmative vote, at a meeting of the shareholders, of a majority of the issued and outstanding shares of stock of the Corporation. Section 4.03. Election. Members of the initial Board of Directors shall hold office until the first annual shareholders' meeting or until their successors shall have been elected and qualified. At the first annual shareholder's meeting and at each annual meeting thereafter, or by a written consent filed in lieu of an annual meeting, the shareholders shall elect Directors to hold office until the time for the next succeeding annual meeting. If any annual shareholders meeting is not held and a written consent in lieu of an annual meeting is not filed, or the Directors are not elected, the Directors may be elected at any special shareholders' meeting held for that purpose or by the filing of a special written consent. Each Director shall hold office for the term for which the Director is elected or until the Director's successor shall be elected and qualified. Section 4.04. Vacancies. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining. Directors though less than a quorum of the Board of Directors was present, or by a sole remaining Director. A Director elected to fill a vacancy shall be elected for the unexpired term of the Director's predecessor in office. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any Director or Directors are elected to elect the full authorized number of Directors to be voted for at that meeting, or if a vacancy is declared by the Board of Directors for any reason permitted by law. The shareholders may elect a Director or Directors at any time to fill any vacancy or vacancies not filed by the Directors. If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board or the shareholders shall have power to elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of the Director's term of office. Section 4.05. Place of Meetings. Immediately after the annual meeting of the shareholders, at the same place as the meeting of the shareholders, the Board of Directors shall meet each year for the purpose of organization, election of officers, and consideration of any other business that may properly be brought before the meeting. No notice of any kind to either old or new members of the Board of Directors for this annual meeting shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.07. Section 4.06. Regular Meetings. Regular meetings of the Board of Directors shall be held at the times and places within or without the State of Nevada as may be designated from time to time by resolution of the Board or by written consent of all members of the Board. No notice of any kind to members of the Board for these regular meetings shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.07. Section 4.07. Other Meetings. Other meetings of the Board of Directors for any purpose or purposes may be held at any time upon call by the President or, if the President is absent or unable or refuses to act, by any Vice President or by any two (2) Directors. The other meetings may be held at any place, within or without the State of Nevada as may be designated from time to time by resolution of the Board of Directors or by written consent of all Directors. Written notice of the time and place of other meetings shall be delivered personally to each Director or sent to each Director by mail or other form of written communication, charged prepaid, addressed to the Director at the Director's address as it is shown upon the records of the Corporation or, if it is not so shown on the Corporation's records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case the notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the place in which the principal office of the Corporation is located at least seventy-two (72) hours prior to the time of the holding of the meeting. In case the notice is delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. The mailing, telegraphing or delivery as above provided shall constitute due, legal and personal notice to the Director. Section 4.08. Notice of Adjourned Meetings. Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place be fixed at the meeting adjourned. Section 4.09. Entry of Notice. An entry in the minutes of any special meeting of the Board of Directors to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the special meeting was given to all Directors as required by law and by these Bylaws. Section 4.10. Waiver of Notice. The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the Directors not present signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 4.11. Quorum. A majority of the authorized number of Directors, or, in the event that a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a majority of the exact authorized number of Directors, shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number be required by law or by the Articles of Incorporation. If the number of Directors pursuant to the Articles of Incorporation is one or two, the unanimous consent of said Directors shall be necessary for Board of Directors' action. Section 4.12. Adjournment. A quorum of the Directors may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board. Section 4.13. Action Without Meeting. Any action required or permitted to be taken by the Board of Directors under the Articles of Incorporation, these Bylaws, or under applicable law, may be taken without a meeting if all members of the Board of Directors shall individually or collectively consent, in writing, to the action. Any action by written consent shall have the same force and effect as a unanimous vote of all Directors. All written consents must be filed with the Secretary. Section 4.14. Fees and Compensation. Directors shall not receive any stated salary for their services as Directors or as members of committees, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed to Directors for the Director's services. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor. Section 4.15. Indemnification of Directors and Officers. (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid or owed in settlement actually and reasonably paid or incurred by the person or rendered or levied against the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided, however, that no identification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for misfeasance or nonfeasance in the performance of the person's duty to the Corporation unless and only to the extent that, despite the adjudication of liability but in view of all circumstances of the case, such person fairly and equitably merits indemnification. (c) To the extent that a person who may be entitled to indemnification by the Corporation under this section is or has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection therewith. (d) Any indemnification under subsections (a) and (b) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in .the circumstances because the person has met the applicable standard of conduct set forth in subsection (a) or (b). Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs, 'by either independent legal counsel in a written opinion, or the stockholders, or (iii) if required by law, by the court in which such action, suit or proceeding was brought or another court of competent jurisdiction. (e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding if such payment is authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Corporation as authorized in this section. (f) The indemnification provided by this section shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. (g) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the Corporation would have the power to indemnify the person against such liability under the provisions of this section. (h) For the purposes of this section, references to "the Corporation" include all Constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity. (i) The provisions of this section shall apply to the estate, executors, administrators, heirs, legatees or devisees of a person entitled to indemnification hereunder and the term "person," where used in the section shall include the estate, executors, administrators, heirs, legatees or devisees of such person. Section 4.16. Powers of Directors. Subject to limitations of the Articles of Incorporation, of these Bylaws, and of applicable law as to action to be authorized or approved by the shareholders and subject to the duties of Directors as prescribed by these Bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be controlled by, the Board of Directors. Without prejudice to these general powers, but subject to the same limitations, it is hereby expressly declared that the Directors shall have the following powers: First: To select and remove all officers, agents and employees of the Corporation, to delegate the power to remove any or all officers, agents and employees of the Corporation to an officer or officer, prescribe such powers and duties for them as may not be inconsistent with law, with the Articles of Incorporation or the Bylaws, fix their compensation, and require from them security for faithful service. Second: To conduct, manage and control the affairs and business of the Corporation and to make such rules and regulations therefor not inconsistent with law, with the Articles of Incorporation or these Bylaws, as they may deem best. Third: To change the principal office of the Corporation from one location to another within the same county as provided in Article 1, Section 1.02, hereof; to fix and locate-from time to time one or more subsidiary offices of the Corporation, within or without the State of Nevada as provided in Article 1, Section 1.03, hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of the seal and of the certificates from time to time, as in their judgment they may deem best, provided the seal and the certificates shall at all times comply with the provisions of law. Fourth: To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor. Fifth: To authorize the issue of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, tangible or intangible property actually received or such other consideration as may be authorized by law. Sixth: To adopt and administer, or provide for the administration of, employee stock purchase plans, employee stock option plans and any other plans or arrangements whereby Directors, officers, employees or agents of the Corporation or any other entity may be entitled to acquire authorized but unissued or treasury stock or other securities of the Corporation, upon such terms and conditions as may from time to time be permitted by law. Seventh: To appoint an Executive Committee and other committees, and to delegate to the Executive Committee any of the powers and authority of the Board in the management of the business and affairs of the Corporation except the power to declare dividends and to adopt, amend or repeal Bylaws. The Board of Directors shall have the power to prescribe the manner in which proceedings of the Executive Committee and other committees shall be conducted. The committees shall keep regular minutes of their meetings and report the same to the Board when required. The Executive Committee must be composed of two (2) or more Directors. Eighth: To lend money in furtherance of any of the purposes of the Corporation; to invest the funds of the Corporation from time to time; and to take and hold any property as security for the payment of funds so loaned or invested. Ninth: To lend money to employees, officers and Directors, and to otherwise assist employees, officers and Directors. Loans to members of the Board of Directors shall be made only upon the approval of a majority of the Board of Directors excluding the Director to whom the loan is to be made. Tenth: To declare dividends upon the capital stock of the Corporation in cash, in property, or in shares of the capital stock, subject to the limitation of the Articles of Incorporation and of applicable law. Before payment of any dividend, there may be set aside out of the funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion; think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interests of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE 5 The Officers
Section 5.01. Officers. The officers of the Corporation shall be a President, a Secretary and a Treasurer, and each of them shall be appointed by the Board of Directors. The Corporation may also have such other executive officers, including one (1) or more Vice Presidents, one (1) or more Assistant Secretaries and one (1) or more Assistant Treasurers, and other subordinate officers as may be appointed in accordance with the provisions of Section 5.03 of this Article 5. Officers need not be Directors. One person may hold two (2) or more offices, except those of President and Vice President. However, if the Corporation only has one shareholder, then one person may hold the offices of both President and Vice President. Section 5.02. Election. The officers of the Corporation, except those officers as may be appointed in accordance with the provisions of Section 5.03 or Section 5.05 of this Article, shall be chosen annually by the Board of Directors, and each shall hold office until the officer shall resign or shall be removed or otherwise disqualified to serve, or the officer's successor shall be elected and qualified; provided that officers may be appointed at any time by the Board of Directors, or, as permitted by Section 5.03 of this Article, by the President, for the purpose of initially filling an Office or filling a newly created or vacant office. Section 5.03. Subordinate Officers. The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the Corporation may require, each of whom shall hold office for the term, have the authority and perform the duties as are provided in these Bylaws or as the Board of Directors may from time to time determine. Section 5.04. Removal and Resignation. Any officer may, subject to any contractual arrangements between the officer and the Corporation, be removed, either with or without cause, by a majority of the Directors in office at the time, at any regular or special meeting of the Board, or by any officer upon whom the power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving written notice to the Board of Directors, to the President, or to the Secretary of the Corporation. Any resignation shall take effect at the date of the receipt of the notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 5.05. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to that office. Section 5.06. President. Subject to the control of the Board of Directors, the President shall have general supervision, direction and control of the business and officers of the Corporation. In the absence of a Chairman of the Board, the President shall preside at all meetings of the shareholders and at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing, committees, including the Executive Committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a Corporation, and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws. Section 5.07. Vice Presidents. In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other powers and perform such other duties as may be prescribed for them respectively by the Board of Directors, the President, or these Bylaws. Section 5.08. Secretary. The Secretary shall keep or cause to be kept, at the principal office or such other place as the Board of Directors may order, a book of minutes of all meetings of Directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof. The Secretary shall keep or cause to be kept, in any form permitted by law, at the principal office or at the office of the Corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for shares, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board of Directors required by these Bylaws or by law to be given, and shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. Section 5.09. Treasurer. The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any Director. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and Directors, whenever they request it, an account of all transactions as Treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of office of Treasurer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer' s possession or under the Treasurer' s control belonging to the Corporation. Section 5.10. Corporate Bank Accounts. Bank accounts in the name of the Corporation may be opened without the approval of the Board of Directors if opened with the consent of the President and the Treasurer of the Corporation. The Treasurer shall inform the Board of Directors of any bank account opened by the Corporation pursuant to the authority granted in this section at the next meeting of the Board of Directors. Section 5.11. Transfers of Authority. In case of the absence of any officer of the Corporation, or for any reason that the Board of Directors may consider sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer or to any Director or employee of the Corporation, provided a majority of the full Board of Directors concurs.
ARTICLE 6 Miscellaneous
Section 6.01. Record Date and Closing Stock Books. The Board of Directors may fix a time in the future, as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders, or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall not be more than sixty (60) days prior to the date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record on that date shall be entitled to notice of and to vote at the meeting, or to receive the dividend, distribution or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. The Board of Directors may close the books of the Corporation against transfers of shares during the whole or any part of the sixty (60) day period. Section 6.02. Inspection of Corporate Records. The share register or duplicate share register shall be open to inspection upon at least five (5) days written demand of any shareholder who has been a shareholder for at least six months preceding his demand or any person holding, or authorized in writing by the holders of, at least five percent (5 %) of all of the Corporation's outstanding shares, at any reasonable time. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection is not desired for any purpose which is in the interest of a business or object other than the business of the Corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose. Unless the Corporation furnishes a detailed annum financial statement, the books of account and all financial records of the Corporation shall be open to inspection upon at least five (5) days written demand of any stockholder of record and who owns not less than fifteen percent (15%) of all of the Corporation's issued and outstanding shares, at any reasonable time, and shall include the right to audit the same. The stockholder shall pay, in advance, for the cost for making extracts and conducting an audit. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection, extracts or audit is not desired for any purpose not related to his interest in the Corporation as a stockholder. Any inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand for any inspection shall be made in writing upon the President of the Corporation. Section 6.03. Checks, Drafts, etc. All checks, drafts, bonds, bills of exchange, or other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors. Section 6.04. Contracts, etc., How Executed. The Board of Directors, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument or document in the name of and on behalf of the Corporation, and the authority may be general or confined to specific instances. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust, mortgages and corporate instruments or documents requiring the corporate seal, and certificates for shares of stock owned by the Corporation shall be executed, signed or endorsed by the President or any Vice President and by the Secretary (or any Assistant Secretary) or the Treasurer (or any Assistant Treasurer). The Board of Directors may, however, authorize any one (1) of these officers to sign any of such instruments, for and on behalf of the Corporation, without necessity of countersignature; may designate officers or employees of the Corporation, other than those named above, who may, in the name of the Corporation, sign such instruments; and may authorize the use of facsimile signatures or any of such persons. No officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit to render it liable for any purpose or .to any amount except as specifically authorized in these Bylaws or by the Board of Directors in accordance with these Bylaws. Section 6.05. Certificates of Stock. A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares are fully paid up. All certificates shall be signed by the President or a Vice President, and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and Secretary or by a facsimile of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Before it becomes effective, every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust company, either domestic or foreign, as registrar of transfers, as required or permitted by law. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any certificate or certificates shall cease to be an officer or officers of the Corporation, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of the Corporation. Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or these Bylaws may provide; provided, however, that any certificate so issued prior to full payment shall state the amount remaining unpaid and the terms of payment thereof. Section 6.06. Lost Certificates of Stock. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates, or the shareholder's legal representative, to advertise the same in any manner as it shall require or give the Corporation a bend in any sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed, or both. Section 6.07. Representation of Shares of Other Corporations. The President or any Vice President and the Secretary or any Assistant Secretary of this Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to these officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other corporation or corporations may be exercised either by these officers in person or by any persons authorized so to do by proxy or power of attorney duly executed by these officers. Section 6.08. Inspection of Bylaws. The Corporation shall keep in its principal business office the original or a copy of the Bylaws as amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours.
ARTICLE 7 Amendments
Section 7.01. Power of Shareholders. New Bylaws may be adopted or these Bylaws may be amended or repealed by the vote or written assent of shareholders entitled to exercise a majority of the voting power of the Corporation, unless a greater number is required by law, by the Articles of Incorporation or by these Bylaws. Section 7.02. Power of Directors. Subject to the right of shareholders as provided in Section 7.01 of this Article 7 to adopt, amend or repeal Bylaws, Bylaws may be adopted, amended, or repealed by the Board of Directors; provided, however, that a Bylaw or amendment thereof changing the authorized number of Directors may be adopted, amended or repealed only by the shareholders, except that if a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a Bylaw or amendment thereof fixing the exact number of Directors within the limits specified in the Articles of Incorporation or these Bylaws may be adopted, amended or repealed by the Board of Directors. I, the undersigned, being the Secretary of POTOMAC NEVADA LEASING CORPORATION, do hereby certify the foregoing to be the Bylaws of said corporation, as adopted at a meeting of the Board of Directors held on the 13th day of April, 1993.
	/s/ William Shapiro WILLIAM DANA SHAPIRO Secretary to the Corporation

ARTICLES OF INCORPORATION OF POTOMAC NEVADA INVESTMENT INC., a Nevada Corporation
The undersigned natural person acting as an incorporator of a corporation under Chapter 78 of the Nevada Revised Statutes adopts the following articles of incorporation: ARTICLE I The name of the Corporation is Potomac Nevada Investment Inc., a Nevada corporation (the "Corporation").
ARTICLE II
The address and location of the principal office of the Corporation in the State of Nevada is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501.
ARTICLE III
The name and address of the resident agent for the Corporation in the State of Nevada is Sierra Corporate Services, 241 Ridge Street, Fourth Floor, Reno, Nevada 89501.
ARTICLE IV
The purpose for which the Corporation is formed is to engage in any lawful activity.
ARTICLE V
Section 1. The Corporation shall be authorized to issue 2,500 shares of capital stock with par value of ONE DOLLAR ($1.00) per share. Section 2. All of the shares of stock shall be of the same class, without preference or distinction. Section 3. The capital stock of the Corporation, after the amount of capital has been paid in money, property or services, as the board of directors shall determine, shall not be subject to assessment to pay the debts of the Corporation, nor for any other purpose, and no stock issued as fully paid shall ever be assessable or assessed and the articles of incorporation shall not be amended in this respect. Section 4. Cumulative voting by any shareholder is denied. Section 5. No shareholder shall, by reason of holding shares of any class of stock, have any preemptive or preferential right to purchase or subscribe for any shares of any class of stock now or hereafter authorized or any notes, debentures or bonds convertible into or carrying options or warrants to purchase shares of any class of stock now or hereafter authorized, whether or not the issuance of any shares, notes, debentures or bonds would adversely affect the dividend or voting rights of the shareholder.
ARTICLE VI
The period of existence of the Corporation is perpetual.
ARTICLE VII
The name and post office address of the incorporator is John B. Galvin, P. O. Box 2670, Reno, Nevada 89505.
ARTICLE VIII
The members of the governing board of the Corporation shall be designated as "directors". The board of directors shall consist of five (5) members. The number of directors of the Corporation may be increased or decreased from time to time as provided in the bylaws of the Corporation. The names and addresses of the members of the initial board of directors who shall serve as director until his or her successors shall have been elected and qualified is as follows: NAME ADDRESS H. Lowell Davis 506 Richards Lane Alexandria, Virginia 22302 Paul F. Naughton 1058 Harriman Street Great Falls, Virginia 22066 William Dana Shapiro 1033 Broad Branch Court McLean, Virginia 22101 William D. Stockbridge 2149 California Street, N.W. Washington, D.C. 20008 Margie Vollman 2765 Edgewood Drive Reno, Nevada 89503
ARTICLE IX
In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by Chapter 78 of the Nevada Revised Statutes or other statutes or laws of the State of Nevada, the board of directors is expressly authorized: (i) to make, amend, alter, or repeal the bylaws of the Corporation; (ii) to adopt from time to time bylaw provisions with respect to indemnification or directors, officers, employees, agents and other persons as it shall deem expedient and in the best interests of the Corporation and to the extent permitted by law; and (iii) to fix and determine designations, preferences, privileges, rights and powers and relative, participating, optional or other special rights, qualifications, limitations or restrictions on the capital stock of the Corporation as provided by Nev. Rev. Stat. Section 78.195, unless otherwise provided herein.
ARTICLE X
To the extent specified from time to time by the board of directors, no officer or director of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as an officer or director, excepting only (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of dividends in violation of Nev. Rev. Stat. Section 78.300. No amendment or repeal of this Article X applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and executed these Articles of Incorporation this 18 ^th day of October, 1993.
	/s/ John B. Galvin John B. Galvin
STATE OF NEVADA ) ) ss. COUNTY OF WASHOE ) On this 18 ^th day of October, 1993, personally appeared before the undersigned, a Notary Public, in and for the County of Washoe, State of Nevada, Robert E. Armstrong, known to me to be the person described in and who executed the foregoing instrument freely and voluntarily and for the uses and purposes mentioned. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. MARIALICE BIGRIGG Notary Public - State of Nevada Appointment Recorded in Washoe County MY APPOINTMENTS EXPIRES NOV. 20, 1994 /s/ Marialice Bigrigg NOTARY PUBLIC
WAIVER OF INCORPORATOR
I, John B. Galvin, being the incorporator named in the articles of incorporation (the "Articles") of Potomac Nevada Investment Inc., a Nevada corporation (the "Corporation"), which Articles were received and filed in the office of the Secretary of State of the State of Nevada on October 19, 1993, waive all my respective right, title and interest in and to any stock or property of the Corporation and any fight of management thereof. DATED: This 19 ^th day of October, 1993.
		/s/ John B. Galvin John B. Galvin

BYLAWS OF POTOMAC NEVADA INVESTMENT INC. ARTICLE 1 Identification
Section 1.01. Name . The name of the Corporation is Potomac Nevada Investment Inc. Section 1.02. Resident Office and Resident Agent . The address of the resident office of the Corporation is 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501; and the name of the resident agent at this address is Sierra Corporate Services. Section 1.03. Other Offices . Branch or subordinate offices may be established by the Board of Directors. Section 1.04. Seal . The seal of the Corporation will be circular in form and mounted upon a metal die, suitable for impressing the same upon paper. Section 1.05. Fiscal Year . The fiscal year of the Corporation will be determined by resolution of the Board of Directors.
ARTICLE 2 Capital Stock
Section 2.01. Consideration for Shares . The capital stock may be issued for such consideration, expressed in dollars, not less than the par value thereof, if any, as shall be fixed from time to time by the Board of Directors. Treasury shares may be disposed of by the Corporation for such consideration expressed in dollars as may be fixed from time to time by the Board of Directors. Section 2.02. Payment for Shares . The consideration for the issuance of shares may be paid, in whole or in part, in cash, labor or services actually performed or personal property, or real estate or leases thereof; the term "personal property" may include the legally enforceable obligation of a subscriber to pay the balance of a subscription for the issuance of shares. Any shares issued shall be considered to be fully paid and nonassessable if (a) the entire amount, or (b) not less than the amount characterized as capital pursuant to NRS Section 78.270 accompanied by the legally enforceable obligation of the subscriber to pay the balance of the subscription has been received by the Corporation. The judgment of the Board of Directors as to the value of the consideration received for shares shall be conclusive as to all except the then existing shareholders for whom it shall be conclusive in the absence of actual fraud in the transaction. No certificate shall be issued for any share until the share is fully paid. Section 2.03. Certificates Representing Shares . Each holder of the capital stock of the Corporation is entitled to a certificate signed by the President or a Vice President, and the Secretary or an Assistant Secretary, certifying the number of shares owned by the shareholder in the Corporation. Section 2.04. Transfer of Stock . The Corporation will register a transfer of a stock certificate presented to it for transfer if the following conditions have been fulfilled: (a) Endorsement . The certificate is properly endorsed by the registered shareholder or by the shareholder's duly authorized agent; (b) Witnessing . The endorsement or endorsements are witnessed by one witness unless this requirement is waived by the Secretary; (c) Adverse Claims . The Corporation has no notice of any adverse claims or has discharged any duty to inquire into any adverse claims; and (d) Collection of Taxes . There has been compliance with any applicable law relating to the collection of taxes.
ARTICLE 3 The Shareholders
Section 3.01. Place of Shareholder Meetings . Meetings of the shareholders of the Corporation shall be held at the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, or such other place as may be designated by the Chairman, the President or the Board of Directors, or by the written consent of all shareholders entitled to vote at the meeting given either before or after the meeting and filed with the Secretary. Section 3.02. Annual Shareholder Meeting . Unless a written consent of all of the shareholders entitled to vote at the annual meeting is filed with the Secretary in lieu of an annual meeting, the annual shareholders' meeting shall be held at 10:00 o'clock a.m. in the principal business office of the Corporation, 241 Ridge Street, Fourth Floor, Reno, Washoe County, Nevada 89501, on the fifteenth day of the third month following the end of the Corporation's fiscal year, if this day is not a legal holiday, and if a holiday, then on the first following day that is not a legal holiday. In the event the annual shareholder' s meeting is not held at such time and place, the Board of Directors, the Chairman of the Board of Directors, the President or shareholders holding not less that one-tenth of all the shares entitled to vote at the meeting may call the annual meeting of the shareholders. The failure to hold the annual meeting or to file the written consent in lieu thereof will not cause a forfeiture or dissolution of the Corporation. Section 3.03. Special Shareholder Meetings . Special shareholders' meetings may be called by the Board of Directors, the Chairman, the President or shareholders holding not less than one-tenth of all the shares entitled to vote at the meeting. Section 3.04. Notice of Shareholder Meetings -- Waiver . Written notice stating the place, day and hour of a shareholders' meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered not less than ten (10) days, nor more than fifty (50) days before the date of the meeting, either personally, or by mail, or by other means of written communication, charges prepaid, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each registered shareholder entitled to vote at the meeting. If mailed, the notice shall be considered to be delivered when deposited in the United States mail addressed to the shareholder at the shareholder's address as it appears on the stock transfer books of the Corporation, with postage prepaid. If a shareholder gives no address, notice shall be deemed to have been given to the shareholder if sent by mail or other written communication addressed to the place where the Corporation's principal office is located, or if published at least once in some newspaper of general circulation in the county in which the Corporation's principal office is located. Waiver by a shareholder in writing of notice of a meeting, is equivalent to giving notice. Attendance by a shareholder, without objection to the notice, whether in person or by proxy, at a meeting is a waiver of notice of the meeting. Section 3.05. Shareholder Quorum . A majority of the shares entitled to vote, represented in person or by proxy, is a quorum at a shareholders' meeting. The shareholders present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 3.06. Adjourned Shareholder Meetings and Notice Thereof . Any shareholders' meeting, whether annual or special, whether or not a quorum is present, may .be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy, but in the absence of a quorum no other business may be transacted at any shareholders' meeting. When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. As to any adjournment of less than thirty (30) days, it shall not be necessary to give any notice or the time and place of the adjourned meeting or of the business to be transacted, other than by announcement at the meeting at which the adjournment is taken. Section 3.07. Entry of Notice . An entry in the minutes of any meeting of shareholders, whether annual or special, to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the meeting was given to all shareholders as required by law and these Bylaws. Section 3.08. Voting . Except as otherwise provided by law, only persons in whose names shares entitled to vote stand on the stock registry of the Corporation on the day three (3) days prior to any shareholders' meeting, or, if a record date for voting purposes is fixed as provided in Article 6, Section 6.01, of these Bylaws, then on that record date, shall be entitled to vote at the meeting. Voting may be viva voce or by ballot; provided, however, that all elections for Directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Except as otherwise provided by an express provision of the Articles of Incorporation or by an express provision of law, each full share is entitled to one vote and, when a quorum is present at the commencement of any shareholders' meeting, the vote of the holders of a majority of the shares entitled to vote present, in person or by proxy, shall decide any question brought before the shareholders' meeting. Fractional shares shall not be entitled to any voting rights whatsoever. Section 3.09. Consent of Absentees . The transactions of any shareholders' meeting, either annual or special and however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes thereof, all such waivers, consents or approvals shall be filed with the Secretary or be made a part of the minutes of the meeting. Section 3.10. Action or Ratification of Action Without Meeting . Any action which, under applicable provisions of law, may be taken or ratified at a meeting of the shareholders, may be taken or ratified without a meeting if authorized in writing by shareholders holding the percentage of the voting power required by law for taking the action by written consent and the written consent is filed with the Secretary. Section 3.11. Proxies . Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by the person or by the person's duly authorized agent and filed with the Secretary of the Corporation; provided that no proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless, the person executing it specified therein the length of time for which the proxy is to continue in force, which in no event shall exceed seven (7) years from the date of its execution. Section 3.12. Definition of "Shareholder" . As used in these Bylaws, the term "shareholder", and any term of like import, shall include all persons entitled to vote the shares held by a shareholder, unless the context in which the term is used indicates that a different meaning is intended.
ARTICLE 4 The Board of Directors
Section 4.01. Number of Directors . The Board of Directors of the Corporation shall consist of five (5) members. The members of the Board of Directors need not be shareholders. The number of members of the Board of Directors may be increased or decreased from time to time as provided in Section 4.02 below. Section 4.02. Increase or Decrease of Directors . The number of Directors of the Corporation may be increased or decreased from time to time, at a meeting of the shareholders or by the filing of a written consent, by the affirmative vote of a majority of the issued and outstanding shares of stock of the Corporation. This section of the Bylaws may be amended only by the affirmative vote, at a meeting of the shareholders, of a majority or the issued and outstanding shares of stock of the Corporation. Section 4.03. Election . Members of the initial Board of Directors shall hold office until the first annual shareholders' meeting or until their successors shall have been elected and qualified. At the first annual shareholder's meeting and at each annual meeting thereafter, or by a written consent filed in lieu of an annual meeting, the shareholders shall elect Directors to hold office until the time for the next succeeding annual meeting. If any annual shareholders' meeting is not held and a written consent in lieu of an annual meeting is not filed, or the Directors are not elected, the Directors may be elected at any special shareholders' meeting held for that purpose or by the filing of a special written consent. Each Director shall hold office for the term for which the Director is elected or until the Director' s successor shall be elected and qualified. Section 4.04. Vacancies . Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors was present, or by a sole remaining Director. A Director elected to fill a vacancy shall be elected for the unexpired term of the Director's predecessor in office. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any Director or Directors are elected to elect the full authorized number of Directors to be voted for at that meeting, or if a vacancy is declared by the Board of Directors for any reason permitted by law. The shareholders may elect a Director or Directors at any time to fill any vacancy or vacancies not filled by the Directors. If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board or the shareholders shall have power to elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of the Director's term of office. Section 4.05. Place of Meetings . Immediately after the annual meeting of the shareholders, at the same place as the meeting of the shareholders, the Board of Directors shall meet each year for the purpose of organization, election of officers, and consideration of any other business that may properly be brought before the meeting. No notice of any kind to either old or new members of the Board of Directors for this annual meeting shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.07. Section 4.06. Regular Meetings . Regular meetings of the Board of Directors shall be held at the times and places within or without the State of Nevada as may be designated from time to time by resolution of the Board or by written consent of all members of the Board. No notice of any kind to members of the Board for these regular meetings shall be necessary unless the meeting is to be held at a place other than the principal business office of the Corporation, in which case notice of the place of the meeting shall be given as provided in Section 4.07. Section 4.07. Other Meetings . Other meetings of the Board of Directors for any purpose or purposes may be held at any time upon call by the President or, if the President is absent or unable or refuses to act, by any Vice President or by any two (2) Directors. The other meetings may be held at any place within or without the State of Nevada as may be designated from time to time by resolution of the Board of Directors or by written consent of all Directors. Written notice of the time and place of other meetings shall be delivered personally to each Director or sent to each Director by mail or other form of written communication, charged prepaid, addressed to the Director at the Director's address as it is shown upon the records of the Corporation or, if it is not so shown on the Corporation's records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case the notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the place in which the principal: office if the Corporation is located at least seventy-two (72) hours prior to the time of the holding of the meeting. In case the notice is delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. The mailing, telegraphing or delivery as above provided shall constitute due, legal and personal notice to the Director. Section 4.08. Notice of Adjourned Meetings . Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place be fixed at the meeting adjourned. Section 4.09. Entry of Notice . An entry in the minutes of any special meeting of the Board of Directors to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of the special meeting was given to all Directors as required by law and by these Bylaws. Section 4.10. Waiver of Notice . The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the Directors not present signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 4.11. Quorum . A majority of the authorized number of Directors, or, in the event that a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a majority of the exact authorized number of Directors, shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number be required by law or by the Articles of Incorporation. If the number of Directors pursuant to the Articles of Incorporation is one or two, the unanimous consent of said Directors shall be necessary for Board of Directors' action. Section 4.12. Adjournment . A quorum of the Directors may adjourn any Directors' meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors' meeting either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board. Section 4.13. Action Without Meeting . Any action required or permitted to be taken by the Board of Directors under the Articles of Incorporation, these Bylaws, or under applicable law, may be taken without a meeting if all members of the Board of Directors shall individually or collectively consent, in writing, to the action. Any action by written consent shall have the same force and effect as a unanimous vote of all Directors. All written consents must be filed with the Secretary. Section 4.14. Fees and Compensation . Directors shall not receive any stated salary for their services as Directors or as members of committees, but, by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed to Directors for the Director' s services. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefor. Section 4.15. Indemnification of Directors and Officers . (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, frees and amounts paid or owed in settlement actually and reasonably paid or incurred by the person or rendered or levied against the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which .the person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for misfeasance or nonfeasance in the performance of the person's duty to the Corporation unless and only to the extent that, despite the adjudication of liability .but in view of all circumstances of the case, such person fairly and equitably merits indemnification. (c) To the extent that a person who may be entitled to indemnification by the Corporation under this section is or has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses, including attorneys' fees, actually and reasonably paid or incurred by the person in connection therewith. (d) Any indemnification under subsections (a) and (b) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsection (a) or (b). Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or, even if obtainable, a quorum. of disinterested Directors so directs, by either independent legal counsel in a written opinion, or the stockholders, or (iii) if required by law, by the court in which such action, suit or proceeding was brought or another court of competent jurisdiction. (e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the Final disposition of such action, suit or proceeding if such payment is authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that the person is entitled to be indemnified by the Corporation as authorized in this section. (f) The indemnification provided by this section shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in the person' s official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. (g) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the Corporation would have the power to indemnify the person against such liability under the provisions of this section. (h) For the purposes of this section, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same, position under the provisions of this section with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity. (i) The provisions of this section shall apply to the estate, executors, administrators, heirs, legatees or devisees of a person entitled to indemnification hereunder and the term "person," where used in the section shall include the estate, executors, administrators, heirs, legatees or devisees of such person. Section 4.16. Powers of Directors . Subject to limitations of the Articles of Incorporation, of these Bylaws, and of applicable law as to action to be authorized or approved by the shareholders and subject to the duties of Directors as prescribed by these Bylaws, all corporate powers shall be exercised by or under the authority, of, and the business and affairs of the Corporation shall be controlled by, the Board of Directors. Without prejudice to these general powers, but subject to the same limitations, it is hereby expressly declared that the Directors shall have the following powers: First: To select and remove all officers, agents and employees of the Corporation, to delegate the power to remove any or all officers, agents and employees of the Corporation to an officer or officer, prescribe such powers and duties for them as may not be inconsistent with law, with the Articles of Incorporation or the Bylaws, fix their compensation, and require from them security for faithful service. Second: To conduct, manage and control the affairs and business of the Corporation and to make such rules and regulations therefor not inconsistent with law, with the Articles of Incorporation or these Bylaws, as they may deem best. Third: To change the principal office of the Corporation from one location to another within the same county as provided in Article 1, Section 1.02, hereof; to fix and locate from time to time one or more subsidiary offices of the Corporation, within or without the State of Nevada as provided in Article 1, Section 1.03, hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of the seal and of the certificates from time to time, as in their judgment they may deem best, provided the seal and the certificates shall at all times comply with the provisions of law. Fourth: To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor. Fifth: To authorize the issue of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, tangible or intangible property actually received or such other consideration as may be authorized by law. Sixth: To adopt and administer, or provide for the administration of, employee stock purchase plans, employee stock option plans and any other plans or arrangements whereby Directors, officers, employees or agents of the Corporation or any other entity may be entitled to acquire authorized but unissued or treasury stock or other securities of the Corporation, upon such terms and conditions as may from time to time be permitted by law. Seventh: To appoint an Executive committee and other committees, and to delegate to the Executive Committee any of the powers and authority of the Board in the management of the business and affairs of the Corporation except the power to declare dividends and to adopt, amend or repeal Bylaws. The Board of Directors shall have the power to prescribe the manner in which proceedings of the Executive Committee and other committees shall be conducted. The committees shall keep regular minutes of their meetings and report the same to the Board when required. The Executive Committee must be composed of two (2) or more Directors. Eighth: To lend money in furtherance of any of the purposes of the Corporation; to invest the funds of the Corporation from time to time; and to take and hold any property as security for the payment of funds so loaned or invested. Ninth: To lend money to employees, officers and Directors, and to otherwise assist employees, officers and Directors. Loans to members of the Board of Directors shall be made only upon the approval of a majority of the Board of Directors excluding the Director to whom the loan is to be made. Tenth: To declare dividends upon the capital stock of the Corporation in cash, in property, or in shares of the capital stock, subject to the limitation of the Articles of Incorporation and of applicable law. Before payment of any dividend, there may be set aside out of the funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interests of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE 5 The Officers
Section 5.01. Officers . The officers of the Corporation shall be a President, a Vice President, a Secretary and a Treasurer, and each of them shall be appointed by the Board of Directors. The Corporation may also have such other executive officers, including one (1) or more Vice Presidents, one (1) or more Assistant Secretaries and one (1) or more Assistant Treasurers, and other subordinate officers as may be appointed in accordance with the provisions of Section 5.03 of this Article 5. Officers need not be Directors. One person may hold two (2) or more offices, except those of President and Vice President. However, if the Corporation only has one shareholder, then one person may hold the offices of both President and Vice President. Section 5.02. Election . The officers of the Corporation, except those officers as may be appointed in accordance with the provisions of Section 5.03 or Section 5.05 of this Article, shall be chosen annually by the Board of Directors, and each shall hold office until the officer shall resign or shall be removed or otherwise disqualified to serve, or the officer's successor shall be elected and qualified; provided that officers may be appointed at any time by the Board of Directors, or, as permitted by Section 5.03 of this Article, by the President, for the purpose of initially filling an office or filling a newly created or vacant office. Section 5.03. Subordinate Officers . The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the Corporation may require, each of whom shall hold office for the term, have the authority and perform the duties as are provided in these Bylaws or as the Board of Directors may from time to time determine. Section 5.04. Removal and Resignation . Any officer may, subject to any contractual arrangements between the officer and the Corporation, be removed, either with or without cause, by a majority of the Directors in office at the time, at any regular or special meeting of the Board, or by any officer upon whom the power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving written notice to the Board of Directors, to the President, or to the Secretary of the Corporation. Any resignation shall take effect at the date of the receipt of the notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 5.05. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to that office. Section 5.06. President . Subject to the control of the Board of Directors, the President shall have general supervision, direction and control of the business and officers of the Corporation. In the absence of a Chairman of the Board, the President shall preside at all meetings of the shareholders and at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing committees, including the Executive Committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a Corporation, and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws. Section 5.07. Vice Presidents . In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other powers and perform such other duties as may be prescribed for them respectively by the Board of Directors, the President, or these Bylaws. Section 5.08. Secretary . The Secretary shall keep or cause to be kept, at the principal office or such other place as the Board of Directors may order, a book of minutes of all meetings of Directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof. The Secretary shall keep or cause to be kept, in any form permitted by law, at the principal office or at the office of the Corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for shares, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board of Directors required by these Bylaws or by law to be given, and shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. Section 5.09. Treasurer . The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any Director. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and Directors, whenever they request it, an account of all transactions as Treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the President or these Bylaws. If required by the Board of Directors, the Treasurer shall give the Corporation a bend in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of office of Treasurer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation. Section 5.10. Corporate Bank Accounts . Bank accounts in the name of the Corporation may be opened without the approval of the Board of Directors if opened with the consent of the President and the Treasurer of the Corporation. The Treasurer shall inform the Board of Directors of any bank account opened by the Corporation pursuant to the authority granted in this section at the next meeting of the Board of Directors. Section 5.11. Transfers of Authority . In case of the absence of any officer of the Corporation, or for any reason that the Board of Directors may consider sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer or to any Director or employee of the Corporation, provided a majority of the full Board of Directors concurs.
ARTICLE 6 Miscellaneous
Section 6.01. Record Date and Closing Stock Books . The Board of Directors may fix a time in the future, as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders, or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall not be more than sixty (60) days prior to the date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record on that date shall be entitled to notice of and to vote at the meeting, or to receive the dividend, distribution or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. The Board of Directors may close the books of the Corporation against transfers of shares during the whole or any part of the sixty (60) day period. Section 6.02. Inspection of Corporate Records . The share register or duplicate share register shall be open to inspection upon at least five (5) days written demand of any shareholder who has been a shareholder for at least six months preceding his demand or any person holding, or authorized in writing by the holders of, at least five percent (5 %) of all of the Corporation's outstanding shares, at any reasonable time. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection is not desired for any purpose which is in the interest of a business or object other than the business of the Corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such, purpose. Unless the Corporation furnishes a detailed annual financial statement, the books of account and all financial records of the Corporation shall be open to inspection upon at least five (5) days written demand of any stockholder of record and who owns not less than fifteen percent (15%) of all of the Corporation's issued and outstanding shares, at any reasonable time, and shall include the right to audit the same. The stockholder shall pay, in advance, for the cost for making extracts and conducting an audit. At the time of making the demand, the person demanding the inspection must provide the Corporation with an affidavit that such inspection, extracts or audit is not desired for any purpose not related to his interest in the Corporation as a stockholder. Any inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand for any inspection shall be made in writing upon the President of the Corporation. Section 6.03. Checks, Drafts, etc. All checks, drafts, bonds, bills of exchange, or other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors. Section 6.04. Contracts, etc., How Executed . The Board of Directors, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument or document in the name of and on behalf of the Corporation, and the authority may be general or confined to specific instances. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust, mortgages and corporate instruments or documents requiring the corporate seal, and certificates for shares of stock owned by the Corporation shall be executed, signed or endorsed by the President or any Vice President and by the Secretary (or any Assistant Secretary) or the Treasurer (or any Assistant Treasurer). The Board of Directors may, however, authorize any one (1) of these officers to sign any of such instruments, for and on behalf of the Corporation, without necessity of countersignature; may designate officers or employees of the Corporation, other than those named above, who may, in the name of the Corporation, sign such instruments; and may authorize the use of facsimile signatures or any of such persons. No officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit to render it liable for any purpose or to any amount except as specifically authorized in these Bylaws or by the Board of Directors in accordance with these Bylaws. Section 6.05. Certificates of Stock . A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares axe fully paid up. All certificates shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and Secretary or by a facsimile of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Before it becomes effective, every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust company, either domestic or foreign, as registrar of transfers, as required or permitted by law. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any certificate or certificates shall cease to be an officer or officers of the Corporation, whether because of death, resignation or otherwise, before the certificate or certificates shall have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of the Corporation. Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or these Bylaws may provide; provided, however, that any certificate so issued prior to full payment shall state the amount remaining unpaid and the terms of payment thereof. Section 6.06. Lost Certificates of Stock . The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, or stolen, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing the issue of a new certificate or certificates, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate or certificates, or the shareholder' s legal representative, to advertise the same in any manner as it shall require or give the Corporation a bend in any sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed, or both. Section 6.07. Representation of Shares of Other Corporations . The President or any Vice President and the Secretary or any Assistant Secretary of this Corporation are authorized to vote, represent and exercise on behalf of this Corporation all fights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to these officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other corporation or corporations may be exercised either by these officers in person or by any persons authorized so to do by proxy or power of attorney duly executed by these officers. Section 6.08. Inspection of Bylaws . The Corporation shall keep in its principal business office the original or a copy of the Bylaws as amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours.
ARTICLE 7 Amendments
Section 7.01. Power of Shareholders . New Bylaws may be adopted or these Bylaws may be amended or repealed by the vote or written assent of shareholders entitled to exercise a majority of the voting power of the Corporation, unless a greater number is required by law, by the Articles of Incorporation or by these Bylaws. Section 7.02. Power of Directors . Subject to .the right of shareholders as provided in Section 7.01 of this Article 7 to adopt, amend or repeal Bylaws, Bylaws may be adopted, amended, or repealed by the Board of Directors; provided, however, that a Bylaw or amendment thereof changing the authorize number of Directors may be adopted, amended or repealed only by the shareholders, except that if a flexible number of Directors is authorized by the Articles of Incorporation or these Bylaws, a Bylaw or amendment thereof fixing the exact number of Directors within the limits specified in the Articles of Incorporation or these Bylaws may be adopted, amended or repealed by the Board of Directors. I, the undersigned, being the Secretary of Potomac Nevada Investment Inc., do hereby certify the foregoing to be the Bylaws of said corporation, as adopted at a meeting of the Board of Directors held on the 19 ^th day of October, 1993.
	/s/ William Shapiro WILLIAM DANA SHAPIRO, Secretary to the Corporation

[Filed 8/03/2000]
CERTIFCATE OF INCORPORATION OF POTOMAC POWER RESOURCES, INC.
The undersigned, for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:
ARTICLE I
The name of the corporation is Potomac Power Resources, Inc.
ARTICLE II
The address of its registered office in the State of Delaware is 1013 Centre Road, Wilmington, County of New Castle. The name of its registered agent at such address is Corporation Service Company.
ARTICLE III
The nature of the business to purposes to be conducted or promoted is: To engage in any business approved by the Board of Directors for which corporations may be organized Under the General Corporation Law of Delaware.
ARTICLE IV
The Corporation shall have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, and the par value of each of such shares is One Dol1ar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00).
ARTICLE V
The name and mailing address of the incorporator is as follows:
NAME Adam Chmara		MAILING ADDRESS 2000 K Street NW. Suite 750 Washington. D.C. 20006
ARTICLE VI
Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.
ARTICLE VII
The Corporation is to have perpetual existence.
ARTICLE VIII
In furtherance and not in limitation of the power conferred by statute, the Board of Directors shall have the power to adopt, amend, alter and repeal the By-Laws of the Corporation.
ARTICLE IX
Meetings of stockholders may be held within or without the State of Delaware. The books of the Corporation maybe kept (subject to any provision contained in the Delaware statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
ARTICLE XI
No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to tile Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law. (iii) under Section 174 of the Delaware General Corporation Law, or (iv) or any transaction from which the director derived an improper personal benefit.
ARTICLE XII
The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action. suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware now existing or as such laws may hereafter be amended. I, THE UNDERSIGNED, being the incorporator hereinbefore named, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 3rd day of August, 2000.
	Adam Chmara Secretary

BY -LAWS

OF

Potomac Power Resources, Inc.
(a Delaware Corporation)

August 3, 2000

POTOMAC POWER RESOURCES, INC.

BY-LAWS

Article I

OFFICES

Section 1. The registered office of Potomac Power Resources, Inc. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

          Section 1.          The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

          Section 2.          A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

          Section 3.          Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders. may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

          Section 1.          The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

          Section 2.          A majority of the Board shall constitute a quorum for the transaction of bus mess. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

          Section 3.          (a)          Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                                    (b)          Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof

                                    (c)          Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

          Section 4.          (a)          As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section of this Article.

                                    (b)          Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                                    (c)          The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director. addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                                    (d)          The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

          Section 5.          The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

          Section 6.          Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

          Section 7.          Anyone or more members of the Board, or any committee designated by the Board, may participate ill a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

          Section 8.          The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees. each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

          Section 9.          Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Article IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is tl1reatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent pern1itted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing. or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

          Section 1.          The Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year. shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

          Section 2.          The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

          Section 3.          Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

          Section 1.          The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

          Section 2.          The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares. with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

          Section 3.          No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost. stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

          All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

          All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

          Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF FORMATION OF RAMP INVESTMENTS, L.L.C. This Certificate or Formation of RAMP Investments, L.L.C. (the "L.L.C") dated November 13 , 1995, is being duly executed and filed by PCI Air Management Corporation, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C. Section 18-10l, et seq.
FIRST:	The name and address of the LLC formed hereby is: RAMP Investments. L.L.C. l575 Delucchi Lane Suite 115 Reno, Nevada 89502
SECOND:	The address of the registered office of the LLC in the State of Delaware is: Corporation Trust Center 1209 Orange Street Wilmington, Delaware 19801
THIRD:	The name and address or the registered agent for service or process on the LLC in the State of Delaware is: The Corporation Trust Company Orange Street Wilmington, Delaware 19801
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of the date first above written
STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 10:30 AM 11/13/1995 950262133 - 2561064		PCI AIR MANAGEMENT CORPORATION, an authorized person By: /s/ LESLIE C. ZIMBERG Name: Leslie C. Zimberg Title: Vice President

CERTIFICATE OF AMENDMENT OF RAMP INVESTMENTS, L.L.C. A LIMITED LIABILITY COMPANY
FIRST: The name of the limited liability company is: RAMP INVESTMENTS, L.L.C.
SECOND: The Certificate of Formation of the limited liability company is hereby amended as follows:
	The address of the registered office of the limited liability company in Delaware is 1013 Centre Road, in the City of Wilmington, in the County of New Castle. The name of the registered agent at that address is: Corporation Service Company.
IN WITNESS WHEREOF, the undersigned, has executed, signed and acknowledged this Certificate of Amendment this 23 ^rd day of May, A.D. 1997. PCI Air Management Corporation, Member /s/ LESLIE C. ZIMBERG Authorized Person Name: LESLIE C. ZIMBERG

STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM  04/16/1999
991151229 - 2561064

CERTIFICATE TO RESTORE TO GOOD STANDING

A DELAWARE LIMITED LIABILITY COMPANY

PURSUANT TO TITLE 6,. SEC. 18-1107

1 Name of Limited Liability Company:

RAMP INVESTMENTS, L.L.C.

2. Date of original filing with Delaware Secretary of State:

NOVEMBER 13, 1995

I, John D. McCallum, Authorized Person of the above named limited liability company do hereby certify that this limited liability company is paying all annual taxes, penalties and interest due to the State of Delaware.

I do hereby request this limited liability company be restored to Good Standing.

/s/ /s/ JOHN D. McCALLUM
          Authorized Person
          Name: John D. McCallum

EXECUTION COPY

_____________________________

OPERATING AGREEMENT

RAMP INVESTMENTS, L.L.C.

_____________________________

TABLE OF CONTENTS
	SECTION 1 THE COMPANY	1
1.1	Formation	1
1.2	Name	1
1.3	Purpose; Powers	2
1.4	Principal Place of Business	2
1.5	Term	2
1.6	Filings; Agent for Service of Process	3
1.7	Title to Property	4
1.8	Payments of Individual Obligations	4
1.9	Independent Activities; Transactions with Affiliates	4
1.10	Definitions	5
	SECTION 2 MEMBERS' CAPITAL CONTRIBUTIONS	21
2.1	Original Capital Contributions	21
2.2	Assumption Agreement and AMP Funding Guarantee	22
2.3	Additional Capital Contributions	23
	SECTION 3 ALLOCATIONS	23
3.1	Profits	23
3.2	Losses	23
3.3	Special Allocations	23
3.4	Curative Allocations	25
3.5	Loss Limitation	26
3.6	Other Allocation Rules	26
3.7	Tax Allocations: Code Section 704(c)	28
	SECTION 4 DISTRIBUTIONS	28
4.1	Net Cash Flow	28
4.2	Amounts Withheld	29
4.3	Limitations on Distributions	29
4.4	Distributions and Payments to Members	29
	SECTION 5 MANAGEMENT	30
5.1	Authority of the Manager	30
5.2	Duties and Obligations of the Manager	33
5.3	Compensation; Expenses	35
5.4	Indemnification of the Manager	36
5.5	Temporary Investments	37
5.6	Manager's Liability	37
5.7	Withdrawal, Removal and Termination	37
	SECTION 6 ROLE OF MEMBERS	38
6.1	Rights or Powers	38
6.2	Voting Rights	38
6.3	Meetings and Consents of the Members	39
6.4	Procedure for Consent	39
6.5	Required Member Consents	40
6.6	Withdrawal/Resignation	41
6.7	Member Compensation	42
6.8	Members Liability	42
6.9	Partition	42
6.10	Transactions Between a Member or Manager and the Company	42
6.11	Other Instruments	43
	SECTION 7 REPRESENTATIONS AND WARRANTIES	43
7.1	In General	43
7.2	Representations and Warranties	43
7.3	Additional Representations, Warranties and Covenants by BT Investor	46
7.4	Limitation on Damages for Breach of Representations or Warranties/Damage Payments	47
	SECTION 8 ACCOUNTING, BOOKS AND RECORDS	47
8.1	Accounting, Books and Records	47
8.2	Reports	48
8.3	Tax Matters	50
	SECTION 9 AMENDMENTS	50
	SECTION 10 TRANSFERS	51
10.1	Restrictions on Transfers	51
10.2	Permitted Transfers	51
10.3	Conditions to Permitted Transfers	52
10.4	Prohibited Transfers	53
10.5	Rights of Unadmitted Assignees	54
10.6	Admission of Substituted Members	54
10.7	Distributions and Allocations in Respect of Transferred Interests	55
10.8	Retirement of BT Investor's Interest	56
	SECTION 11 POWER OF ATTORNEY	59
11.1	Manager as Attorneys-In-Fact	59
11.2	Nature of Special Power	60
	SECTION 12 DISSOLUTION AND WINDING UP	61
12.1	Dissolution Events	61
12.2	Winding Up	62
12.3	Compliance with Certain Requirements of Regulations; Deficit Capital Accounts	64
12.4	Deemed Distribution and Recontribution	64
12.5	Rights of Members	65
12.6	Notice of Dissolution/Termination	65
12.7	Allocations and Distributions During Period of Liquidation	65
12.8	Character of Liquidating Distributions	66
12.9	The Liquidator	66
12.10	Form of Liquidating Distributions	66
	SECTION 13 MISCELLANEOUS	67
13.1	Notices	67
13.2	Binding Effect	67
13.3	Construction	67
13.4	Time	68
13.5	Headings	68
13.6	Severability	68
13.7	Incorporation by Reference	68
13.8	Variation of Terms	69
13.9	Governing Law	69
13.10	Waiver of Jury Trial	69
13.11	Counterpart Execution	69
13.12	Sole and Absolute Discretion	69
13.13	Specific Performance	69
13.14	Holding Company Eligible Activities and Holding Company Eligible Assets/Banking Laws and Regulations	70
13.15	No Material Impairment	70

EXHIBITS
Exhibit A	-	Aircraft Lease Documents
Exhibit B	-	AMP Funding Contribution Agreement
Exhibit C	-	RAMP Investments Contribution Agreement
Exhibit D	-	Appraisal
Exhibit E	-	Form of PCI Note
Exhibit F	-	Form of Assumption Agreement
Exhibit G	-	Form of Guaranty of Payment
Exhibit H	-	Form of Lease Certificate
Exhibit I	-	Form of PCI Master Lease

OPERATING AGREEMENT OF RAMP INVESTMENTS, L.L.C.
This OPERATING AGREEMENT is entered into and shall be effective as of the 13th day of November, 1995, by and among PCI Air Management Corporation (" *PCI Air Co* " ), a Nevada corporation, AMP Funding, L.L.C. (" *AMP Funding* "), a Delaware limited liability company, AM-BT Nevada, Inc., a Nevada corporation ( " BT Investor "), as Members and PCI Air Co, as Manager pursuant to the provisions of the Act, on the following terms and conditions:
SECTION 1 THE COMPANY
1.1 Formation . The Members hereby agree to form the Company as a limited liability company under and pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. The fact that the Certificate is on file in the office of the Secretary of State, State of Delaware, shall constitute notice that the Company is a limited liability company. Simultaneously with the execution of this Agreement and the formation of the Company, each of the Members shall be admitted as members of the Company and the Manager shall be admitted as the manager of the Company. The rights and liabilities of the Members shall be as provided under the Act, the Certificate and this Operating Agreement.
1.2 Name . The name of the Company shall be RAMP Investments, L.L.C. and all business of the Company shall be conducted in such name or, with the consent of the Members, under any other name.
1.3 Purpose; Powers . (a) The purposes of the Company are (i) to acquire, manage, protect, conserve and sell (directly or indirectly) (A) the stock of ALMC, (B) an interest as a member in PCI Air Management Partners, L.LC, a Delaware limited liability company ("PCI Air LLC"), (C) the Leased Aircraft contributed to the Company by AMP Funding pursuant to Section 2.1 hereof and (D) Permitted Investments, (ii) to assume the PCJL Notes and perform its obligations thereunder, (iii) to make such additional investments and engage in such additional business endeavors as may be authorized pursuant to this Agreement or otherwise as the Members may unanimously agree, and (iv) to engage in any and all activities necessary or incidental to the foregoing purposes; provided that any asset acquired, investment made or activity engaged in by the Company shall be Holding Company Eligible or made Holding Company Eligible in compliance with Section 5.2(f). In no event shall the Company accept demand deposits, including without limitation demand deposits that the depositor may withdraw by check or similar means for payment to third parties. (b) The Company has the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to and in furtherance of the purposes of the Company set forth in this Section 1.3 and has, without limitation, any and all powers that may be exercised on behalf of the Company by the Manager pursuant to Section 5 hereof.
1.4 Principal Place of Business . The principal place of business of the Company shall be at 1575 Delucchi Lane, Suite 115, Reno, Nevada 89502. The Manager may change the principal place of business of the Company to any other place within or without the State of Delaware with the consent of the Members. The registered office of the Company in the State of Delaware initially is located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
*1.5 Term.* The term of the Company shall commence on the date the Certificate is filed in the office of the Secretary of State of the State of Delaware in accordance with the Act and shall continue until the dissolution and the completion of the winding up of the Company following a Dissolution Event, as provided in Section 12 hereof. Prior to the time that the Certificate is filed, no Person shall represent to third parties the existence of the Company or hold himself out as a Member or Manager.
1.6 Filings; Agent for Service of Process . (a) The Manager is hereby authorized to and shall execute and cause the Certificate to be filed in the office of the Secretary of State of the State of Delaware in accordance with the Act. The Manager shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware, including the preparation, execution and filing of such amendments to the Certificate and such other assumed name certificates, documents, instruments and publications as may be required by law, including, without limitation, action to reflect:
	(i) A change in the Company name; or (ii) A correction of false or erroneous statements in the Certificate or the desire of the Members to make a change in any statement therein in order that it shall accurately represent the agreement among the Members.
(b) The Members and the Manager shall execute and cause to be filed original or amended certificates and shall 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 or similar type of entity under the laws of any other jurisdictions in which the Company engages in business. (c) The registered agent for service of process on the Company .in the State of Delaware shall be The Corporation Trust Company or any successor as appointed by the Members in accordance with the Act. (d) Upon the dissolution and completion of the winding up of the Company in accordance with Section 12 hereof, the Liquidator, as an authorized person within the meaning of the Act, shall promptly execute and cause to be filed a Certificate of Cancellation in accordance with the Act and the laws of any other jurisdictions in which the Liquidator deems such filing necessary or advisable. *1.7 Title to Property.* All Property owned by the Company shall be owned by the Company as an entity and no Member shall have any ownership interest in such Property in its individual name, and each Member's interest in the Company shall be personal property for all purposes. Except as otherwise provided in Section 5.5 hereof, the Company shall hold title to all of its Property in the name of the Company and not in the name of any Member. 1.8 Payments of Individual Obligations . The Company's credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be Transferred or encumbered for, or in payment of, any individual obligation of any Member. *1.9 Independent Activities; Transactions with Affiliates.* (a) The Manager shall be required to devote such time to the affairs of the Company as may be necessary to manage and operate the Company and its interest in PCI Air LLC; and Affiliates of the Manager and, so long as the Manager is in satisfaction of its obligations pursuant to Sections 5.1 and 5.2 hereof, the Manager shall be free to serve any other Person or enterprise in any capacity that it may deem appropriate in its discretion. (b) Insofar as permitted by applicable law, neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Member or the Manager or their Affiliates from engaging in whatever activities they choose, whether the same are competitive with the Company or otherwise, and any such activities may be undertaken without having or incurring any obligation to offer any interest in such activities to the Company or any Member, or require any Member or the Manager to permit the Company or any other Member or its Affiliates to participate in any such activities, and as a material part of the consideration for the execution of this Agreement by each Member, each Member .hereby waives, relinquishes, and renounces any such right or claim of participation. (c) To the extent permitted by applicable law and subject to the provisions of this Agreement, in furtherance of the purposes of the Company set forth in Section 1.3, the Manager is hereby authorized to cause the Company to purchase property (whether real, personal or mixed) from, sell Property to or otherwise deal with any Member or the Manager, acting on its own behalf, or any Affiliate of any Member or Manager; provided that any such purchase, sale or other transaction shall be made on terms and conditions which are no less favorable to the Company than if the sale, purchase or other transaction had been made with an independent third party. (d) Notwithstanding Section 1.9(c), the Manager, on behalf of the Company, is hereby authorized to cause the Company to enter into the transactions evidenced by, and perform its obligations under, the AMP Funding Contribution Agreement, the RAMP Investments Contribution Agreement, the Assumption Agreements, the Operating Agreement of PCI Air Management Partners, L.L.C., the PCI Master Lease, any PCI Note and the Aircraft Lease Documents, all without any further action, consent or approval of any Person. (e) Each Member and Manager and any Affiliate thereof may also lend money to, borrow money from, act as a surety, guarantor or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, and transact other business with the Company and, subject to other applicable law, has the same rights and obligations with respect thereto as a Person who is not a Member. If a Member or any Affiliate thereof is a lender, in exercising its rights as a lender, including making its decision on whether to foreclose on property of the Company, such lender will have no duty to consider (i) its status as a Member or an Affiliate of a Member, (ii) the interests of the Company, or (iii) any duty it may have to the Company or any other Person.
*1.10 Definitions.* Capitalized words and phrases used in this Agreement have the following meanings: " *Act* " means the Delaware Limited Liability Company Act, 6 Del. C. Section 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law). " *Adjusted Capital Account Deficit* " means, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant Allocation Year, after giving effect to the following adjustments:
	(i) Credit to such Capital Account any amounts which such Member is deemed to be obligated to restore pursuant to the penultimate sentences in Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and (ii) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)( d )( 4 ), 1.704-1(b)(2)(ii)( d )( 5 ) and 1.704-1(b)(2)(ii)( d )( 6 ) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)( d ) of the Regulations and shall be interpreted consistently therewith. " *Affiliate* " means, with respect to any Person (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any Person owning or controlling ten percent (10%) or more of the outstanding voting interests of such Person, (iii) any officer, director, general partner, member or trustee of, or Person serving in a similar capacity with respect to, such Person, or (iv) any Person who is an officer, director, general partner, member, trustee or holder of 10% or more of the voting interests of any Person described in clauses (i), (ii), or (iii) of this sentence. For purposes of this definition, the terms "controlling, "controlled by" or "under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person or entity, whether through the ownership of voting securities, by contract or otherwise. " *Agreement* " or " *Operating Agreement* " means this Operating Agreement of RAMP Investments, L.L.C., as amended from time to time, which shall constitute the limited liability company agreement of the Company for all purposes of the Act. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires. " *AIMC* " means Aircraft International Management Corporation, a Delaware corporation. " *Aircraft Lease Documents* " means those documents and certificates listed on Exhibit A hereto and incorporated herein by reference. " *Allocation Year* " means (i) the period commencing on the Effective Date and ending on December 31, 1995, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on December 31, or (iii) any portion of the period described in clauses (i) or (ii) for which the Company is required to allocate Profits, Losses and other items of Company income, gain, loss or deduction pursuant to Section 3 hereof. " *AMP Funding Contribution Agreement* " means the Contribution Agreement of even date herewith and attached hereto as Exhibit B pursuant to which AMP Funding made or will make certain contributions pursuant to Section 2.1 hereof. " *Appraised Value* " means, with respect to any asset, the value determined by appraisal in the manner described in Exhibit D hereto which is incorporated herein by reference, provided that the " *Appraised Value* " of any PCI Note shall be determined 'by an investment bank of national recognition appointed by the Manager. " *Assumption Agreements* " means the First Assumption Agreement, together with the Second Assumption Agreement, if any. " *Bankruptcy* " means, with respect to any Person, a " *Voluntary Bankruptcy* " or an " *Involuntary Bankruptcy* ". A " *Voluntary Bankruptcy* " means, with respect to any Person (i) the inability of such Person generally to pay its debts as such debts become due, or an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors, (ii) the filing of any petition or answer by such Person seeking to adjudicate itself as bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property, or (iii) corporate action taken by such Person to authorize any of the actions set forth above. An " *Involuntary Bankruptcy* " means, with respect to any Person, without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation, or the filing of any such petition against such Person which petition shall not be dismissed within ninety (90) days, or without the consent or acquiescence of such Person, the entering of an order appointing a. trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person which order shall not be dismissed within ninety (90) days. The foregoing is intended to supersede and replace the events listed in Sections 18-304(a) and (b) of the Act. " *BHCA* " means the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Section 1841 et seq ., and the rules and regulations promulgated thereunder. " *Business Day* " means a day of the year on which banks are not required or authorized to close in New York, New York. " *Capital Account* " means, with respect to any Member, the Capital Account maintained for such Member in accordance with the following provisions:
	(i) To each Member's Capital Account there shall be credited (A) such Member's Capital Contributions, (B) such Member's distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof, and (C) the amount of any Company liabilities assumed by such Member or which are secured by any Property distributed to such Member. The principal amount of a promissory note which is not readily traded on an established securities market and which is contributed to the Company by the maker of the note (or a Member related to the maker of the. note within the meaning of Regulations Section 1.704-1 (b)(2)(ii)(c)) shall not be included in the Capital Account of any Member until the Company makes a taxable disposition of the note or until (and to the extent) principal payments are made on the note, all in accordance with Regulations Section 1.704- l(b)(2)(iv)(d)(2); (ii) To each Member's Capital Account there shall be debited (A) the amount of money and the Gross Asset Value of any Property distributed to such Member pursuant to any provision of this Agreement, (B) such Member's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof, and (C) the amount of any liabilities of such Member assumed by the Company or which are secured by any Property contributed by such Member to the Company; (iii) In the event all or any portion of an Interest is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Interest; and (iv) In determining the amount of any liability for purposes of subparagraphs (i) and (ii) above there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1 (b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the Manager shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company or any Members), are computed in order to comply with such Regulations, the Manager, with the consent of the Members, may make such modification. The Manager also shall, with the consent of the Members, (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1 (b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b). " *Capital Contributions* " means, with respect to any Member, the amount of money and the initial Gross Asset Value of any Property (other than money) contributed to the Company with respect to the Interest held or purchased by such Member. " *Certificate* " means the certificate of formation filed with the Secretary of State of the State of Delaware pursuant to the Act to form the Company, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires. " *Certificate of Cancellation* " means a certificate filed in accordance with 6 Del. C. Section 18-203. " *Change of Control* " of PCI Air Co shall be deemed to have occurred if a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) other than PCI is the direct or indirect owner of more than fifty percent (50%) of the voting securities of PCI Air Co with the power to designate a majority of such entity's directors or managers, as the case may be. " *Code* " means the United States Internal Revenue Code of 1986, as amended from time to time. " *Company* " means the limited liability company formed pursuant to this Agreement and the Certificate and the limited liability company continuing the business of this Company in the event of dissolution of the Company as herein provided. " *Debt'* means (i) any indebtedness for borrowed money or the deferred purchase price of property as evidenced by a note, bonds, or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by the Company whether or not the Company has assumed or become liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement, (v) accounts payable, and (vi) obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii), (iv), and (v) above, provided that Debt shall not include obligations in respect of any accounts payable that are incurred in the ordinary course of the Company's business and are not delinquent or are being contested in good faith by appropriate proceedings. " *Depreciation* " means, for each Allocation Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Allocation Year' for federal income tax purposes, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value (i) with respect to Leased Aircraft, on a straight line basis over a seven year period, and (ii) with respect to any other Permitted Investment, using any reasonable method selected by the Manager with the consent of the Members. " *Dissolution Event* " shall have the meaning set forth in Section 12.1 hereof. " *Effective Date* " means the date hereof. " *Expenses* " means any and all costs, liabilities, obligations, losses, damages, penalties, claims (including, but not limited to negligence, strict or absolute liability, liability in ton and liabilities arising out of violation of laws or regulatory requirements of any kind), actions, suits, costs, expenses and disbursements (including reasonable legal fees and expenses). " *First Appraiser* " shall have the meaning set forth in Exhibit D hereto. " *First Assumption Agreement* " means the Assignment and Assumption Agreement dated the date hereof pursuant to which the Company assumes all obligations of PCI under the First PCJL Note. " *First PCJL Note* " has the meaning set forth in Section 2.2 hereof. " *Fiscal Quarter* " means (i) the period commencing on the Effective Date and ending on December 31, 1995, (ii) any subsequent three-month period commencing on each of January 1, April 1, July 1 and October 1 and ending on the last date before the next such date, and (iii) the period commencing on the immediately preceding January 1, April 1, July 1, or October 1, as the case may be, and ending on the date on which all Property is distributed to the Members pursuant to Section 12 hereof. " *Fiscal Year* " means (i) the period commencing on the Effective Date and ending on December 31, 1995, (ii) any subsequent twelve-month period commencing on January 1 and ending on December 31, and (iii) the period commencing on the immediately preceding January 1 and ending on the date on which all Property is distributed to the Members pursuant to Section 12 hereof. " *Full Payout Lease* " means a lease of not more than 40 years under the terms of which the lessor can reasonably expect to realize a return of its full investment in the leased property plus the estimated cost of financing the property over the term of the lease from (i) rentals, (ii) estimated tax benefits, and (iii) the estimated residual value of the property at the expiration of the initial term of the lease, which in no event shall exceed 25% of the acquisition cost of the property to the lessor; provided that, in the event of any change in any applicable state or federal banking law after the Effective Date, the meaning of " *Full Payout Lease* " shall be changed accordingly. " *Funding Reduction Factor* " shall mean, as of the ninetieth (90th) day following the Effective Date, (i) one (1) minus (ii) the quotient of (A) the Net Contribution Value contributed by AMP Funding reduced by distributions made to AMP Funding pursuant to Section 5.2(k) hereof, divided by (B) the Net Contribution Value of the cash and property required to be contributed by AMP Funding as set forth in Section 2.1 hereof. " *GAAP* " means generally accepted accounting principles in effect in the United States as amended from time to time. " *Gross Asset Value* " means with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:
	(i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the Manager with the consent of the Members, provided that the initial Gross Asset Values of the assets contributed to the Company pursuant to Section 2.1 hereof shall be as set forth in such section; (ii) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking Code Section 7701 (g) into account), as determined in accordance with Section 10. 8(b)(iii) hereof as of the following times: (A) the acquisition of an additional Interest by any new or existing Member in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an Interest; and (C) the liquidation of the Company within the meaning of Regulations Section 1.704-1 (b)(2)(ii)(g), provided that an adjustment described in clauses (A) and (B) of this paragraph shall be made only if the Manager reasonably determines that such adjustment is necessary to reflect the relative economic interests of the Members in the Company; (iii) The Gross Asset Value of any item of Company assets distributed to any Member shall be adjusted to equal the gross fair market value (taking Code Section 770 l(g) into account) of such asset on the date of distribution as determined by the distribute and the Manager, provided that, if a Member that is the Manager or a Member that is an Affiliate of the Manager is the distribute, the determination of the fair market value of the distributed asset shall require the' consent of the Members prior to such distribution; and (iv) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)( m ) and subparagraph (vi) of the definition of " *Profits* " and " *Losses* " or Section 3.3(g) hereof; provided, however , that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph' (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses. " *Holding Company Eligible* " means, in respect of any asset or activity, that such asset is eligible for acquisition by, or such activity may be engaged in by, a bank holding company within the meaning of (i) Article III-A of the New York Banking Law and (ii) the BHCA, as the same may be amended from time to time. " *Holding Company Eligible Lease"* means a lease that is a Net Lease and a Full Payout Lease, and contains a tax indemnity for taxes other than federal income taxes that are attributable to the use' or presence of the leased asset in the taxing jurisdiction. " *Interest* " means an ownership interest in the Company representing some or all of the Capital Contributions made by a Member pursuant to Section 2 hereof, including any and all benefits to which the holder of such an Interest may be entitled as provided in this Agreement (including, without limitation, any rights to payments and distributions pursuant to Sections 4, 10 and 12 hereof), together with all obligations of such holder to comply with the terms and provisions of this Agreement. " *Involuntary Bankruptcy* " has the meaning set forth in the definition of " *Bankruptcy* ". " *Issuance Rents* " has the meaning set forth in Section 3.3(h) hereof. " *Leased Aircraft* " means the aircraft contributed to the Company by AMP Funding pursuant to Section 2.1 hereof. " *Leased Equipment* " has the meaning set forth in the definition of " *Permitted Investments* ". " *Liquidator* " has the meaning set forth in Section 12.9(a) hereof. " *Losses* " has the meaning set forth in the definition of " *Profits* " and " *Losses* ." " *Manager* " means PCI Air Co so long as PCI Air Co continues to serve in such capacity and has not been removed as Manager in accordance with Section 5.7 of this Agreement and shall also refer to any Person that is admitted to the Company as a successor Manager of the Company in accordance with this Agreement. " *Member* " means any Person (i) who is referred to as such in the first paragraph of this Agreement, or who has become a substituted Member pursuant to the terms of this Agreement and (ii) who has not ceased to be a Member. " *Members* " means all such Persons. " *Member Nonrecourse Debt* " has the same meaning as the term "partner nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations. " *Member Nonrecourse Debt Minimum Gain* " means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations. " *Member Nonrecourse Deductions* " has the same meaning as the term "partner nonrecourse deductions" in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations. " *Modified Tax Basis of Accounting* " means the use of the accrual method of accounting on the basis of Federal income tax laws and regulations in effect for the period being reported upon except as otherwise required by this Agreement including the maintenance of Capital Accounts. " *Moody's* " means Moody's Investor's Services, Inc. " *Net Cash Flow* " means an amount equal to the taxable income or loss of the Company arising in the ordinary course of the Company's business and investment activities, increased by (x) tax exempt interest, depreciation, amortization, cost recovery allowances and other noncash charges deducted in determining such taxable income and (y) the gross cash proceeds of the sale of any Property by the Company, to the extent not already included in such taxable income or loss and decreased by (i) principal payments made on any Company indebtedness; (ii) property replacement or contingency reserves actually established by the Company; (iii) capital expenditures when made other than from reserves or from borrowings the proceeds of which are not included in operating cash flow; and (iv) any other cash expenditures not deducted in determining such taxable income or loss. " *Net Contribution Value* " shall mean, with respect to the cumulative assets contributed by a Member to the Company, the Gross Asset Value of such assets reduced by the recourse and nonrecourse liabilities of such Member assumed by the Company. " *Net Lease* " means a lease under which the lessor will not, directly or indirectly, provide for or be obligated to provide for (i) the servicing, repair or maintenance of the leased property during the lease term; (ii) the purchasing of parts and accessories for the leased property; (iii) the loan of replacement or substitute property while the leased property is being serviced; (iv) the purchasing of insurance for the lessee except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance; and (v) the renewal of any license or registration for the leased property, unless such action by the lessor is clearly necessary to protect its interest as an owner or financier of the leased property, provided that, in the event of any changes in any applicable state or federal banking law after the Effective Date, the meaning of " *Net Lease* " shall be changed accordingly. " *Nonrecourse Deductions* " has the meaning set forth in Section 1.704-2(b)(1) of the Regulations. " *Nonrecourse Liability* " has the meaning set forth in Section 1.704-2(b)(3) of the Regulations. " *Parent* " means (i) in the case of PCI Air Co, PCI, (ii) in the case of AMP Funding, PCI, and (iii) in the case of AM-BT Nevada, Inc., Bankers Trust New York Corporation. " *PCI* " means Potomac Capital Investment Corporation, a Delaware corporation. " *PCI Air LLC* " means PCI Air Management Partners, L.L.C., a Delaware limited liability company. " *PCI Master Lease* " has the meaning set forth in Section 5.2(f)(i). " *PCI Note* " has the meaning set forth in clause (i) of the definition of " *Permitted Investment* ". " *PCJL* " means Potomac Capital Joint Leasing Corporation, a Delaware corporation. " *PCJL Notes* " has the meaning set forth in Section 2.2 hereof " *Percentage Interest* " means, with respect to each Member, as of the date hereof, the Percentage Interest of such Member set forth in Section 2.1 hereof. In the event all or any portion of an Interest is Transferred in accordance with the terms of this Agreement other than pursuant to a pledge or hypothecation, the transferee shall succeed to a corresponding portion of the Percentage Interest of the transferor. " *Permitted Investments* " mean:
	(i) A debt obligation (" *PCI Note* ") of PCI or a direct or indirect wholly owned subsidiary of PCI fully and unconditionally guaranteed by PCI that (i) provides for interest-only payments at an interest rate equal to PCI's then current borrowing rate for equivalent maturity securities, (ii) is either a demand obligation or has a maturity no later than June 30, 2002, and (iii) is substantially in the form of the PCI Note attached hereto as Exhibit E , provided that PCI's senior unsecured debt is rated at least Baa3 by Moody's or BBB- by S&P on the date such obligation is acquired by the Company; (ii) A debt obligation of any issuer other than PCI or its Affiliates rated at least Baa3 by Moody's or BBB- by S&P with a maturity no later than June 30, 2002; (iii) Any of the following items of personal property (" *Leased Equipment* ") owned by the Company and leased pursuant to a Holding Company Eligible Lease to (i) PCI as long as PCI is rated at least Baa3 by Moody's or BBB- by S&P or (ii) other lessees that are rated at least A2 by Moody's or A by S&P, in each case, on the date such Leased Equipment is acquired by the Company:
		(A)	Airplanes;
		(B)	Office furniture, fixtures and equipment;
		(C)	Vehicles, including automobiles, and forklifts, trucks, cranes and similar heavy equipment;
		(D)	Manufacturing and operating machinery and equipment; and
		(E)	Electric generating equipment;
	(iv) An interest as a member in PCI Air LLC; (v) Property described in Section 5.l(b) hereof; and (vi) Property described in Section 5.5 hereof.
" *Permitted Transfer* " has the meaning set forth in Section 10.2 hereof. " *Person* " means any individual, partnership (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity. " *Profits* " and " *Losses* " mean, for each Allocation Year, an amount equal to the Company's taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):
	(i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be added to such taxable income or loss; (ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of " *Profits* " and " *Losses* " shall be subtracted from such taxable income or loss; (iii) In the event the Gross Asset-Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; (iv) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Year, computed in accordance with the definition of " *Depreciation* "; (vi) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations Section 1.704-(b)(2)(iv)( m )( 4 ), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member's Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and (vii) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 3.3 or Section 3.4 hereof shall not be taken into account in computing Profits or Losses.
The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Sections 3.3 and 3.4 hereof shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above. " *Property* " means all real and personal property acquired by the Company, including cash, and any improvements thereto, and shall include both tangible and intangible property. " *RAMP Investments Contribution Agreement* " means the Contribution Agreement of even date herewith and in the form attached hereto as Exhibit C pursuant to which the Company makes or will make its contribution to PCI Air LLC. " *Reconstitution Period* " has the meaning set forth in Section 12.l(b) hereof " *Regulations* " means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations are amended from time to time. " *Regulatory Allocations* " has the meaning set forth in Section 3.4 hereof. " *Retirement Allocation Date* " has the meaning set forth in Section 10.8(b) hereof. " *Retirement Date* " has the meaning set forth in Sections 10.8(a)(i) and 10.8(a)(ii) hereof, as the case may be. " *Second Appraiser* " shall have the meaning set forth in Exhibit D hereto. " *Second Assumption Agreement* " means the Assignment and Assumption Agreement, if any, pursuant to which the Company assumes all obligations of PCI under the Second PCJL Note. " *Second PCJL Note* " has the meaning set forth in Section 2.2 hereof. " *Securities Act* " means the Securities Act of 1933, as amended. " *S&P* " means Standard & Poor's Corporation. " *Tax Matters Member* " has the meaning set forth in Section 8.3(a) hereof. " *Transfer* " means, as a noun, any voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition and, as a verb, voluntarily or involuntarily to transfer, sell, pledge or hypothecate or otherwise dispose of. " *Voluntary Bankruptcy* " has the meaning set forth in the definition of " *Bankruptcy* ." " *Wholly Owned Affiliate* " of any Person means an Affiliate of such Person (i) one hundred percent (100%) of the voting stock or beneficial ownership of which is owned directly by such Person, or by any Person who, directly or indirectly, owns one hundred percent (100%) of the voting stock 0r beneficial ownership of such Person, (ii) an Affiliate to such Person who, directly or indirectly, owns one hundred percent (100%) of the voting stock or beneficial ownership of such Person, and (iii) any Wholly Owned Affiliate of any Affiliate described in clause (i) or clause (ii).
SECTION 2 MEMBERS' CAPITAL CONTRIBUTIONS
*2.1 Original Capital Contributions.* The name, address, original Capital Contribution, and initial Percentage Interest of each of the Members is as follows:

Name and Address	Original Capital Contribution	Percentage Interest
PCI Air Co 1575 Delucchi Lane Suite 115 Reno, Nevada 89502	$2,158,722 in cash	1%
AMP Funding 1575 Delucchi Lane Suite 115 Reno, Nevada 89502	The aircraft described in the AMP Funding Contribution Agreement attached hereto as Exhibit B together with an amount of cash attributable to rental payments on such aircraft received by PCI after November 30, 1995 and before the date on which such aircraft are Contributed to the Company, such aircraft and cash with an agreed initial Gross Asset Value equal to $302,841,608 , allocated among such assets as set forth on Schedule A, which aircraft is subject to nonrecourse debt in the aggregate amount of $43,064,635 . The stock of AIMC, with an agreed initial Gross Asset Value equal to $212,307,137 $5,311,880 in cash	97%
AM-BT Nevada, Inc. c/o Lionel, Sawyer & Collins 1700 Bank of America Plaza 300 S. 4th Street Las Vegas, Nevada 89101	$4,317,443 in cash	2%

Each Member shall make its original Capital Contribution on the Effective Date or the next Business Day thereafter, provided that AMP Funding shall contribute the aircraft and related cash described in the AMP Funding Contribution Agreement at such times as are required by such AMP Funding Contribution Agreement.
*2.2 Assumption Agreement and AMP Funding Guarantee.* (a) In connection with the Capital Contribution made by AMP Funding pursuant to Section 2.1 on the Effective Date, pursuant to an agreement in the form of the First Assumption Agreement attached hereto as Exhibit F , the Company will assume liability for a note (the " *First PCJL Note"* ) in the amount of $233,000,000 payable to Potomac Capital Joint Leasing Corporation (" *PCJL* ") ( provided , however that the Company will not assume or have responsibility for the payment of interest on the First PCJL Note which has accrued but is unpaid on the date such note is assumed) and AMP Funding will enter into a guaranty in the form of the Guaranty of Obligations attached hereto as Exhibit G pursuant to which AMP Funding will guarantee the Company's obligations under the First PCJL Note. (b) In connection with any contribution made by AMP Funding pursuant to Section 2.1 after the Effective Date, the Company will assume liability for a note (the " *Second PCJL Note* " and, together with the First PCJL Note, the " *PCJL Notes* ") in the amount determined pursuant to Section 2.3(b) of the Operating Agreement of AMP Funding, L.L.C., provided that the Company Will not assume or have responsibility for the payment of interest on the Second PCJL Note which has accrued but is unpaid on the date that such note is assumed. AMP Funding will enter into a guaranty in the form of the Guaranty of Obligations attached hereto as Exhibit C pursuant to which AMP Funding will guarantee the Company's obligations under the Second PCJL Note.
*2.3 Additional Capital Contributions.* The Members may make additional Capital Contributions only with the written consent of all Members.
SECTION 3 ALLOCATIONS
*3.1 Profits.* After giving effect to the special allocations set forth in Sections 3.3 and 3.4, Profits for any Allocation Year shall be allocated to the Members in proportion to their Percentage Interests.
*3.2 Losses.* After giving effect to the special allocations set forth in Sections 3.3 and 3.4 and subject to Section 3.5, Losses for any Allocation Year shall be allocated to the Members in proportion to their Percentage Interests.
*3.3 Special Allocations.* The following special allocations shall be made in the following order: (a) *Minimum Gain Chargeback* . Except as otherwise provided in Section 1.704-2(0 of the Regulations, notwithstanding any other provision of tiffs Section 3, if there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto.The items to be so allocated shall be determined in accordance with Sections 1.704-2(0(6) and 1.704-2(j)(2) of the Regulations. This Section 3.3(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith. (b) *Member Minimum Gain Chargeback* . Except as otherwise provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of this Section 3, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Allocation Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 3.3(b) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith. (c) *Qualified Income Offset* . In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1 (b)(2)(ii)( d )( 4 ), 1.704-1 (b)(2)(ii)( d )( 5 ), or 1.704-1 (b)(2)(ii)( d )( 6 ) of the Regulations, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible, provided that an allocation pursuant to this Section 3.3(c) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 3 have been tentatively made as if this Section 3.3(c) were not in the Agreement. (d) *Gross Income Allocation* . In the event any Member has a deficit Capital Account at the end of any Allocation Year which is in excess of the amount such Member is obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 3.3 (d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such amount after all other allocations provided for in this Section 3 have been made as if Section 3.3(c) and this Section 3.3(d) were not in the Agreement. (e) *Nonrecourse Deductions* . Nonrecourse Deductions for any Allocation Year shall be specially allocated to the Members in proportion to their respective Percentage Interests. (f) *Member Nonrecourse Deductions* . Any Member Nonrecourse Deductions for any Allocation Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1). (g) *Section 754 Adjustments* . To the extent an adjustment to the adjusted tax basis of any Company asset, pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1 (b)(2)(iv)( m )( 2 ) or 1.704-1(b)(2)(iv)( m )( 4 ), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member's interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with their interests in the Company in the event Regulations Section 1.704-1(b)(2)(iv)( m )( 2 ) applies, or to the Member to whom such distribution was made in the event Regulations Section 1.704-1(b)(2)(iv)( m )( 4 ) applies. (h) *Allocations Relating to Taxable Insurance of Interests* . Any income, gain, loss or deduction realized as a direct or indirect result of the issuance of Interests by the Company to a Member (the "Issuance Items") shall be allocated among the Members so that, to the extent possible, the net amount of such Issuance Items, together with all other allocations under this Agreement to each Member shall be equal to the net amount that would have been allocated to each such Member if the Issuance Items had not been realized.
*3.4 Curative Allocations.* The allocations set forth in Sections 3.3(a), 3.3(b), 3.3(c), 3.3(d), 3.3(e), 3.3(f), 3.3(g) and 3.5 (the " *Regulatory Allocations* ") are intended to comply with certain requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 3.4. Therefore, notwithstanding any other provision of this. Section 3 (other than the Regulatory Allocations), the Manager shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Sections 3.1, 3.2, and .3.3(h). Notwithstanding the previous sentence, the Manager shall not make special allocations of income or gain under this Section 3.4 to offset Regulatory Allocations previously made under Sections 3.3(e) and 3.3(f) hereof.
*3.5* *Loss Limitation.* Losses allocated pursuant to Section 3.2 hereof shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 3.2 hereof, the limitation set forth in this Section 3.5 shall be applied on a Member by Member basis and Losses not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member's Capital Accounts so as to allocate the maximum permissible Losses to each Member under Section 1.704-1 (b)(2)(ii)(a) of the Regulations.
*3.6 Other Allocation Rules.* (a) Profits, Losses and any other items of income, gain, loss or deduction shall be allocated to the Members pursuant to this Section 3 as of the last day of each Allocation Year, provided that Profits, Losses and such other items shall also be allocated at such times as are required by Section 10.8 hereof and at such other times as the Gross Asset Values of Company Property are adjusted pursuant to subparagraph (ii) of the definition of " *Gross Asset Value* " in Section 1.10 hereof. (b) For purposes of determining the Profits, Losses, or any other items allocable to-any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Manager (except to the extent otherwise provided in Sections 10.7 or 10.8 hereof) using any permissible method under Code Section 706 and the Regulations thereunder. (c) The Members are aware of the income tax consequences of the allocations made by this Section 3 and hereby agree to be bound by the provisions of this Section 3 in reporting their shares of Company income and loss for income tax purposes, except as otherwise required by law. (d) Solely for purposes of determining a. Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Regulations Section 1.752-3(a)(3), the Members' interests in Company profits are in proportion to their Percentage Interests. (e) To the extent permitted by Section 1.704-2(h)(3) of the Regulations, the Manager shall endeavor to treat distributions of Net Cash Flow as having been made from the proceeds of a Nonrecourse Liability or a Member Nonrecourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Member. (f) Notwithstanding anything to the contrary herein, amounts paid or received by a Member or an Affiliate of a Member as damages or indemnification with respect to any breach or other violation of any representation, warranty, covenant or other agreement made pursuant to Section 7 or 10.4 hereof (such amounts being referred to in this Section 3.6(f as a "' *Damages Payment* ") shall be treated for income tax purposes as a contribution to or a distribution from the Company, as the case may be, by such Member, provided , however, that a Damages Payment (i) shall not be treated as a Capital Contribution, (ii) shall not cause an adjustment to or otherwise affect Capital Accounts of ally Member, (iii) shall not be taken into account in computing Profits or Losses, and (iv) in the case of a Damages Payment to a Member or an Affiliate of a Member, shall not be treated as a distribution of Net Cash Flow; provided further, however, that ( w ) to the extent a Damages Payment required to be paid by a Member or an Affiliate of a Member is with respect to a payment by the Company of an item that is deductible for income tax purposes or results in an increase in the basis of any Company asset that is depreciable, amortizable, or subject to cost recovery, any such deduction or cost recovery allowance shall not be taken into account in computing Profits or Losses, or other items of loss or deduction allocable pursuant to Section 3 of this Agreement, but shall be specially allocated to such Member for income tax purposes, ( x ) to the extent any Damages Payment required to be paid to a Member or an Affiliate of a Member is with respect to the receipt by the Company of an item that constitutes income for income tax purposes, such income shall not be taken into account in computing Profits or Losses or other items of income or gain allocable pursuant to Section 3 of this Agreement, but shall be specially allocated to such Member for income tax purposes, and ( y ) any special allocations pursuant to clauses ( w ) or ( x ) of this Section 3.6(f) shall not affect the Capital Account of any Member.
*3.7 Tax Allocations: Code Section 704(c).* In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any Property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property to the Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross Asset Value) using the "remedial method" pursuant to the Regulations under Section 704(c). In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 794(c) and the Regulations thereunder. Any elections or other decisions relating to such allocations shall be made by the Manager in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 3.7 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.
SECTION 4 DISTRIBUTIONS
*4.1 Net Cash Flow.* Except as otherwise provided in Sections 5.2(k), 10 and 12 hereof, after complete satisfaction of the Company's obligations under the PCJL Notes, Net Cash Flow, if any, shall be distributed quarterly as soon as practicable after the end of each Fiscal Quarter to the Members in proportion to their Percentage Interests, provided that no distributions shall be made that would create or increase an Adjusted Capital Account Deficit for any Member.
*4.2 Amounts Withheld.* All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any payment, distribution or allocation to the Company or the Members shall be treated as amounts paid or distributed, as the case may be, to the Members with respect to which such amount was withheld pursuant to this Section 42 for all purposes under this Agreement. The Company is authorized to withhold from payments and distributions, or with respect to allocations, to the Members, and to pay over to any federal, state and local government or any foreign government, any amounts required to be so withheld pursuant to the Code or any provisions of any other federal, state or local law or any foreign law, and shall allocate any such amounts to the Members with respect to which such amount was withheld.
*4.3 Limitations on Distributions.* (a) The Company shall make no distributions to the Members except (i) as provided in this Section 4, Section 5.2(k), Section 10.8 and Section 12 hereof, or (ii) as agreed to by all of the Members. (b) Notwithstanding any other provision of this Agreement, the Company shall not make a distribution to a Member to the extent that, after giving effect to the distribution, all liabilities of the Company, other than liability to Members on account of their Capital Contributions, would exceed the fair value of the Company's assets. For these purposes, the fair value of any asset or assets that are subject to a liability for which the recourse of creditors is limited shall be included in the calculation of the total value of the Company's assets only to the extent the fair value of such asset or assets exceeds such liability.
*4.4 Distributions anti Payments to Members.* It is the intent of the Members and the Manager that no distribution or payment to any Member (including distributions under Sections 4.1, 5:2(k), 10.8 and 12.2 hereof and distributions pursuant to Section 4.3 hereof) shall be deemed a return of money or other property in violation of the Act. The payment or distribution of any such money or property to a Member shall be deemed to be a compromise within the meaning of Section 18-502(b) of the Act, and the Member receiving any such money or property shall not be required to return any such money or property to the Company, any creditor of the Company or any other Person. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to return such money or property, such obligation shall be the obligation of such Member and not of the Company, any other Member or the Manager. Any amounts required to be paid under such obligation shall be treated as a permitted additional Capital Contribution pursuant to Section 2.3 hereof.
SECTION 5 MANAGEMENT
*5.1 Authority of the Manager.* The Members intend that the Company be managed by the Members in accordance with Section 18-402 of the Act and subject to any restrictions set forth in the Certificate or this Agreement, including, without limitation, those set forth in Section 1.3(a) and Section 6.5 hereof, the Members hereby delegate all powers to control and manage the business and affairs of the Company and to bind the Company to, and such powers shall be exclusively vested in, the Manager and the Manager may exercise all powers of the Company and do all such lawful acts as are not by statute, the Certificate or this Agreement directed or required to be exercised or done by the Members and in so doing shall have the right and authority to take all actions which the Manager deems necessary, useful or appropriate for the management and conduct of the Company's business and affairs and in the pursuit of the purposes of the Company, including exercising the following specific rights and powers in the name of and on behalf of the Company: (a) Conduct its business, carry on its operations and have and exercise the powers granted by the Act in any state, territory, district or possession of the United States, or in any foreign country which may be necessary or convenient to effect any or all of the purposes for which it is organized; (b) Acquire by purchase, lease, or otherwise any real or personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Company; (c) Operate, maintain, finance, improve, construct, own, grant options with respect to, sell, convey, assign, mortgage, and lease any real estate and any personal property necessary, convenient, or incidental to the accomplishment of the purposes of the Company; (d) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of the Property, or in connection with managing the affairs of the Company, including, executing amendments to this Agreement and the Certificate in accordance with the terms of this Agreement, both as Manager and, if required, as attorney-in-fact for the Members pursuant to any power of attorney granted by the Members to the Manager; (e) Borrow money and issue evidences of indebtedness necessary, convenient, or incidental to the accomplishment of the purposes of the Company, and secure the same by mortgage, pledge, or other lien on any Company assets; (f) Execute, in furtherance of any or all of the purposes of the Company, any deed, lease, mortgage, deed of trust, mortgage note, promissory note, bill of sale, contract, or other instrument purporting to convey or encumber any or all of the Company assets; (g) Prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the assets of the Company and in connection therewith execute any extensions or renewals of encumbrances on any or all of such assets; (h) Care for and distribute funds to the Members by way of cash income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Company or this Agreement; (i) Contract on behalf of the Company for the employment and' services of employees and/or independent contractors, such as lawyers and accountants, and delegate to such Persons the duty to manage or supervise any of the assets or operations of the Company; (j) Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Company assets and Manager liability) necessary or incidental to, or in connection with, the accomplishment of the purposes of the Company, as may be lawfully carried on or performed by a limited liability company under the laws of each state in which the Company is then formed or qualified; (k) Take, or refrain from taking, all actions, not expressly proscribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Company; (l) Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Company, the Members or the Manager in connection with activities arising out of, connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith; (m) Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign corporations, associations, general or limited partnerships, other limited liability companies, or individuals or direct or indirect obligations of the United States or of any government, state, territory, government district or municipality or of any instrumentality of any of them, including, without limitation, acquiring an interest in and being admitted as a member of, PCI Air LLC, and exercising all of the Company's rights as a member of PCI Air LLC; (n) Indemnify a Member or the Manager or former Member or Manager in accordance with this Agreement, and to make any other indemnification that is authorized by this Agreement in accordance with the Act; (o) Invest Company funds in, hold and sell, transfer or otherwise dispose of Permitted Investments; (p) Acquire the cash contributed pursuant to Section 2.1, Leased Aircraft and the AIMC stock and contribute the same to PCI Air LLC; (q) Execute and deliver on behalf of the Company (i) the AMP Funding Contribution Agreement, (ii) the RAMP Investments Contribution Agreement, (iii) the Assumption Agreements, (iv) the Operating Agreement of PCI Air Management Partners, L.L.C., (v) the PCI Master Lease, (vi) any PCI Note, (vii) the Aircraft Lease Documents, and (viii) any other document or instrument to be delivered in connection with any of the foregoing; and (r) Be the sole "authorized person" on behalf of the Company, as that term is defined in the Act.
*5.2 Duties anti Obligations of the Manager.* (a) The Manager shall take all actions which may be necessary or appropriate (i) for the continuation of the Company's valid existence as a limited liability company under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Members or to enable the Company to conduct the business in which it is engaged and (ii) for the accomplishment of the Company's purposes, including the acquisition, development, maintenance, preservation, and operation of Property in accordance with the provisions of this Agreement and applicable laws and regulations. (b) The Manager shall be under a fiduciary duty to conduct the affairs of the Company in the best interests of the Company and of the Members, including the safekeeping and use of all of the Property and the use thereof for the exclusive benefit of the Company. (c) Immediately after its acquisition of the Leased Aircraft, the cash contributed pursuant to Section 2.1, and the AIMC stock, the Manager shall cause the Company to contribute the same to PCI Air LLC pursuant to the RAMP Investment Contribution Agreement. (d) Except as may be required by Sections 5.2(k) and 10.8(b) hereof, until such time as the PCJL Notes are satisfied, the Manager shall transfer to PCJL an amount equal to all of the Company's Net Cash Flow for any given period in satisfaction of the PCJL Notes. (e) Prior to or contemporaneously with the Company's acquisition of any item of Leased Equipment, the Manager shall execute and deliver to the Company a certificate regarding the lease to which such Leased Equipment is subject in the form of the Lease Certificate attached hereto as Exhibit H . (f) The Manager will cause one of the following to occur within ninety (90) days after the default or termination of any lease of Leased Equipment (the "Defaulted Lease"):
	(i) The Manager will cause the Company to lease the Leased Equipment to PCI pursuant to a lease substantially in the form of the PCI Master Lease attached hereto as Exhibit I (the "PCI Master Lease") at then fair market value rental rates for a period of time so that the PCI Master Lease qualifies as a Full Payout Lease, provided that, if then current market conditions do not permit the PCI Master Lease to qualify as a Full Payout Lease, the Manager must choose another alternative pursuant to clause (ii) or (iii) below. (ii) The Manager will cause the Company to lease the Leased Equipment to a new lessee (the "Post Default Lease") at then fair market value rental rates so that the Post Default Lease qualifies as a Full Payout Lease, provided that, if then current market conditions do not permit the Post Default Lease to qualify as a Full Payout Lease, the Manager must choose another alternative pursuant to clause (i) above or (iii) below. (iii) The Manager will cause the Company to sell the Leased Equipment in a commercially reasonable manner.
(g) In the event that any rent received with respect to, or the proceeds of the sale of, any Permitted Investment is paid to the Company in non-cash consideration which is not itself a Permitted Investment, the Manager shall cause the Company to sell or otherwise dispose of such consideration in a commercially reasonable manner within ninety (90) days of its acquisition, including, but not limited to, by sale or transfer to PCJL in satisfaction of the PCJL Notes. (h) The Company shall at all times procure or cause to be procured and maintain or cause to be maintained with insurers of recognized responsibility, and substantial financial capacity, in the worldwide commercial aviation, watercraft or railcar industry, as the case may be, primary insurance and contingent liability and property damage liability insurance insuring the respective interests of each Member of the Company of the type and in amounts in accordance with prudent industry practice for persons owning, operating or using aircraft, watercraft or railcars, as the case may be, which covers the kinds of risks customarily insured and in amounts consistent with prudent industry practice; provided, however, that all contingent aircraft public liability insurance and aircraft property damage liability insurance shall have a combined single limit of not less than $500,000,000. (i) In the event that BT Investor elects to retire from the Company pursuant to Section 10,8(a) hereof; the Manager shall cause the Company to elect to retire from PCI Air LLC pursuant to Section 10.2(a) of the Operating Agreement of PCI Air Management Partners, L.L.C. (j) Upon direction of BT Investor, the Manager shall exercise the Company's rights pursuant to Section 5.7 (b) of the Operating Agreement of PCI Air Management Partners, L.L.C. (k) In the event that AMP Funding has not made the entire Capital Contribution required by Section 2.1 hereof within the ninety (90) day period after the Effective Date, the Company shall distribute as soon as practicable after the ninetieth day after the Effective Date (i) to AMP Funding, an amount equal to the aggregate amount that AMP Funding is required to distribute to BT Investor pursuant to Section 2.3(b) of the Operating Agreement of AMP Funding, L.L.C., (ii) to PCI Air Co, an amount determined by multiplying the Funding Reduction Factor by the aggregate Capital Contributions made by PCI Air Co prior to such date, provided that such amount shall not reduce PCI Air Co's Percentage Interest below one percent (1%), and (iii) to BT Investor, an amount determined by multiplying the Funding Reduction Factor by the aggregate Capital Contributions made by BT Investor prior to such date, provided that such amount shall not reduce BT Investor's Percentage Interest below two percent (2%).
*5.3 Compensation; Expenses.* (a) *Compensation and Reimbursement* . Except as otherwise provided in this Section 5.3 and Section 5.4 hereof, no Manager or Member shall receive any salary, fee, or draw for services rendered to or on behalf of the Company or otherwise in its capacity as a Manager or Member, nor shall any Manager or Member be reimbursed for any expenses incurred by such Manager or Member on behalf of the Company or otherwise in its capacity as a Manager or Member. (b) *Expenses* . The Manager shall pay all ordinary and customary expenses of the Company incurred in the ordinary course of the Company's day-to-day business in exchange for a management fee paid to the Manager in an amount equal to $50,000 per year payable quarterly in arrears. In addition, with the consent of the Members, the Manager may charge the Company, and shall be reimbursed, for other reasonable expenses (such as litigation costs) incurred in connection with the Company's business that would not be considered to be incurred in the ordinary course of the Company's day-to-day business. Such reimbursement shall be treated as expenses of the Company and shall not be deemed to constitute distributions to any Member of profit, loss or capital of the Company.
*5.4 Indemnification of the Manager.* (a) Unless otherwise provided in Section 5.4(d) hereof, the Company, its receiver, or its trustee (in the case of its receiver or trustee, to the extent of Company Property) shall indemnity, save harmless, and pay all Expenses of the Manager or any officers or directors of the Manager relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Manager, officer or director in connection with the business of the Company, including attorneys' fees incurred by the Manager, officer or director in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, including all such liabilities under federal and state securities laws (including the Securities Act) as permitted by law. (b) Unless otherwise provided in Section 5.4(d) hereof, in the event of any action by a Member against the Manager, including a Company derivative suit, the Company shall indemnify, save harmless, and pay all Expenses of the Manager, incurred in the defense of such action, if the Manager is successful in such action. (c) Unless otherwise provided in Section 5.4(d) hereof, the Company shall indemnify, save harmless, and pay all Expenses of the Manager, if for the benefit of the Company and in accordance with this Agreement the Manager makes any deposit, acquires any option or makes any other similar payment or assumes any obligation in connection with any Property proposed to be acquired by the Company and suffers any financial loss as the result of such action. (d) Sections 5.4(a), 5.4(b) and 5.4(c) shall be enforced only to the maximum extent permitted by law and the Manager shall not be indemnified from any liability for fraud, bad faith, intentional misconduct, gross negligence or a failure to perform in accordance with this Agreement. (e) Notwithstanding anything to the contrary in this Agreement, in no event will any indemnification obligation of the Company or a receiver or trustee to indemnify, save harmless or pay all Expenses set forth in this Section 5.4 subject any Member to personal liability.
*5.5 Temporary Investments* All property in the form of cash not otherwise invested shall be deposited for the benefit of the Company in one or more accounts of the Company, the Manager or any of its Wholly Owned Affiliates maintained in such financial institutions as the Manager shall determine or shall be invested in short-term liquid securities or other cash-equivalent obligations of such financial institutions or of the United States (or institutions whose obligations are guaranteed as to payment by the United States), and withdrawals shall be made only in the regular course of Company business on such signature or signatures as the Manager may determine from time to time. Such financial institutions must have outstanding unsecured indebtedness that is rated AA or better by S & P or Aa2 or better by Moody's (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating unsecured bank indebtedness).
*5.6 Manager's Liability.* Without limiting the Manager's liability to the Company for any breach of or failure to perform its covenants and obligations hereunder, no Manager shall be liable under a judgment, decree or order of a court, or in any other manner for the Debts or any other obligations or liabilities of the Company solely by reason of being a manager of the Company. The Manager shall not have any personal liability for the repayment of any Capital Contributions of any Member.
*5.7 Withdrawal, Removal and Termination* (a) *Withdrawal of Manager* . The Manager may not withdraw as Manager of the Company without the consent of the Members provided that, in the event that the Manager transfers its Interest as a Member pursuant to a Permitted Transfer in accordance with Section 10 hereof, it may withdraw as the Manager and the Members hereby agree to appoint the transferee of such Interest as successor Manager pursuant to Section 5.7(d). (b) *Removal of a Manager* . The Manager may be removed at any time For Cause at the discretion of BT Investor. In the event a Manager is removed For Cause at the direction of BT Investor, BT Investor will appoint, with the consent of the other Members which shall not be unreasonably withheld, the replacement Manager. For purposes of this Agreement, the term " *For Cause* " shall mean fraud, bad faith, intentional misconduct or' gross negligence of the Manager in the performance of its obligations under this Agreement. (c) *Termination of Manager by Operation of Law* . In the event of the Bankruptcy, dissolution or other termination of the Manager by operation of law, the Manager shall be deemed withdrawn as Manager hereunder upon the election of a successor pursuant to Section 5.7(d) hereof. (d) *Election of Successor Manager* . Except as set forth in Section 5.7(b), upon the withdrawal, removal or other termination of a Manager pursuant to this Agreement, the Members shall appoint a successor Manager to serve hereunder by consent. Such successor Manager shall be required to consent to being bound by the provisions of this Agreement in writing. Upon so consenting, such successor Manager shall be deemed admitted to the Company as a Manager. (e) *Effect of Removal, Withdrawal or Termination* . Any removal, termination by operation of law or withdrawal of a Manager that is also a Member of the Company shall not affect the status of such Manager as a Member, except t0 the extent otherwise provided herein.
SECTION 6 ROLE OF MEMBERS
*6.1 Rights or Powers.* The Members, in their capacities as members of the Company, hereby agree no to exercise any right or power to take part in the management or control of the Company or its business and affairs or to act for or bind the Company in any way. Notwithstanding the foregoing, the Members have all of the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act.
*6.2 Voting Rights.* No Member has any voting right except with respect to those matters specifically reserved *for a Member vote which are set forth in this Agreement and as required in the Act.*
*6.3 Meetings and Consents of the Members.* (a) Meetings of the Members may be called by the Manager and shall be called upon the written request of any Member. The-call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Members not less than ten (10) Business Days nor more than thirty (30) days prior to the date of such meeting. Members may vote in person, by proxy or by telephone at such meeting and may waive advance notice of such meeting. Whenever the vote or consent of Members is permitted or required, under the Agreement, such vote or consent may be given at a meeting of the Members or may be given in accordance with the procedure prescribed ill Section 6.4. Except as otherwise expressly provided in this Agreement, the unanimous vote or consent of the Members shall be required to constitute the act of the Members or the consent of the Members. (b) For the purpose of determining the Members entitled to vote on, or to vote at, any meeting of the Members or any adjournment thereof, the Manager or the Member requesting such meeting may fix, in advance, a date as the record date for any such determination. Such date shall not be more than thirty (30) days nor less than ten (10) Business Days before any such meeting. (c) Each Member may authorize any Person or Persons to act for it by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it. (d) Each meeting of Members shall be conducted by the Manager or such other individual Person as the Manager deems appropriate pursuant to such rules for the conduct of the meeting as the Manager or such other Person deems appropriate.
*6.4 Procedure for Consent.* In any circumstances requiring the agreement, approval or consent of the Members specified in this agreement, such agreement, approval or consent may, except where a standard for such agreement, approval or consent is provided for expressly in this Agreement, be given or withheld in the sole and absolute discretion of the Members, and each Member shall be entitled to consider only such factors and interests as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person. If the Manager receives the necessary agreement, approval or consent of the Members to such action, the Manager shall be authorized and empowered to implement such action without further authorization by the Members. Such agreement, approval or consent must be obtained in writing or by telephone or facsimile, if such telephone conversation or facsimile is followed by a written summary of the telephone conversation or facsimile communication sent by overnight courier, registered or certified mail, postage and charges prepaid, addressed as described in Section 13. I hereof, or to such other address as such Person may from 'time to time specify by notice to the Members and the Manager.
*6.5 Required Member Consents.* Notwithstanding any other provision of this Agreement, the Manager shall not have the authority to, and covenants and agrees that it shall not, do any of the following acts without the consent of the Members: (a) Cause or permit the Company to engage in any activity that is not consistent with the purposes of the Company as set forth in Section 1.3 hereof, (b) Knowingly do any act in contravention of this Agreement; (c) Confess a judgment against the Company in an amount in excess of $100,000; (d) Cause the Company to merge or consolidate with another Person; (e) Cause the Company to dissolve, except as otherwise provided in Section 10.8(a)(i) hereof; (f) Knowingly do any act which would make it impossible to carry on the ordinary. business of the Company, except as otherwise provided in this Agreement; (g) Possess Property, or assign rights in specific Property, for other than a Company purpose; (h) Cause the Company to take any action that would cause a Bankruptcy of the Company; (i) Cause a significant change in the nature of the Company's business or make any amendment, consent, waiver, or other modification with respect to the Operating Agreement of PCI Air Management Partners, L.L.C., including, but not limited to, any consent required by Section 6.5 thereof, the PCJL Notes, the Articles of Incorporation of AIMC, the AMP Funding Contribution Agreement, any Permitted Investment or the Aircraft Lease Documents; (j) Cause the Company to admit any additional Members or issue any additional Interests other than pursuant to Section 10.6 hereof or to effect any redemption or retirement of any part of an Interest (other than a retirement pursuant to Section 10.8(b) hereof); (k) Cause the Company to incur, assume, or obligate itself by contract for any Debt in the aggregate in excess of $50,000, except that the Company may incur, assume or obligate itself by contract for (i) liabilities described in Sections 5. 1 (q) and 5.3(b) hereof, and (ii) current trade liabilities incurred in the ordinary course of the Company's trade or business and payable in accordance with customary practices; (l) Cause the Company to refinance, recast, increase, modify, or extend any liabilities affecting the Property and in connection therewith execute any extensions or renewals of encumbrances on any or all of the Property; (m) Cause the Company to acquire directly or indirectly any assets other than the following: (i) Capital Contributions, (ii) an interest in PCI Air LLC, (iii) Permitted Investments, and (iv) cash proceeds and ancillary rights arising from the transactions contemplated hereby; and (n) Except as required by Section 5.2(c) hereof, cause the Company to invest more than $50,000,000 in Permitted Investments. (o) Cause the Company to acquire any Permitted Investments other than Permitted Investments described in clause (iv) or (vi) of the definition of "Permitted Investments" prior to the full satisfaction of the PCJL Notes.
*6.6 Withdrawal/Resignation.* Except as otherwise provided in Sections 4, 5.2(k), 10 and 12 hereof, no Member shall demand or receive a return on or of its Capital Contributions or withdraw or resign from the Company without the consent of all Members. If any Member resigns or withdraws from the Company in breach of this Section 6.6, such resigning or withdrawing Member shall not be entitled to receive any distribution under this Agreement. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive Property other than cash except as may be specifically provided herein.
*6.7 Member Compensation* No Member shall receive any interest, salary or drawing with respect to its Capital Contributions or its Capital Account or for services rendered-on behalf of the Company, or otherwise, in its capacity as a Member, except as otherwise provided in this Agreement.
*6.8 Members Liability.* No Member shall be liable under a judgment, decree or order of a court, or in any other mariner for the Debts or any other obligations or liabilities of the Company. A Member shall be liable only to make its Capital Contributions and shall not be required to restore a deficit balance in its Capital Account or to lend any funds to the Company or, after its Capital Contributions have been made, to make any additional contributions, assessments or payments to the Company, provided that a Member may be required to repay distributions made to it as provided in Section 18-607 of the Act subject to Section 4.4 hereof.
6.9 Partition . While the Company remains in effect or is continued, each Member agrees not to have any Company Property partitioned or file a complaint or institute any suit, action or proceeding at law or in equity to have any Company Property partitioned, and each Member, on behalf of itself, its successors and its assigns hereby waives any such right.
*6.10 Transactions Between a Member or Manager and tire Company.* Except as otherwise provided by applicable law, any Member or Manager may, but shall not be obligated to, enter into the transactions described in Sections 1.9(c), 1.9(d) and 1.9(e) hereof and transact other business with the Company and has the same rights and obligations when transacting such business with the Company as a Person or entity who is not a Member or Manager. A Member or Manager, any Affiliate thereof or an employee, stockholder, agent, director or officer of a Member or Manager or any Affiliate thereof, may also be an employee or be retained as an agent of the Company.
*6.11 Other Instruments.* Each Member hereby agrees to execute and deliver to the Company within five (5) Business Days after receipt of a written request therefor, such other and further documents and instruments, statements of interest and holdings, designations, powers of attorney and other instruments and to take such other action as the Manager deems necessary, useful or appropriate to comply with any laws, rules or regulations as may be necessary to enable the Company to fulfill its responsibilities under this Agreement.
SECTION 7 REPRESENTATIONS AND WARRANTIES
*7.1 In General.* As of the date hereof, each of the Members hereby makes each of the representations and warranties applicable to such Member as set forth in Sections 7.2 and 7.3. hereof, and such warranties and representations shall survive the execution of this Agreement.
*7. 2 Representations and Warranties.* Each Member hereby represents and warrants to the Company and each other Member that: (a) *Due Incorporation or Formation; Authorization of Agreement* . Such Member is a corporation duly organized or a partnership or limited liability company duly formed, validly existing, and in good standing under the laws of the jurisdiction of its incorporation or formation and has the corporate, partnership, or limited liability company power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Member is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Member has the corporate, partnership or limited liability company power and authority to execute and deliver this Agreement and to perform its obligations hereunder and the execution, delivery, and performance of this Agreement has been duly authorized by all necessary corporate, partnership, or company action. This Agreement constitutes the legal, valid, and binding obligation of such Member. (b) *No Conflict with Restrictions; No Default* . Neither the execution, delivery, and performance of this Agreement nor the consummation by such Member of the transactions contemplated hereby (i) will conflict with, violate, or result in a breach, whether with notice or lapse of time or both, of any of the terms, conditions, or provisions of any law, regulation, order, writ, injunction, decree, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator, applicable to such Member, (ii) will conflict with, violate, result in a breach of, or constitute a default under, whether with notice or lapse of time or both, any of the terms, conditions, or provisions of the articles of incorporation, bylaws, partnership agreement or operating agreement of such Member, (iii) will conflict with, violate, result in a breach of constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights, or require any consent, authorization, or approval under any indenture, note, bond, mortgage, lease agreement, or other instrument or agreement to which such Member is a party or by which such Member is or may be bound, or (iv) will result in the creation or imposition of any lien, claim, charge or encumbrance upon any of the material properties or assets of such Member. (c) *Governmental Authorizations.* Any registration, declaration, or filing with, or consent, approval, license, permit, or other authorization or order by, any governmental or regulatory authority, domestic or foreign, that is required by such Member in connection with the valid execution, delivery, acceptance and performance by such Member of its obligations under this Agreement or the consummation by such Member of any transaction contemplated hereby has been completed, made, or obtained on or before the Effective Date; provided, however, that BT Investor makes no representation or warranty under this Section 7.2(c) with respect to any federal, state or other banking laws and regulations. (d) *Litigation* . There are no actions, suits, proceedings, or investigations pending or, to the knowledge of such Member, threatened against or affecting such Member or its Affiliates or any of its properties, assets, or businesses in any court or before or by any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit, or proceeding which could, if adversely determined), reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member; and such Member has not received any currently effective notice of any default, and such Member is not in default (whether with notice or lapse of time or both), under any applicable order, writ, injunction, decree, permit, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member. (e) *Public Utility Holding Company Act* . Such Member (other than BT Investor) and each of its Affiliates is not, nor will the Company or any of its Members as a result of such Member holding an Interest therein be, a "holding company", an "affiliate of a holding company", a "subsidiary of a holding company" or an "associate company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935 as amended, or the regulations promulgated thereunder. (f) *Subsidiary* . All of the outstanding capital stock or ownership interests in the capital and profits of such Member (other than AMP Funding) is owned, directly or indirectly, by its Parent. (g) Investigation. Such Member is acquiring its Interest based upon its own investigation, and the exercise by such Member of its rights and the performance of its obligations under this Agreement will be based upon its own investigation, analysis, and expertise. Except for any Transfer of BT Investor's Interest as contemplated or permitted by this Agreement, such Member's acquisition of its Interest is being made for its own account for investment, and not with a view to the sale or distribution thereof. Such Member is a sophisticated investor possessing an expertise in analyzing the benefits and risks associated with acquiring investments that are similar to the acquisition of its Interest. (h) *Citizenship.* Such Member is and, except as may be consented to by the other Members (which consent shall not be unreasonably withheld), shall remain throughout the term of the Company, a "citizen of the United States" within- the meaning of Section 101 (16) of the Federal Aviation Act and shall notify the Manager immediately upon becoming aware. of any fact or circumstance that would lead reasonably to the conclusion that such Member is at risk of losing such citizenship. (i) *ERISA* . Such Member is not acquiring its Interest in the Company with the assets of any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or any "plan" within the meaning Section 4975(e)(1) of the Code.
7.3 *Additional Representations, Warranties and Covenants by BT Investor.* In addition to the representations, warranties and covenants set forth in Section 7.2 hereof, BT Investor hereby represents and warrants to the Company, PCI Air Co, AMP Funding and PCI that, and where indicated covenants and agrees that: (a) *Bank Holding Company* . None of the Company, the Manager nor AMP Funding nor any Affiliate thereof, shall be deemed to be a "bank holding company" within the meaning of the BHCA, solely by reason of BT Investor's Interest in the Company. (b) *Bank Regulatory Approvals* . Without limitation of the representations and warranties of BT Investor set forth in Section 7.2(c) hereof, no registration, declaration or filing with, or consent, approval, license, permit or other authorization or order of or by the Board- of Governors of the Federal Reserve System, the Banking Department of the State of New York, the Federal Deposit Insurance Corporation or any other bank regulatory authority with jurisdiction over BT Investor or any of its Affiliates is required in connection with the execution, delivery and performance by BT Investor of this Agreement, the performance by BT Investor of its obligations hereunder, the consummation of the transactions contemplated hereby or the acquisition by BT Investor of its Interest. (c) *Holding Company Eligible Assets* . The original Capital Contributions of the Members made pursuant to Section 2.1 hereof (based on facts and information provided to BT Investor by PCI and PCI Air LLC) consist solely of Holding Company Eligible assets. BT Investor covenants and agrees that it will not consent (based on' facts and information provided to BT Investor by the Manager) to the acquisition of any additional asset by or on behalf of the Company or the commencement by the Company of any activity not engaged in on the Effective Date, unless such asset or activity, as the case may be, is a Holding Company Eligible asset or Holding Company Eligible activity, as the case may be.
7.4 *Limitation on Damages for Breach of Representations or Warranties/Damage Payments.* (a) Notwithstanding any other provision of this Agreement, or any other law, rule, or regulation, each Member shall in no event be liable to the Company, the Members or any Affiliate of any of them for any amount in excess of $5,000,000 in the aggregate for all claims resulting from, related to, or in connection with the breach or other violation of any representation, warranty, covenant or agreement contained herein. (b) Any damages, indemnification or other payments made to the Company with respect to any breach or other violation of any representation, warranty, covenant or other agreement made pursuant to this Section 7, to the extent paid with respect to costs, liabilities or damages incurred by a Member or an Affiliate thereof, shall immediately be paid by the Company to such Member or Affiliate.
SECTION 8 ACCOUNTING, BOOKS AND RECORDS
8.1 *Accounting, Books anti Records.* (a) The Company shall keep on site at its principal place of business each of the following:
	(i) Separate books of account for the Company which shall show a true and accurate record in United States dollars of all costs and expenses incurred, all charges made, all credits made and received, and all income derived in connection with the conduct of the. Company and the operation of its business in accordance with the Modified Tax Basis of Accounting; (ii) Separate books of account that reflect the Capital Accounts of the Members as maintained pursuant to the provisions of this Agreement; (iii) A current list of tim full name and last known business, residence, or mailing address of each Member, both past and present; (iv) A copy of the Certificate and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been executed; (v) Copies of the Company's federal, state, and local income tax returns and reports, if any, for the six most recent years; (vi) Copies of this Agreement; (vii) Copies of any writings permitted or required under Section 18- 502 of the Act regarding the obligation of a Member to perform any enforceable promise to contribute cash or property or to perform services as consideration for such Member's Interest including, without limitation, the AMP Funding Contribution Agreement; and (viii) Any written consents obtained from Members pursuant to Section 18-302 of the Act regarding action taken by Members without a meeting.
(b) The Company shall use the accrual method of accounting in preparation of its financial reports and for tax purposes and shall keep its books and records accordingly. Any Member or its designated representative has the right at its own cost and expense, at any reasonable time, to have access to and inspect and copy the contents of such books or records. The Manager shall be reimbursed by such Member for reasonable costs incurred as a result of such inspection. Notwithstanding anything in the Act (including Section 18-305(c) of the Act) or this Agreement to the contrary, the Manager shall not have the right to keep confidential from any Member any information concerning the Company.
8.2 *Reports.* (a) *In General* . The Manager shall be responsible for causing the preparation of financial reports of the Company and the coordination of financial matters of the Company with the Company's accountants. (b) *Periodic Reports.* The Company shall cause to be delivered to each Member the financial statements listed in clauses (i) and (ii) below, prepared in each case in accordance with the Modified Tax Basis of Accounting. The quarterly financial statements referred to in clause (ii) below may be subject to normal year-end audit adjustments.
	(i) Within ninety (90) days after the end of each Fiscal Year and at such time as distributions are made to the Members pursuant to Section 12 hereof following the occurrence of a Dissolution Event, a balance sheet of the Company as of the end of such Fiscal Year and the related statements of operations, Members' Capital Accounts and changes therein, and cash flows for such Fiscal Year, together with appropriate notes to such financial statements and supporting schedules, all of which shall be audited and certified by the Company's accountants to be fairly stated in all material respects. (ii) Within sixty (60) days after the end of each of the first three Fiscal Quarters of each Fiscal Year, a balance sheet of the Company as of the end of such Fiscal Quarter and the related statements of operations, cash flows and Net Cash Flow, each as prepared by the Manager for such Fiscal Quarter.
(c) *Retirement Date Reports* . The Manager shall cause to be prepared and each Member furnished with (x) on the date on which any distribution is made pursuant to Section 10. 8(b) hereof in retirement of BT Investor's entire Interest, each of the following statements together with a certificate of the Manager executed by a financial officer thereof familiar with the financial affairs of the Company that such statements have been prepared in accordance with this Agreement subject-to adjustment by the audited statements to be provided pursuant to clause (y), and (y) not later than one hundred twenty (120) days after tim date described in clause (x), certification by an office of an internationally recognized accounting firm selected by the Manager that such statements have been prepared in accordance with this Agreement:
	(i) A balance sheet as of the Retirement Allocation Date; and (ii) A statement of the Members' Capital Accounts as adjusted pursuant to Section 10.8(b) hereof.
8.3 *Tax Matters.* (a) *Tax Elections* . The Manager is specifically authorized to act as the " *Tax Matters Member* " under the Code and in any similar capacity under state or local law. The Tax Matters Member shall have the authority without any further consent of the Members being required (except as specifically required herein), to make any and all elections for federal, state, local, and foreign tax purposes including, without limitation, any election, if permitted by applicable law: (i) to adjust the basis of Property pursuant to Code Sections 754, 734(b) and 743(b), or comparable provisions of state, local or foreign law, in connection with Transfers of Interests and Company distributions; (ii) to extend the statute of limitations for assessment of tax deficiencies against the Members with respect to adjustments to the Company's federal, state, local or foreign tax returns; and (iii) to the extent provided in Code Sections 6221 through 623 1 and similar provisions of federal, state, local, or foreign law, to represent the Company and the Members before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Members in their capacities as Members, and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Company and the Members; provided that, to the extent any such agreement, election, or document might have a material adverse effect on any Member, such Member must consent in writing to such agreement, election, or document and the Tax Matters Member must reasonably consult with such Member in any discussions or negotiations associated with such agreement or document. (b) *Tax Information* . Necessary tax information shall be delivered by the Manager to each Member as soon as practicable after the end of each Fiscal Year of the Company but not later than three and one-half (31/2) months after the end of each Fiscal Year. The Manager will provide an estimate of such tax information to each Member within sixty (60) days alter the end of each Fiscal Year.
SECTION 9 AMENDMENTS
Amendments to this Agreement may be proposed by the Manager or any Member. Following such proposal, the Manager shall submit to the Members a verbatim statement of any proposed amendment, providing that counsel for the Company shall have approved of the same in writing as to form, and the Manager shall include in any such submission a recommendation as to the proposed amendment. The Manager shall. seek the written vote of the Members on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto if it receives the affirmative vote of all of the Members.
SECTION 10 TRANSFERS
10.1 *Restrictions on Transfers.* Except as otherwise permitted by this Agreement, no Member shall Transfer all or any portion of its Interest. In the event that any Member pledges or otherwise encumbers all or any part of its Interest as security for the payment of a Debt, any such pledge or hypothecation shall be made pursuant to a pledge or hypothecation agreement that requires the pledgee or secured party to be bound by all of the terms and conditions of this Section 10. A Transfer of all or a portion of an Interest includes (a) a Transfer of a beneficial interest in a grantor trust that holds an Interest, and (b) an event that causes a grantor trust that holds an Interest not to be treated as a grantor trust for federal income tax purposes.
10.2 *Permitted Transfers.* Subject to the conditions and restrictions set forth in Section 10.3 hereof, a Member may at any time Transfer all or any portion of its Interest to (a) any other Member or Wholly Owned Affiliate of another Member, (b) any Wholly Owned Affiliate of the transferor, (c) the transferor's administrator or trustee to whom such Interest is transferred involuntarily by operation of law, (d) any purchaser approved by all of the other Members in their sole discretion or (e) with respect to a Transfer by BT Investor, after the occurrence of a determination by the Board of Governors of the Federal Reserve System that BT Investor must divest itself of its Interest in the Company, any Person consented to by the Manager, which consent shall not be unreasonably withheld (any such Transfer being referred to in this Agreement as a "Permitted Transfer").
10.3 *Conditions to Permitted Transfers.* A Transfer shall not be treated as a Permitted Transfer under Section 10.2 hereof unless and until the following conditions are satisfied: (a) Except in the case of a Transfer involuntarily by operation of law, the transferor and transferee shall execute and deliver to the Company such documents and instruments of conveyance as may be necessary or appropriate in the opinion of counsel to the Company to effect such Transfer and to confirm the agreement of the transferee to be bound by the provisions of this Section 10, and to comply with the requirements of Code Section 60501. In the case of a Transfer of Interests involuntarily by operation of law, the Transfer shall be confirmed by presentation to the Company of legal evidence of such Transfer, in form and substance satisfactory to counsel to the Company. In all cases, unless the requirements of this sentence have been waived by the Manager, the Company shall be reimbursed by the transferor and/or transferee for all costs and expenses that it reasonably incurs in connection with such Transfer. (b) The transferor and transferee shall furnish the Company with the transferee's taxpayer identification number, sufficient information to determine the transferee's initial tax basis in the Interest transferred, and any other information reasonably necessary to permit the Company to file all required federal and state tax returns and other legally required information statements or returns. Without limiting the generality of the foregoing, the Company shall not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred Interest until it has received such information. (c) Either (i) the Transfer occurs pursuant to an effective registration statement under the Securities Act and any applicable state securities law or (ii) the Transfer is exempt from registration or is otherwise in compliance with the Securities Act and applicable state securities law, and the transferor has furnished to the Company an opinion of counsel, reasonably satisfactory to all of the Members, to such effect; provided that the Members may unanimously agree to waive delivery of such opinion. (d) The Transfer will not cause the Company to be deemed to be an "investment company" under the Investment Company Act of 1940 or cause the Manager or AMP Funding to be subject to any federal or state banking law and, in each case, except in the case of a Transfer of an Interest involuntarily by operation of law, the transferor shall provide an opinion of counsel to such effect, unless the Members unanimously agree to waive the requirement that such opinion be provided. Such opinion and counsel shall be reasonably satisfactory to all of the Members. (e) No Transfer of an Interest shall be made except upon terms that would not, in the opinion of counsel chosen reasonably satisfactory to all of the Members, result in the termination of the Company within the meaning of Section 708 of the Code. If the immediate Transfer of such Interest would, in the opinion of such counsel, cause a termination within the meaning of Section 708 of the Code, then if, in the opinion of such counsel, the following action would not precipitate such termination, the transferor Member shall be entitled (i) immediately to Transfer only that portion of its Interest as may, in the opinion of such counsel, be transferred without causing such a termination and (ii) to enter into an agreement to Transfer the remainder of its Interest, in one or more Transfers, at the earliest date or dates on which such Transfer or Transfers may be effected without causing such termination. The purchase price for the Interest shall be allocated between the immediate Transfer and the deferred Transfer or Transfers pro rata on the basis of the percentage of the Interest being transferred, each portion to be payable when the respective Transfer is consummated, unless otherwise agreed by the parties to the Transfer. In determining whether a particular proposed Transfer will result in a termination of the Company, counsel to the Company shall take into account the existence of prior written commitments to Transfer made pursuant to this Agreement and such commitments shall always be given precedence over subsequently proposed Transfers.
10.4 *Prohibited Transfers.* Any purported Transfer of an Interest that is not a Permitted Transfer shall be null and void and of no force or effect whatever; provided that, if the Company is required to recognize a Transfer that is not a Permitted Transfer (or if the Company, in its sole discretion, elects to recognize a Transfer that is not a Permitted Transfer), the Interest transferred shall be strictly limited to the transferor's rights to allocations and distributions as provided by this Agreement with respect to the transferred Interest, which allocations and distributions' may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Interest may have to the Company. In the case of a Transfer or attempted Transfer of an Interest that is not a Permitted Transfer, the parties engaging or attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Company and the other Members from all cost, liability, and damage that the Company or any of such indemnified Members may incur (including, without limitation, incremental tax liabilities, lawyers fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby. Any indemnification payments made to the Company under this Section 10.4, to the extent paid with respect to costs, liabilities or other damages incurred by a Member shall immediately be paid by the Company to such Member.
10.5 *Rights of Unadmitted Assignees.* A Person who acquires an Interest but who is not admitted as a substituted Member pursuant to Section 10.6 hereof shall be entitled only to allocations and distributions with respect to such Interest in accordance with this Agreement, and shall have no right to any information or accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement.
10.6 *Admission of Substituted Members.* Subject to the other provisions of this Section 10, a transferee of an Interest may be admitted to the Company as a substituted Member only upon satisfaction of the conditions set forth in this Section 10.6: (a) The Members unanimously consent to such admission, which consent may be given or withheld in the sole and absolute discretion of the Members; (b) The Interest with respect to which the transferee is being admitted was acquired by means of a Permitted Transfer; (c) The transferee of an Interest (other than, with respect to clauses (i) and (ii) below, a transferee that was a Member prior to the Transfer) shall, by written instrument in form and substance reasonably satisfactory to the Manager (and, in the case of clause (iii) below, the transferor Member), (i) make representations and warranties to each nontransferring Member equivalent to those set forth in Section 7, (ii) accept and adopt the terms and provisions of this Agreement, including this Section I0, and (iii) assume the obligations of the transferor Member under this Agreement with respect to the transferred Interest. The transferor Member shall be released from all such assumed obligations except (x) those obligations or liabilities of the transferor Member arising out of a breach of this Agreement and, (y) in the case of a Transfer to any Person other than a Member, those obligations or liabilities of the transferor Member based on events occurring, arising or maturing prior to the date of Transfer; (d) Unless the requirements of this Section 10.6(d) have been waived by the Manager, the transferee pays or reimburses the Company for all reasonable legal, filing, and publication costs that the Company incurs in connection with the admission of the transferee as a Member with respect to the Transferred Interest; and (e) If required by the Manager, the transferee (other than a transferee that was a Member prior to the Transfer) shall deliver to the Company evidence of the authority of such Person to become a Member and to be bound by all of the terms and conditions of this Agreement, and the transferee and transferor shall each execute and deliver such other instruments as the Manager reasonably deems necessary or appropriate to effect, and as a condition to, such Transfer, including amendments to the Certificate or any other instrument filed with the State of Delaware or any other state or governmental authority.
10.7 *Distributions and Allocations in Respect of Transferred Interests.* If all or any portion of an Interest is Transferred during any Allocation Year in compliance with the provisions of this Section 10, Profits, Losses, each item thereof, and all other items attributable to the Transferred Interest for such Allocation Year shall be divided and allocated between the transferor and the transferee by taking into account their varying Percentage Interests during the Fiscal Year in accordance with Code Section 706(d), using any conventions permitted by law and agreed to by the transferor and transferee. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter shall be made to the transferee. Solely for purposes of making such allocations and distributions, the Company shall recognize such Transfer not later than the end of the calendar month during which it is given notice of such Transfer, provided that, if the Company is given notice of a Transfer at least ten (10) Business Days prior to the Transfer, the Company shall recognize such Transfer as of the date of such Transfer, and provided further that if the Company does not receive a notice stating the date such Interest was transferred and such other information as the Manager may reasonably require within thirty (30) days after the end of the Allocation Year during which the Transfer occurs, then all such items shall be allocated, and all distributions shall be made, to the Person who, according to the books and records of the Company, was the owner of the Interest on the last day of such Allocation Year. Neither the Company nor the Manager shall incur any liability for making allocations and distributions in accordance with the provisions of this Section 10.7, whether or not the Manager or the Company has knowledge of any Transfer of ownership of any Interest.
10.8 *Retirement of B T Investor's Interest.* (a) *In General*
	(i) *Operational Retirement* . The Manager may, at any time after June 30, 2001, elect to cause BT Investor's remaining Interest to be retired in accordance with this Section 10.8 by giving written notice of its election to the Company and to all other Members. Such notice shall state the date on which the distribution required by Section 10. 8(b) hereof shall be made to BT Investor (the "Retirement Date"), which date shall not be later than thirty (30) Business Days after the date of such written notice. (ii) *BT Investor Retirement Election* . If any of the following events shall have occurred, BT Investor may elect to retire from the Company by giving written notice of its election to the Company and to all other Members:
	(A)	The occurrence of June 30, 2002;
	(B)	The Manager shall fail in any material respect to perform or observe any material term covenant or obligation on its part to be performed or observed under this Agreement, if(I) such failure is capable of being cured and is not cured within ninety (90) days of the Manager receiving notice of such failure, and (2) such failure has a material adverse effect on the economic interests of the BT Investor;
	(C)	PCI or any Affiliate thereof shall default on (i) a payment of principal or interest on any PCI Note, if such default is not cured within five (5) Business Days or (ii) other obligations under any PCI Note, if such default is capable of being cured within thirty (30) days and is not cured within thirty (30) days;
	(D)	The occurrence of a Change of Control of PCI Air Co;
	(E)	If BT Investor becomes subject to regulation under the Public Utility Holding Company Act of 1935, as amended, as the result of PCI or any of its Affiliates being a Member or the Company becomes subject to such regulation and as a result thereof its ability to conduct its business in the ordinary course is materially adversely effected, provided that BT Investor shall not have the right to elect to be retired, if within forty (40) days of receipt by the Manager of Notice from BT Investor that it intends to elect to be retired, a designee of the Manager has purchased BT Investor's Interest in the Company (or would have purchased such Interest within such period but for the failure of BT Investor to consummate such purchase) for a purchase price equal to the amount that would have been distributed to BT Investor in retirement of its Interest had BT Investor elected to be retired on the date BT Investor delivered such Notice.
	(F)	PCI shall fail in any material respect to perform or observe any material term covenant or obligation on its part to be performed or observed under the that certain Guaranty and Indemnification Agreement of even date herewith given by PCI in favor of BT Investor, if (1) such failure is capable of being cured and is not cured within ninety (90) days of PCI receiving notice of such failure, and (2) such failure has a material adverse effect on the economic interests of the BT Investor;
	Any notice given under this Section 10. 8(a)(ii) shall state the date on which the distribution required by Section 10.8(b) hereof shall be made to BT Investor (the "Retirement Date"), which date shall not be earlier than thirty (30) Business Days following the date of such notice.
	(b) *Distributions Upon Retirement of BT Investor's Remaining Interest*
	(i) In the event that BT Investor's Interest is retired pursuant to Sections 10.8(a)(i) or 10.8(a)(ii) hereof, (x) the value of the Company's assets shall be determined in accordance with this Section 10.8(b) and the Gross Asset Values of all Company assets shall be adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.10 hereof as of the day on which the Manager or BT Investor delivers the notice described in Sections 10.8(a)(i) or 10.8(a)(ii) (the "Retirement Allocation Date"), (y) Profits, Losses, and other items of Company income, gain, loss or deduction for the period beginning on the first day of the Allocation Year during which the Retirement Allocation Date occurs and ending on the Retirement Allocation Date (including Profits and Losses resulting from adjustment of the Gross Asset Value of Property) shall be allocated pursuant to Section 3 hereof, and (z) no Profits or Losses for the period beginning on the first day after the Retirement Allocation Date (including Profits or Losses attributable to periods subsequent to the adjustment of Gross Asset Values of Property pursuant to this Section 10.8(b)) shall be allocated to BT Investor (however, other required allocations, including those required by Regulation Section 1.704-1(b)(2)(iv)(f), Section 704(c) of the Code or Section 3.3 shall continue to be made to BT Investor after the Retirement Allocation Date).
	(ii) On the applicable Retirement Date, the Company shall distribute to BT Investor an amount of cash and/or property (as determined pursuant to the following sentence) in an amount equal to the positive balance, if any, in BT Investor's Capital Account immediately after giving effect to the adjustments .and allocations required by Section 10. 8(b)(i) hereof and as reflected on the statement of Capital Accounts provided to the Members pursuant to Section 8.2(c)(ii) hereof and as agreed to by BT Investor. Unless otherwise unanimously agreed by the Members, the distribution to BT Investor under this Section 10. 8(b)(ii) shall consist of an undivided interest in each item of Property other than cash and a proportionate share of the Company's cash (including cash resulting from the sale of Property or the repayment of Permitted Investments) subject to a proportionate share of the Company's liabilities, such undivided interest and proportionate share in each case being equal to the ratio of the balance in BT Investor's Capital Account to the aggregate balances of the Capital Accounts of all of the Members immediately after giving effect to the adjustments and allocations required by Section 10.8(b)(i) hereof and as reflected on the statement of Capital Accounts provided to the Members pursuant to Section 8.2(c)(ii) hereof If the Capital Account balance of the BT Investor is zero or negative, the BT Investor shall receive no distribution, nor shall it assume any liability.
	(iii) For purposes of determining the amount of any adjustment to the Gross Asset Values of Company assets pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.10 hereof, the value of each of the Company's assets on the Retirement Allocation Date will be equal to its Appraised Value. The Appraised Values shown on such appraisal shall be binding upon the Members. The Company shall bear the cost of any appraisal.
	(iv) In conjunction with the retirement of BT Investor pursuant to this Section 10.8, each Member shall have the right to purchase the Property from the Company for its Appraised Value. If more than one Member desires to purchase such Property, the Property shall be auctioned to the highest bidder among such Members, provided that the auction price in all events shall equal or exceed the Appraised Value of the Property.
SECTION 11 POWER OF ATTORNEY
11.1 Manager as Attorneys-In-Fact.
(a) *Appointment.* Each Member hereby makes, constitutes, and appoints the Manager, with full power of substitution and resubstitution, its true and lawful attorney-in-fact for it and in its name, place, and stead and for its use and benefit, to sign, execute, certify, acknowledge, swear to, file, publish and record (i) all certificates of formation, amended name or similar certificates, and other certificates and instruments (including counterparts of this Agreement) which the Manager may deem necessary to be filed by the Company under the laws of the State of Delaware or any other jurisdiction in which the Company is doing or intends to do business; (ii) any and all amendments, restatements or changes to this Agreement and the instruments described in clause (i), as now or hereafter amended, which the Manager may deem necessary to effect a change or modification of the Company in accordance with the terms of this Agreement, including, without limitation, amendments, restatements or changes to reflect (A) the exercise by the Manager of any power granted to it under this Agreement, (B) the admission of any substituted Member and (C) the disposition by any Member of its Interest; (iii) all certificates of cancellation and other instruments which the Liquidator deems necessary or appropriate to effect the dissolution and termination of the Company pursuant to the terms of this Agreement, and (iv) any other instrument which is now or may hereafter be required by law to be filed on behalf of the Company or is deemed necessary by the Manager to carry out fully the provisions of this Agreement in accordance with its terms. Each Member authorizes each such attorney-in-fact to take any further action which such attorney-in-fact shall consider necessary in-connection with any of the foregoing, hereby giving each such attorney-in-fact full power and authority to do and perform each and every act or thing whatsoever requisite to be done in connection with the foregoing as fully as such Member might or could do personally, and hereby ratify and confirm all that any such attorney-in-fact shall lawfully do, or cause to be done, by virtue thereof or hereof.
(b) Form of Signature. To the extent the laws of any jurisdiction in which the Company engages in business require that a Member sign, execute, certify acknowledge, swear to, file, or record a certificate or other document, such certificate or other document shall be executed in the form set forth below:
AMP Funding, Member By: PCI Air Management Corporation attorney-in-fact under Power of Attorney dated November 13, 1995 By:_________________ Title:________________
11.2 Nature of Special Power
The power of attorney granted to each Manager pursuant to this Section 11:
(a) Is a special power of attorney coupled with an interest and is irrevocable;
(b) May be exercised by any such attorney-in-fact by listing the Member executing any agreement, certificate, instrument, or other document with the single signature of any such attorney-in-fact acting as attorney-in-fact for such Member and
(c) Shall survive and not be affected by the subsequent Bankrupt insolvency, dissolution, or cessation of existence of a Member and shall survive delivery of an assignment by a Member of the whole or a portion of its Interest in Company (except that where the assignment is of such Member's entire Interest I the assignee, with the consent of the other Members, is admitted as a substitute Member, the power of attorney shall' survive the delivery of such assignment for sole purpose of enabling any such attorney-in-fact to effect such substitution) shall extend to such Member 's, or assignee's successors and assigns.
SECTION 12 DISSOLUTION AND WINDING UP
12.1 Dissolution Events.
(a) *Dissolution.* The Company shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a " *Dissolution Event* "):
	(i) The unanimous vote of the Members to dissolve, wind up, and liquidate the Company;
	(ii) A judicial determination that an event has occurred that makes it unlawful, impossible or not reasonably practicable to carry on the business of the Company;
	(iii) The Bankruptcy, dissolution, retirement, resignation or expulsion of any Member or the occurrence of any other event which terminates the continued membership of a Member under the Act; provided that any such event will not be deemed a Dissolution Event in the event that there are at least two remaining Members and each remaining Member agrees to continue the business of the Company within ninety (90) days after the occurrence of such an event;
	(iv) The Company shall default in its obligation to retire BT Investor following BT Investor's election to retire its Interest pursuant to Section 10.8(a)(ii) hereof, or
	(v) The passage of twenty years after the formation of the Company.
The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not dissolve prior to the occurrence of a Dissolution Event.
(b) *Reconstitution* . If it is determined, by a court of competent jurisdiction, that the Company has dissolved prior to the occurrence of a Dissolution Event, then within an additional ninety (90) days after such determination (the " *Reconstitution Period"* ), all of the Members may elect to reconstitute the Company and continue its business on the same terms and conditions set forth in this Agreement by forming a new limited liability company on terms identical to those set forth in this Agreement. Unless such an election is made within the Reconstitution Period, the Company shall dissolve and wind up its affairs in accordance with Section 12.2 hereof. If such an election is made within the Reconstitution Period, then:
	(i) The reconstituted limited liability company shall continue until the occurrence of a Dissolution Event as provided in Section 12.l(a);
	(ii) Unless otherwise agreed to by all of the Members, the Certificate and this Agreement shall, subject to any requirement under the Act to file a new certificate of formation, automatically constitute the Certificate and Agreement of such new Company. All of the assets and liabilities of the dissolved Company shall be deemed to have been automatically assigned, assumed, conveyed and transferred to the new Company. No bond, collateral, assumption or release of any Member's or the Company's liabilities shall be required;
provided that the right of the Members to select successor managers and to reconstitute and continue the business of the Company shall not exist and may not be exercised unless the Company has received an opinion of counsel that the exercise of the right would not result in the loss of limited liability of any Member and neither the Company nor the reconstituted limited liability company would cease to be treated as a partnership for federal income tax purposes upon the exercise of such right to continue.
*12.2 Winding Up.*
Upon the occurrence Of (i) a Dissolution Event or (ii) the determination by a court of competent jurisdiction that the Company has dissolved prior to the occurrence of a Dissolution Event (unless the Company is reconstituted pursuant to Section 12. 1(b) hereof), the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company's business and affairs, provided that, to the extent not inconsistent with the foregoing, all covenants contained in this Agreement and obligations provided for in this Agreement shall continue to be fully binding upon the Members until such time as the Property has been distributed pursuant to this Section 12.2 and the Certificate has been canceled pursuant to the Act. The Liquidator shall be responsible for overseeing the winding up and dissolution of the Company, which winding up and dissolution shall be completed within sixty (60) days of the occurrence of the Dissolution Event and within ninety (90). days after the-last day on which the Company may be reconstituted pursuant to Section 12. l(b) hereof The Liquidator shall take full account of the Company's liabilities and Property and shall cause the Property or the proceeds from the sale thereof (as determined pursuant to Section 12.10 hereof), to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order:
(a) First, to creditors (other than the Manager but including other Members who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Company's Debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for distribution to Members under Section 18-601 or 18-604 of the Act;
(b) Second, to the Manager, in its capacity as a creditor of the Company,' in satisfaction of all of the Company's debts and liabilities (whether by payment or the making of reasonable provision for payment thereof);
(c) Third, except as provided in this Agreement, to Members and former Members of the Company in satisfaction of liabilities for distribution under Sections 18-601 or 18-604 of the Act; and
(d) The balance, if any, to the Members in accordance with the positive balance in their Capital Accounts, after giving effect to all contributions, distributions and allocations for all periods.
Except as provided in Section 12.9, no Member or Manager shall receive additional compensation for any services performed pursuant to this Section 12. The Manager understands and agrees that by accepting the provisions of this Section 12.2 setting forth the priority of the distribution of the assets of the Company to be made upon its liquidation, the Manager expressly waives any right which it, as a creditor of the Company, might otherwise have under the Act to receive distributions of assets pari passu with the other creditors of the Company in connection with a distribution of assets of the Company in satisfaction of any liability of the Company, and hereby subordinates to said creditors any such right.
12.3 Compliance With Certain Requirements of Regulations; Deficit Capital Accounts.
In the event the Company is "liquidated" within the meaning of Regulations Section 1.704- l(b)(2)(ii)(g), distributions shall be made pursuant to this Section 12 to the Members who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2). If any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all Allocation Years, including the Allocation Year during which such liquidation occurs), such Member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever. In the discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be made to the Members pursuant to this Section 12 may be:
(a) Distributed to a trust established for the benefit of the Members for the purposes of liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or unforeseen liabilities or obligations of the Company. The assets of any such trust shall be distributed to the Members from time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Members pursuant to Section 12.2 hereof; or
(b) Withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Company, provided that such withheld amounts shall be distributed to the Members as soon as practicable.
12.4 Deemed Distribution and Recontribution.
Notwithstanding any other provision of this Section 12, in the event the Company is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred, the Property shall not be liquidated, the Company's Debts ad other liabilities shall not be paid or discharged, and the Company's affairs shall not be wound up. Instead, solely for federal income tax purposes, the Company shall be deemed to have taken subject to all Debts of the Company and other liabilities all in accordance with their respective Capital Accounts Immediately thereafter, the Members shall be deemed to have recontributed the Property in-kind to the Company, which shall be deemed to have taken subject to all such liabilities.
12.5 Rights of Members.
Except as otherwise provided in this Agreement, each Member shall look solely to the Property of the Company for the return of its Capital Contribution and has no right or power to demand or receive Property other than cash from the Company. If the assets of the Company remaining after payment or discharge of the debts or liabilities of the Company are insufficient to return such Capital Contribution, the Members shall have no recourse against the Company, the Manager or any other Member.
12.6 Notice of Dissolution/Termination.
(a) In the event a Dissolution Event occurs or an event ocurs that would, but for provisions of Section 12.1, result in dissolution of the Company, the Manager shall, within thirty (30) days thereafter, provide written notice thereof to each of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Manager) and shall publish notice thereof in a newspaper of general circulation in each place in which the Company regularly conducts business (as determined in the discretion of the Manager).
(b) Upon completion of the distribution of the Company's Property as provided in this Section 12, the Company shall be terminated, and the Liquidator shall cause the filing of the Certificate of Cancellation pursuant to Section 18-203 of the Act and shall take all such other actions as may be necessary to terminate the Company.
12.7 Allocations and Distributions During Period of Liquidation.
During the period commencing on the first day of the Fiscal Year during which a Dissolution Event occurs and ending on the date on which all of the assets of the Company have been distributed to the Members shall continue to share Profits, Losses, gain, loss and other items of Company income, gain, loss or deduction in the manner provided in Section 3 hereof but no distributions pursuant to Section 4 hereof shall be made out withstanding the satisfaction of the PCJL Note.
12.8 Character of Liquidating Distributions.
All payments made in liquidation of the Interest of a Member in the Company shall be made in exchange for the Interest of such Member in Property pursuant to Section 736(b)(1) of the Code, including the interest of such Member in Company goodwill.
*12.9 The Liquidator.*
(a) *Definition.* The " *Liquidator* " shall be the Manager, provided that, in the event of the Bankruptcy of the Manager or a material breach of a representation or warranty or obligation of the Manager, the BT Investor or its designee shall be the " *Liquidator* " and shall have the power of attorney granted to the Manager pursuant to Section 11 hereof.
(b) *Fees* . The Company is authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this Section 12 and to reimburse the Liquidator for its reasonable costs and expenses incurred in performing those services.
(c) *Indemnification.* The Company shall indemnify, save harmless, and pay all judgments and claims against the Liquidator or any officers, directors, stockholders, agents or employees of the Liquidator relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Liquidator, or any officers, directors, agents or employees of the Liquidator in connection with the winding up of the Company, including reasonable attorneys' fees incurred by the Liquidator, officer, director, agent or employee in 'connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, except to the extent such liability or damage is caused by the fraud, intentional misconduct of, or a knowing violation of the laws by the Liquidator which was material to the cause of action.
12.10 Form of Liquidating Distributions.
Unless otherwise unanimously agreed by the Members, the distribution to the Members under this Section 12 shall consist of an undivided interest in each item of Property other than cash and a proportionate share of the Company's cash (including cash resulting from the sale of Property or the repayment of Permitted Investments), such undivided interest and proportionate share in each case being equal to the ratio of the balance in each Member's Capital Account to the aggregate balances of the Capital Accounts of all of the Members.
SECTION 13 MISCELLANEOUS
13.1 Notices.
Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered, given, and received for all purposes (i) as of the date so delivered, if delivered personally to the Person or to an officer of the Person to whom the same is directed, or (ii) when the same is actually received, if sent either by overnight courier, registered or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by overnight courier, charges prepaid and addressed as follows, or to such other address as such Person may from time to time specify by notice to the Members:
(a) If to the Company, to the address set forth in Section 1.4 hereof;
(b) If to the Manager, to the address set forth in Section 1.4 hereof;
(c) If to a Member, to the address set forth in Section 2.1 hereof.
13.2 Binding Effect.
Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns.
13.3 Construction.
Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Member. The terms of this Agreement are intended to embody the economic relationship among the Members and shall not be subject to modification by, or be conformed with, any actions by the Internal Revenue Service except as this Agreement may be explicitly so amended and except as may relate specifically to the filing of tax returns.
13.4 Time.
In computing any period of time pursuant to this Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included, but the time shall begin to run on the next succeeding day. The last day of the period so computed shall be included, unless it is not a Business Day, in which event the period shall run until the end of the next day which is a Business Day.
13.5 Headings.
Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof.
13.6 Severability.
Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The preceding sentence of this Section 13.6 shall be of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Member to lose the material benefit of its economic bargain.
13.7 Incorporation by Reference.
No exhibit, schedule or other appendix attached to this Agreement and referred to herein is incorporated in this Agreement by reference unless this Agreement expressly otherwise provides.
13.8 Variation of Terms.
All terms and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
13.9 Governing Law.
The laws of the State of Delaware shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the fights and duties arising hereunder.
13.10 Waiver of Jury Trial.
Each of the Members irrevocably waives, to the extent permitted by law, all rights to trial by jury and all rights to immunity by sovereignty or otherwise in any action, proceeding or counterclaim arising out of or relating to this Agreement.
13.11 Counterpart Execution.
This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and-shall constitute one agreement.
13.12 Sole and Absolute Discretion.
Except as otherwise provided in this Agreement (including Section 5 hereof), all actions which the Manager may take and all determinations which the Manager may make pursuant to this Agreement may be taken and made at the sole and absolute discretion of the Manager.
13.13 Specific Performance.
Each Member agrees with the other Members that the other Members would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the nonbreaching Members may be entitled, at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof.
13.14 Holding Company Eligible Activities and Holding Company Eligible Assets/Banking Laws and Regulations.
(a) It is the intention of the Members that the Company will engage only in Holding Company Eligible activities and will invest only in Holding Company Eligible assets. In furtherance therewith, the Members hereby acknowledge that the Company is subject to federal banking laws and regulations and to supervision and examination by the Board of Governors of the Federal Reserve System.
(b) In the event that it becomes unlawful or otherwise prohibited for any of the Members to continue to be members of the Company or any of the Members become subject to federal banking laws and regulations which materially restrict such Members ability to conduct its business in the ordinary course, to the extent possible, the Members agree to negotiate in good faith to amend this Agreement so as to comply with any legal and/or regulatory requirements and to minimize the adverse financial impact of such laws or regulations.
13.15 No Material Impairment.
No Member shall take any action that could impair materially such Member's ability to perform its duties and obligations under this Agreement.
IN WITNESS WHEREOF , the parties have executed and entered into this Operating Agreement of the Company as of the day first above set forth.
[signatures follow on separate pages]
			MEMBERS: PCI AIR MANAGEMENT CORPORATION By: /s/ GARY R. CORRELL Title: Vice President
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF RAMP INVESTMENTS, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MEMBER.
			MEMBERS (CONTINUED): AMP FUNDING, L.L.C. By: /s/ GARY R. CORRELL Gary R. Correll Title: Executive Manager
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF RAMP INVESTMENTS, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MEMBER.
			MEMBERS (CONTINUED): AM-BT NEVADA, INC. By: James H. Stallkamp Title: By: /s/ THOMAS FINLEY, JR. Thomas Finley, Attorney-in-Fact
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF RAMP INVESTMENTS, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MEMBER.
			MANAGER: PCI AIR MANAGEMENT CORPORATION By: /s/ GARY R. CORRELL Title: Vice President
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF RAMP INVESTMENTS, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MANAGER.
			MEMBERS: PCI AIR MANAGEMENT CORPORATION By: /s/ LESLIE C. ZIMBERG Title: Vice President
THIS IS A SIGNATURE PAGE TO THE OPERATING AGREEMENT OF RAMP INVESTMENTS, L.L.C. AND IS EXECUTED BY THE PARTY NAMED ABOVE IN ITS CAPACITY AS A MEMBER.

SCHEDULE A TO OPERATING AGREEMENT OF RAMP INVESTMENTS, L.L.C.
Year	Aircraft	Serial Number	FAA Reg. #	Non-Recourse Debt	Gross Asset Value
1974	Lockheed L-1011-50	1072	SE-DPP	0	2,220,175
1974	Lockheed L-1011-50	1091	SE-DPX	0	2,220,175
1975	Lockheed L-1011-50	1107	N81027	0	2,655,148
1972	Boeing 747-238B	20527	N78019	0	30,963,382
1979	Fokker F-28 4000	11152	N490US	0	1,220,506
1980	Fokker F-28 4000	11161	N493US	0	1,255,938
1978	Boeing 747-238B	21657	N164UA	22,448,747	39,961,388
1973	McDonnell Douglas DC-10-30	46576	N19072	0	28,813,798
1973	McDonnell Douglas DC-10-30	47864	N14063	0	28,813,798
1974	McDonnell Douglas DC-10-30	46940	N76073	0	32,856,955
1976	Boeing 747-200B	21162	N511P	0	16,069,344
1976	Boeing 747-200B	21316	N/A	0	15,800,084
1974	Lockheed L-1011-100	1098	N81025	0	2,725,978
1975	Lockheed L-1011-100	1104	N81026	0	2,826,985
1975	Lockheed L-1011-100	1108	N81028	0	2,826,985
1975	Lockheed L-1011-100	1111	N31030	0	2,826,986
1979	McDonnell Douglas DC-10-30	46590	N68065	0	30,379,332
1982	McDonnell Douglas MD-82	48056	N83870	0	19,097,483
1978	Boeing 747-238B	21658	N165UA	20,615,888	39,307,168
TOTALS				43,064,635	302,841,608

EXHIBIT A TO OPERATING AGREEMENT OF RAMP INVESTMENTS, L.L.C. Aircraft Lease Documents
The following documents are the " *Aircraft Lease Documents* " referred to in the Operating Agreement:
1.		Assignment and Assumption Agreement No. 2, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N78019.
2.		Assignment and Assumption Agreement No. 2, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N490US.
3.		Assignment and Assumption Agreement No. 2, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N493US.
4.		Assignment and Assumption Agreement No. 2, dated as of November __, 1995, from AMP Funding, LL.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N164UA.
5.		Assignment and Assumption Agreement No. 2, dated as of November __, 1995, from AMP Funding, L.L.C, as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N83870.
6.		Assignment and Assumption Agreement No. 2, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C, as Assignee, relating to the Aircraft bearing Registry No. N165UA.
7.		Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C, as Assignee, relating to the Aircraft bearing FAA Registry No. N511P.
8.		Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N31030.
9.		Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81026.
10.		Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81025.
11.		Assignment and Assumption Agreement No. 2, dated as of November 13, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81028.
12.		Assignment and Assumption Agreement No. 2, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. TF-ABZ.
13.		Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N511P.
14.		Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N31030.
15.		Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C, as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81026.
16.		Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81025.
17.		Assignment and Assumption Agreement No. 3, dated as of November 13, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81028.
18.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. TF-ABZ.
19.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N19072.
20.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N76073.
21.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N14063.
22.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from RAMP Investments, L.L.C.,as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N78019.
23.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81027.
24.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. SE-DPX..
25.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from AMP Funding, L.L.C., as Assignor, to RAMP Investments, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. SE-DPP.
26.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from RAMP Investments L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N490US.
27.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N493US.
28.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from RAMP Investments, L.L.C, as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N164UA.
29.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from AMP Funding, Inc., as Assignor, to RAMP Investments L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N68065.
30.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N83870.
31.		Assignment and Assumption Agreement No. 3, dated as of November __, 1995, from RAMP Investments, L.L.C, as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N165UA.
32.		Assignment and Assumption Agreement No. 4, dated as of November __, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C. as Assignee, relating to the Aircraft bearing FAA Registry No. N19072.
33.		Assignment and Assumption Agreement No. 4, dated as of November __, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C. as Assignee, relating to the Aircraft bearing FAA Registry No. N76073.
34.		Assignment and Assumption Agreement No. 4, dated as of November __, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C. as Assignee, relating to the Aircraft bearing FAA Registry No. N14063.
35.		Assignment-and Assumption Agreement No. 4, dated as of November 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No. N81027.
36.		Assignment and Assumption Agreement No. 4, dated as of November __, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. SE-DPX.
37.		Assignment and Assumption Agreement No. 4, dated as of November __, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing Registry No. SE-DPP.
38.		Assignment and Assumption Agreement No. 4, dated as of November, 1995, from RAMP Investments, L.L.C., as Assignor, to PCI Air Management Partners, L.L.C., as Assignee, relating to the Aircraft bearing FAA Registry No: N68065.
39.		Consent, Waiver and Agreement N76073, dated as of November __, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
40.		Consent, Waiver and Agreement N 14063, dated as of November __, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
41.		Consent, Waiver and Agreement N19072, dated as of November __, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
42.		Consent, Waiver and Agreement N68065, dated as of November __, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
43.		Consent, Waiver and Agreement N83870, dated as of November __, 1995, among (i) Continental Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
44.		Consent, Waiver and Agreement N165UA, dated as of November __, 1995, among (i) United Air Lines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
45.		Consent, Waiver and Agreement N164UA, dated as of November __, 1995, among (i) United Air Lines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.LC. and (v) PCI Air Management Partners, L.L.C.
46.		Consent, Waiver and Agreement N493US, dated as of November __, 1995, among (i) USAir, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
47.		Consent, Waiver and Agreement N78019, dated as of November __, 1995, among (i) Continental Micronesia Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.LC., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
48.		Consent, Waiver and Agreement N490US, dated as of November __, 1995, among (i) USAir, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
49.		Consent, Waiver and Agreement N81027, dated as of November __, 1995, among (i) Trans World Airlines, Inc., (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
50.		Consent, Waiver and Agreement SE-DPX, dated as of November __, 1995, among (i) Internationale Nederlanden Aviation Lease B.V., (ii) Internationale Nederlanden Lease Holding N.V., (iii) Potomac Capital Investment Corporation, (iv) AMP Funding, L.L.C., (v) RAMP Investments, L.L.C. and (vi) PCI Air Management Partners, L.L.C.
51.		Consent, Waiver and Agreement SE-DPP, dated as of November __., 1995, among (i) Internationale Nederlanden Aviation Lease B.V., (ii) Internationale Nederlanden Lease Holding N.V., (iii) Potomac Capital Investment Corporation, (iv) AMP Funding, L.L.C., (V) RAMP Investments, L.L.C. and (vi) PCI Air Management Partners, L.L.C.
52.		Consent, Waiver and Agreement N493US, dated as of November, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
53.		Consent, Waiver and Agreement N164UA, dated as of November __, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments; L.L.C. and (v) PCI Air Management Partners, L.L.C.
54.		Consent, Waiver and Agreement N165UA, dated as of November __, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
55.		Consent, Waiver and Agreement N490US, dated as of November __, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C and (v) PCI Air Management Partners, L.L.C.
56.		Consent, Waiver and Agreement N83870, dated as of November __, 1995, among (i) First Security Bank of Utah, National Association, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
57.		Consent, Waiver and Agreement N164UA, dated as of November __, 1995, among (i) The Bank of New York, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
58.		Consent, Waiver and Agreement N78019, dated as of November __, 1995, among (i) Wilmington Trust Company, as Owner Trustee, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
59.		Consent, Waiver and Agreement N165UA, dated as of November __, 1995, among (i) The Nippon Credit Bank, Ltd., Los Angeles Agency, as Agent and Lender, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C and (v) PCI Air Management Partners, L.L.C.
60.		Consent, Waiver and Agreement N165UA, dated as of November __, 1995, among (i) Den Norske Bank AS, London Branch, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
61.		Consent, Waiver and Agreement N164UA, dated as of November __, 1995, among (i) The United Bank of Kuwait PLC, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.
62.		Consent, Waiver and Agreement N164UA, dated as of November __, 1995, among (i) National Canada Corporation, (ii) Potomac Capital Investment Corporation, (iii) AMP Funding, L.L.C., (iv) RAMP Investments, L.L.C. and (v) PCI Air Management Partners, L.L.C.

EXHIBIT B

FORM OF CONTRIBUTION AGREEMENT

dated as of

November 13, 1995

between

AMP FUNDING, L.L.C.

Contributor

and

RAMP INVESTMENTS, L.L.C.

Contributee

CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this " Agreement ") dated as of November 13, 1995, between AMP Funding, L.L.C., a limited liability Company organized under the laws of the State of Delaware (the " Contributor "), and RAMP Investments, L.L.C. a limited liability company organized under the laws of the State of Delaware (the " Contributee ").
RECITALS
The Contributor wishes to contribute to the Contributee effective as of November 13, 1995 (the " Original Contribution Date ") the Original Assets (as defined in Section 1.01(a) below), and the Contributee has agreed to accept such contribution, subject to the terms and conditions of this Agreement. On or before the 90th day after the Original Contribution Date, the Contributor wishes to contribute to the Contributee effective as of a date agreed on by the parties (the " Additional Contribution Date " and together with the Original Contribution Date, a "Contribution Date") all or a portion of the Additional Assets (as defined in Section 1.01(b) below), subject to the terms and conditions of this Agreement.
In consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, the Contributor and the Contributee hereby agree as follows:
ARTICLE 1. CONTRIBUTION OF ASSETS
1.01 Contribution of Assets .
(a) Subject to the terms and conditions of this Agreement, on the Original Contribution Date, the Contributor shall assign and deliver to the Contributee all of its right, title and interest in and to the following:
	(i) all of the outstanding shares (the " AIMC Shares ") of common stock of Aircraft International Management Corporation, a Delaware corporation (" AIMC ");
	(ii) the Trust Agreements described in Schedule 1.0l(a) attached hereto (the " Original Trust Agreements ");
	(iii) each of the trusts created under the Original Trust Agreements and each Trust Estate (as defined in each of the Original Trust Agreements); and
	(iv) any existing deposits, reserve accounts, or receivables held under or pursuant to any of the foregoing (all such right, title and interest in the agreements and property referred to in clauses (i) through (iv) collectively, the " Original Assets ").
(b) Subject to the terms and conditions of this Agreement, on the Additional Contribution Date, the Contributor shall assign and deliver to the Contributee all of its right, title and interest in and to all or a portion (provided such portion consists of all of the following assets related to any Trust Estate included in such portion) of the following:
	(i) the Trust Agreements described in Schedule 1.01(b) attached hereto (the " Additional Trust Agreements " and together with the Original Trust Agreements, the " Trust Agreements ");
	(ii) each of the trusts created under the Additional Trust Agreements and each Trust Estate (as defined in each of the Additional Trust Agreements); and
	(iii) any existing deposits, reserve accounts, receivables held under or pursuant to any of the foregoing (all such right, title and interest in the agreements and property referred to in clauses (i) through (iii) collectively, the " Additional Assets " and together with the Original Assets, the " Assets ").
No contributions of Additional Assets shall occur pursuant hereto after the 90th day after the date hereof. All rents and other amounts payable to lessor under the three aircraft leases subject to the Additional Trust Agreements in items 6, 9 and 10 of Part II of Schedule 1.01(c) hereof shall accrue to Contributee from and after November 30, 1995, regardless of when the Additional Contribution Date for such Additional Trust Agreements occurs and, to the extent of any payment thereof to Contributor on or prior to the Additional Contribution Date, Contributor shall contribute such amount to Contributee on the Additional Contribution Date for such Additional Assets.
(c) The assignment of the Assets pursuant to Section 1.01(a) and (b) shall be evidenced by the Assignment and Assumption Agreements described in Schedule 1.01(c) attached hereto (collectively, the " Assignment Agreements ") which shall be effective as of the Original Contribution Date or any Additional Contribution Date, as the case may be, and delivered by the Contributor on the Original Contribution Date or any Additional Contribution Date, as the case may be.
(d) In the event the Contributor is unable to obtain all relevant consents to the transfer contemplated by any of the Assignment Agreements listed in Part II of-Schedule 1.01(c), the Contributor, with the prior written consent of each of the parties specified in Section 5.01 hereof, may substitute for any of the Aircraft listed in Schedule 1.01(d) hereto any other Trust Agreement (and all related property, rights, instruments and agreements) relating to an aircraft of comparable value as the Aircraft being substituted.
ARTICLE 2. EVENTS OCCURRING ON THE CONTRIBUTION DATE
2.01 Deliveries by Contributor . In addition to the Assets to be contributed to the Contributee on a Contribution Date, the Contributor shall deliver the following to the Contributee on the Contribution Date, each in form and substance satisfactory to the Contributee and, unless otherwise agreed in writing by the Contributee, dated the Contribution Date:
	(i) A copy of the resolutions of the Contributor's members, certified by the executive manager of the Contributor, authorizing or ratifying its execution, delivery and performance of this Agreement, each Assignment Agreement and the other documents to be delivered hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby;
	(ii) A certificate of all of the members of the Contributor certifying (a) the names and true signatures of the executive manager of the Contributor authorized to sign this Agreement, each Assignment Agreement and the other documents to be delivered hereunder and thereunder and (b) that attached thereto are true and correct copies of the Contributor's articles of organization and operating agreement, in each case as in effect on the Contribution Date;
	(iii) Favorable opinions of counsel for the Contributor; and
	(iv) Such other approvals, opinions and documents as the Contributee may reasonably request as to the legality, validity, binding effect or enforceability of this Agreement or any Assignment Agreement.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR
Contributor hereby represents and warrants as of each Contribution Date that:
3.01 Title to Assets . The Contributor has good and marketable title to all of the Assets transferred on such Contribution Date free and clear of all obligations, liens, pledges, claims, rights of first refusal, options, charges, security interests, mortgages or other encumbrances of any nature whatsoever (collectively, the " Asset Encumbrances "), other than any Asset Encumbrance arising solely in favor of the Contributee from the transactions contemplated hereby and by the Assignment Agreements.
3.02 Organization . The Contributor is a limited liability company validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties and assets now owned or leased by it or the nature of the business transacted by it requires it to be so qualified, except where the failure to be so qualified, individually or in the aggregate, would not have a material adverse effect upon the business or financial condition of the Contributor or upon the transactions contemplated by this Agreement.
3.03 Authority . The Contributor has the power and authority to carry on its business as now conducted, to own or hold under lease its properties, and to execute and deliver this Agreement and each Assignment Agreement and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Contributor of this Agreement and each Assignment Agreement have been duly authorized by all necessary action; and each of this Agreement. And each Assignment Agreement has been duly executed and delivered by the Contributor and is the legal, valid and binding obligation of the Contributor enforceable against the Contributor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, receivership, conservatorship, reorganization, liquidation, moratorium or similar events affecting the Contributor or its assets, or by general principles of equity.
3.04 No Consents ; No Violations .
(a) No authorization, approval or other action by, and no notice to or filing with, any governmental, regulatory or legal authority or any other person is required for the due execution, delivery and performance by the Contributor of this Agreement or any Assignment Agreement or the consummation of the transactions contemplated hereby or thereby.
(b) The execution, delivery and performance of this Agreement and any Assignment Agreement and the consummation of the transactions contemplated hereby and thereby do not and will not result in any contravention of (i) the articles of organization or operating agreement of the Contributor or the articles of incorporation or by-laws of AIMC, (ii) any applicable-law, rule or regulation of any Federal, state or local governmental or regulatory authority, (iii) any order, writ, injunction, judgment, decree or award of any court, arbitrator, or governmental or regulatory authority to which the Contributor or AIMC or any of their properties are subject, (iv) any mortgage, contract, agreement, deed of trust, license, lease or other instrument, arrangement, commitment, obligation, understanding or restriction of any kind to which the Contributor or AIMC is a party or by which any of their properties are bound, or (v) the Operative Documents (as defined in Section 3.06(a) below).
3.05 Litigation . Other than as disclosed in writing to the parties hereto by the Contributor, there is no pending or known threatened action or proceeding before any court, governmental agency or arbitrator by or against, or involving the Contributor or any of its Affiliates, any of its property or any of its members, managers or employees which questions or challenges the validity or enforceability of this Agreement or any Assignment Agreement, or any action taken or to be taken by the Contributor pursuant to this Agreement or any Assignment Agreement or in connection with the transactions contemplated hereby or thereby.
3.06 Representations Regarding Documents .
(a) This Agreement, the Trust Agreements, the Assignment Agreements and the Assigned Documents (as defined in the related Assignment Agreement) (collectively, the " Operative Documents ") constitute all of the material agreements to which the Contributor, the applicable Trustee (as defined in the applicable Trust Agreement) and/or the applicable Lessee (as defined in the applicable Lease), if any, is a party relating to each of the Aircraft (as listed on Schedule 3.06 hereto) that remain in full force and effect as of the Contribution Date. Each such Operative Document is in full force and effect and has not been modified or amended.
(b) Each Trust Estate is free and clear of any Asset Encumbrance created or incurred, directly or indirectly, by the Contributor, and, to the knowledge of the Contributor, each Trust Estate is free and-clear of any Asset Encumbrance.
(c) Each Trustee has good and marketable title to the applicable Aircraft in each case, free and clear of any Asset Encumbrance other than the Master Leasing Agreement dated as of November 13, 1995, by and among the applicable Trustee and PCI Air Management Partners, L.L.C., a Delaware limited liability company, any applicable sublease specified in an Assignment Document, and in the case of Aircraft bearing FAA Registration Nos. N164UA and N165UA, the lien of the related Security Agreement (as defined in the applicable sublease).
(d) There is no obligation or covenant to be performed by the Contributor under any Trust Agreement or any other Operative Document and no obligation or covenant of the Contributor which has accrued, on or prior to the date hereof which has not been fully performed, and Contributor shall indemnify and hold harmless-the Contributee from and against any claim, loss, liability or expense incurred by Contributee attributable to any such obligation or covenant-which has not been so performed or which has so occurred.
(e) There are no defaults and no events which, with the giving of notice or lapse of time or both, would constitute a default by the Contributor under any Trust Agreement or any other Operative Document and to the knowledge of the Contributor, there are no material defaults and no events which, with the giving of notice or lapse of time or both, would constitute a default by any Trustee under any Trust Agreement or any other Operative Document to which any Trustee is a party.
(f) All rent due and owing as of any Additional Contribution Date under any lease of any Aircraft included in the Trust Estate for any Trust Agreement contributed to Contributee on any Additional Contribution Date for any period subsequent to the date for payment under such lease has not, and will not have, been collected for more than one (1) month in advance and payment thereof has not, and on such Additional Contribution Date will not have, been anticipated, waived, released, discounted, set off or otherwise discharged or compromised; no supplemental rent has, or on such Additional Contribution Date will have, been paid or is or on such Additional Contribution Date will be due and owing under any such lease; and as of November 30, 1995, the aggregate amount of basic rent scheduled to be due and owing under the three aircraft lease agreements directly or indirectly included in the Additional Assets as items 6, 9 and 10 on Part II of Schedule 1.01(c) attached hereto (which three lease agreements are not covered by a master lease) is $384,389.00.
3.07 Solvency of Contributor . The Contributor was solvent immediately prior to the execution of this Agreement and will not, as a result of the transactions contemplated hereby, be rendered insolvent.
3.08 Obligations of the Contributor. Other than as specifically set forth in the Trust Agreements and the other Operative Documents, the Contributor has no obligations, duties or liabilities under or with respect thereto.
3.09 No Waiver . Except for consents to which the Contributee is a party and those listed on Schedule 3.09, the Contributor has not entered into or given any written waivers, consents, supplements, or modifications of the Trust Agreements or any other Operative Document and has not entered into or given any waivers or consents with respect to any of the Aircraft.
3.10 No Event of Loss. To the knowledge of the Contributor, neither an "Event of Loss" (as such term is defined in the applicable sublease) nor any event which with the passage of time would constitute such an Event of Loss has occurred with respect to the Aircraft covered by such sublease.
3.11 No Broker . Except for fees payable to Bankers Trust Company, the Contributor is not obligated to pay, and has not retained any broker or finder or other person who is entitled to, any broker's or finder's fee or other commission based upon the consummation of the transactions contemplated by this Agreement, any other Operative Agreement or any other agreement contemplated thereby.
3.12 AIMC Shares.
(a) The authorized capital stock of AIMC consists of 10,000 shares of common stock (the " AIMC Common Stock "), par value $1.00 per share, of which 5,000. Shares are issued and outstanding, all of which are the AIMC Shares and are owned of record and beneficially by Contributor. The AIMC Shares have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive rights. There is no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge or other disposition of any shares of AIMC Common Stock or of any other capital stock of AIMC or any securities convertible into, or other rights to acquire, any such shares of AIMC Common Stock or other capital stock of AIMC or (ii) relates to the voting or control of such AIMC Common Stock, capital stock, securities or rights. No person has any right to require AIMC to register any of its securities under the. Securities Act of 1933, as amended (the " Securities Act ").
(b) AIMC is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as presently conducted, AIMC is duly qualified as a foreign corporation, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease requires it to be so qualified. Attached hereto as Exhibit 3.12b) is a complete and correct copy of AIMC's certificate of incorporation, as amended to date, certified by the Secretary of the State of Delaware, and AIMC's bylaws, as currently in effect.
(c) The transfer of the AIMC Shares to Contributee pursuant to this Agreement will vest in Contributee legal and valid title to the AIMC Shares, free and clear of all Asset Encumbrances.
(d) Attached as Exhibit 3.12(d)(i) is a copy of the unaudited balance sheet and income statement of AIMC as of October 31, 1995, which fairly presents the financial position and accurately reflects the assets and liabilities of AIMC-as of such date. AIMC has no subsidiaries. AIMC has valid legal and beneficial title to all of the shares of preferred stock set forth on Exhibit 3.12(d) (ii) attached hereto free and clear of all Asset Encumbrances. As of the date hereof, AIMC has net worth of at least $212,000,000.
(e) AIMC has no debts, obligations or liabilities of any kind or nature, either direct or indirect, absolute or contingent, matured or unmatured, known or unknown, including, without limitation, liabilities or obligations with respect to any federal, state, local and foreign income, franchise, excise, sales or use taxes.
(f) AIMC has complied in all material respects with all laws, statutes, rules, regulations, judgments, decrees and orders applicable to its business or operations including, without limitation, any of the above which relate to the environment.
ARTICLE 4 SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
4.01. Survival. The representations and warranties of the Contributor contained in Article 3 hereof shall survive the Contribution Date and the delivery and acceptance of the Assignment Agreements.
4.02 Transfer Taxes. The Contributor shall pay, or cause to be paid, all sales taxes, use taxes, transfer taxes, and recording fees (and any interest and penalties related thereto "Taxes"), imposed on or applicable to the transfers of the Assets by (i) Contributor to Contributee pursuant to this Agreement, except for Taxes attributable solely to the actions or inactions of Contributee, (ii) Contributee to RAMP Investments, L.L.C., except for Taxes attributable solely to the actions or inactions of RAMP Investments, L.L.C., or (iii) RAMP Investments, L.L.C. to PCI Air Management Partners, L.L.C., except for Taxes attributable solely to the actions or inactions of PCI Air Management Partners, L.L.C.
4.03 Indemnification. Contributor shall indemnify and hold harmless the Contributee and PCI Air Management Partners, L.L.C. from and against any and all claims, losses, liabilities and damages, including, without limitation, amounts paid in settlement, reasonable costs of investigation and reasonable fees and disbursements of counsel, arising out of or resulting from the inaccuracy of any representation or warranty, or the breach of any covenant or agreement, contained herein or in any of the Assignment Agreements or in any instrument or certificate delivered pursuant hereto.
ARTICLE 5 MISCELLANEOUS PROVISIONS
5.01 Amendment and Modification. This Agreement may be amended, modified or supplemented only by written agreement of the parties hereto and with the prior written consent-of AM-BT Nevada, Inc. ("BT").
5.02 Waiver of Compliance; Consents. Any failure of a party to comply with any obligation, covenant, agreement or condition herein may be waived by the other party; provided, however, that any such waiver may be made only by a written instrument signed by the party granting such waiver and consented to in writing by BT, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 5.02, with appropriate notice in accordance with Section 5.08 of-this Agreement.
5.03 Assignment This Agreement and all of the provisions hereof shall be binding upon the parties hereto and their respective successors and permitted assigns and shall inure to the benefit of BT, the parties hereto, their respective successors and permitted assigns. Any party may assign any of its rights hereunder, but no such assignment shall relieve it of its primary liability for its obligations hereunder. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person other than BT, the parties hereto, any successors and permitted assigns any rights, remedy or Claim under or by reason of this Agreement or any provision herein contained.
5.04 Expenses. In the event that the transactions contemplated by this Agreement are consummated, all fees and expenses (including all fees of counsel and accountants) incurred by any party in connection with the negotiation and execution of this Agreement and any Assignment Agreement shall be borne by the Contributor and BT. Any such fees and expenses not so authorized to be paid by the Contributor and BT shall be borne by the party who incurred them.
5.05 Further Assurances. From time to time, at the request of the Contributor or BT and without further consideration, each party, at its own expense, will execute and deliver such other documents, and take such other action, as the Contributor or the Contributee may reasonably request in order to consummate more effectively the transactions contemplated hereby and to vest in Contributee and its successors and assigns good and marketable title to the Assets.
5.06 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to its conflicts of law doctrines). The Contributor and the Contributee each (i) irrevocably submits to the jurisdiction of any New York State court or federal court sitting in New York City in any action arising out of this Agreement or any Assignment Agreement or any instrument or document delivered hereunder or thereunder, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of inconvenient forum, and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court.
5.07 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become a binding Agreement when one or more of the counterparts have been signed by each of the parties and delivered to the other party.
5.08 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed by registered or certified mall (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):
	If to the Contributor: 1575 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator
	with a copy to: Sierra Corporate Services 241 Ridge Street Reno, Nevada Attention: Contracts Administrator
	If to the Contributee: 1575 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator
	with a copy to: Sierra Corporate Services 241 Ridge Street Reno, Nevada Attention: Contracts Administrator
	and a copy to: AM-BT Nevada, Inc. c/o Lionel Sawyer & Collins 1700 Bank of America-Plaza 300 South Fourth Street Las Vegas, Nevada 89101
5.0.9 Headings. The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
5.10 Entire Agreement. This Agreement, including the exhibits, schedules, other documents and instruments referred to herein, together with the Assignment Agreements, embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
5.11 Severability. If any one or more provisions contained in this Agreement shall, for any reason, be held to be invalid., illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
5.12 Schedules. All Schedules attached hereto are hereby incorporated herein and made a part hereof as if set forth in full herein.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
		AMP FUNDING, L.L.C. By: Title:
		RAMP INVESTMENTS, L.L.C. By: PCI AIR MANAGEMENT CORPORATION, as Manager By: Title:

SCHEDULE 1.01(a)

4. Trust Agreement (N81028) dated as of November 7, 1995 between PCIC, as Owner. Participant, and WTC, as Owner Trustee, as supplemented by the Supplement to Trust Agreement No. 1 (N81028), dated as of November 13, 1995, between WTC and PCIC.

SCHEDULE 1.01(b)

1. Trust Agreement (N81027), dated as of November __, 1995, between Wilmington Trust Company (" WTC "), as Owner Trustee, and Potomac Capital Investment Corporation (" PCIC "), as supplemented by the Supplement to Trust Agreement No. 1 (N81027), dated as of November __, 1995, between WTC, as Owner Trustee, and PCIC.

2. Trust Agreement (SE-DPP), dated as of November__, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (SE-DPP), dated as of November __, .1995, between WTC and PCIC.

3. Trust Agreement (SE-DPX), dated as of November __, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (SE-DPX), dated as of November __, 1995, between WTC and PCIC.

4. Trust Agreement (N76073), dated as of November __, 1.995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (N76073), dated as of November ., 1995, between WTC and PCIC.

5. Trust Agreement (N14063), dated as of November __, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (14063), dated as of November __, 1995, between WTC and PCIC.

6. Trust Agreement (N68065), dated as of November __, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (N68065), dated as of November __, 1995, between WTC, as Owner Trustee, and PCIC.

8. Trust Agreement (N164UA) dated as' of June 28, .1991, between First Security Bank of Utah, N.A. (" First Security Bank "), as Owner Trustee, and PCIC, as amended by the Trust Amendment No. 1 dated as of December 16, 1991, as supplemented by the Supplement No. 1 to Trust Agreement dated as of July 1, 1991, as supplemented by the Supplement No. 2 to Trust Agreement dated as of July 1, 1991, and as supplemented by the Supplement No. 3 to Trust Agreement dated as of July 23, 1991.

9. Trust Agreement (N165UA) dated as of July 26, 1991, between First Security Bank, as Owner Trustee, and PCIC, as amended by the Trust Agreement Amendment No. 1 dated as of July 26, 1991, as amended by the Trust Agreement Amendment No. 2 dated as of July 15, 1992, as-supplemented by the Supplement No. 1 to Trust Agreement dated as of July 26, 1991, as supplemented by the Supplement No. 2 to Trust Agreement dated as of July 26, 1991, as supplemented by the Trust Agreement No. 3 dated as of August 16, 1991, and as supplemented by the Supplement No. 4 to Trust Agreement dated as of August 16, 1991.

12. Trust Agreement (N490US) dated as of March 1, 1984, between First Security Bank, as Owner Trustee, and Suburban Bank.

13. Trust Agreement (N493US) dated as of April 1, 1984, between First Security Bank, as Owner Trustee, and Suburban Bank.

14 Trust Agreement'(TF-ABZ), dated as of November __, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (TF-ABZ), dated as of November __, 1995, between WTC and PCIC.

SCHEDULE 1.01(c)

Part I
Original Aircraft Assignment and Assumption Agreements

1. Assignment and Assumption Agreement No. 2 (N31030), dated as of November 13, 1995, AMP Funding, L.L.C. (" AMP Funding ") and RAMP Investments', L.L.C. (" AMP Investments ").

2. Assignment and Assumption Agreement No. 2 (N81026), dated as of November 13, 1995, AMP Funding and AMP Investments.

3. Assignment and Assumption Agreement No. 2 (N81025), dated as of November 13, 1995, AMP Funding and AMP Investments.

4. Assignment and Assumption Agreement No. 2 (N81028), dated as of November 13, 1995, AMP Funding and AMP Investments.

5. Assignment and Assumption Agreement No. 2 (N511P), dated as of November 13, 1995, AMP Funding and AMP Investments.

Part II
Additional Aircraft Assignment and Assumption Agreements

1. Assignment and Assumption Agreement No. 3 (N81027), dated as of November __, 1995, between AMP Funding and AMP Investments.

2. Assignment and Assumption Agreement No. 3 (SE-DPP), dated as of November __, 1995, between AMP Funding and AMP Investments.

3. Assignment and Assumption Agreement No. 3 (SE-DPX), dated as of November __, 1995, between AMP Funding and AMP Investments.

4. Assignment and Assumption Agreement No. 3 (N76073), dated as of November __, 1995, between AMP Funding and AMP Investments.

5. Assignment and Assumption Agreement No. 3 (N14063), dated as of November __, 1995, between AMP Funding and AMP Investments.

6. Assignment and Assumption Agreement No. 3 (N68065), dated as of November __, 1995, between AMP Funding and AMP Investments.

7. Assignment and Assumption Agreement No. 3 (N19072), dated as of November __, 1995, between AMP Funding and AMP Investments.

8. Assignment and Assumption Agreement No. 2 (N164UA), dated as of November __, 1995, between AMP Funding and AMP Investments.

9. Assignment and Assumption Agreement No. 2 (N165UA), dated as of November __, 1995, between AMP Funding and AMP Investments.

10. Assignment and Assumption Agreement No. 2 (N83870), dated as of November __, 1995, between AMP Funding and AMP Investments.

11. Assignment and Assumption Agreement No. 2 (N78019), dated as of November __, 1995, between AMP Funding and AMP Investments.

12. Assignment and Assumption Agreement No. 2 (N490US), dated as of November __, 1995, between AMP Funding and AMP Investments.

13. Assignment and Assumption Agreement No. 2 (N493US), dated as of November __, 1995, between AMP Funding and AMP Investments.

14. Assignment and Assumption Agreement No. 2 (TF-ABZ), dated as of November __, 1995, between AMP Funding and AMP Investments.

SCHEDULE 1.01(d)
YEAR	TAIL #	TYPE	SN#	LESEE
1993	N611FE	MD-11F	48604	Federal Express
1984	PH-BUV	B747-306 Combi	23137	undivided interest-KLM
1986	N521US	B757-251	23209	Northwest Airlines
1985	N122KH	B747-312	23033	Singapore Airlines
Various	N/A	11 Aircraft Engines	Various	ELF Engines
1987	N/A	2 CFM56-3-B2 Engines	Various	America West
1976	N506MC	B747-2D3BF	21252	Atlas Air
1979	N13983	A300	092	N/A

SCHEDULE 3.06 Original Aircraft
Tail No.	Aircraft Type	Airframe Serial Number	Engine Model No.	Engine Serial Number
N31030	L1011-100	1111	RB211-22B	10431 10075 10480
N81026	L1011-100	1104	RB211-22B	10085 10139 10487
N81025	L1011-100	1098	RB211-22B	10432 10434 10202
N81028	L1011-100	1108	RB211-22B	10086 10491 10340
N511P	B747-212B	21162	JT9D-7J	685725 689573 689569 689452
Additional Aircraft
Tail No.	Aircraft Type	Airframe Serial Number	Engine Model No.	Engine Serial Number
N81027	L1011-50	1107	RB211-22B	10107 10161 10339
SE-DPP	L1011-50	1072	RB211-22B	10484 10094 10112
SE-DPX	L1011-50	1091	RB211-22B	10068 10433 10196
N76073	DC10-30	46940	CF6-50C2	517474 455938 517523
N14063	DC10-30	47864	CF6-50C2	455953 455855 517670
N68065	DC10-30	46590	CF6-50C2	517626 517820 517833
N19072	DC10-30	46576	CF6-50C2	455431 517122 517398
N164UA	B747-238B	21657	JT9D-7J	P689504 P689617 P689609 P689528
N165UA	B747-238B	21658	JT9D-7J	P689616 P689619 P689610 P689608
N83870	MD-82	48056	JT8D-217	P708411D P708412D
N78019	B747-238B	20527	JT9D-7A	662347 662358 662892 662367 662202 662382
N490US	F-28-4000	1152	555-15	9605 9613 9621
N493US	F-28-4000	11161	555-15	9604 9679
TF-ABZ	B747-212B	21316	JT9D-7J	662995 662440 662748 685708

Schedule 3.09

Continental Airlines, Inc., DC10-30, N76073, S/N 46940:

Continental Airlines, Inc., DC10-30. N14063, S/N 47864:

Lease Agreement dated as of February 15, 1990, between PCI and Continental Airlines, as amended by that Lease Amendment No. 1 dated as of June 30, 1995, and by that Transaction Agreement dated as of June 30, 1995, and as supplemented by that Lease Supplement No. 1, dated as of February 28, 1990;

Tax Indemnity Agreement dated as of .February 15, 1990, between Continental Airlines and PCI.

Continental Airlines Inc., D.C. 10-30, N19072, S/N 46576;

Tax Indemnity Agreement dated as of February 15, 1990, between Continental Airlines and PCI.

Continental Airlines, Inc., DC10-30, N68065, S/N 46590:

Tax Indemnity Agreement dated as of May 15, 1987, between Continental Airlines and PCI.

Continental Airlines, Inc., MD-82, N83870, S/N 48056:

Aircraft Purchase Agreement dated as of August 15, 1988, among New York Airlines, Inc., the Trustee, Pegasus Capital Corporation, and Continental Airlines;

Assignment and Purchase Agreement dated as of July 14, 1989, between Pegasus Capital Corporation and PCI;

Assignment of Beneficial Interest dated as of July 28, 1989, between Pegasus Capital Corporation and PCI;

Tax Indemnity Agreement dated as of July 28, 1989, between Continental Airlines and PCI.

Continental Micronesia, Inc., B747-238B, N78019, S/N 20527:

Agreement to Lease dated as of March' 26, 1990, between PCI, the Trustee and Continental Airlines, Inc.;

Lease Agreement dated March 26, 1990, between the Trustee and Continental Airlines, as amended by that Lease Amendment No. 1 dated as of June 30, 1995 and-by that Amendment No. 1 to Lease dated as of November 1, 1990, and as supplemented by that Lease Supplement No. 1 dated as of June 1, 1990, by that Lease Supplement No. 2 dated as of July 30, 1990, and by that lease Supplement No. 3 dated as of. August 30, 1990;

Tax Indemnity Agreement dated as of March 26, 1990, between Continental Airlines and PCI.;

Aircraft Lease Assignment and Assumption Agreement dated as of April 27, 1993, between Continental Airlines and Continental Micronesia, Inc.;

Sublease Agreement dated as of April 27, 1993, between Continental Micronesia and Continental Airlines.

Trans World Airlines, Inc., L1011-50, N810270 S/N 1107:

Internationale Nederlanden Aviation Lease B.V. ("ING"). L1011-50, SE-DPX, S/N 1091:

Aircraft Lease Agreement 1091 dated as of April 27, 1994, between PCI and ING, as supplemented by that Lease Supplement No. 1 dated as of April 28, 1994.

Internationale Nederlanden Aviation Lease B.V. ("ING"), L1Q11-50, SE-DPP, S/N 1072:

Aircraft Lease Agreement 1072 dated as of June 9, 1994, between PCI and ING, as, supplemented by that Lease Supplement No. 1 dated as of June 9, 1994.

United Air Lines, Inc., B747-238B, N164UA. S/N 21657:

Participation Agreement dated as of December 1, 1990, between United Air Lines, Inc. and PCI;

Tax Indemnity Agreement dated as of July 23, 1991, between United Air Lines and Barclays Leasing, Inc., as supplemented by that UAL Agreement dated as of July 1, 1991 among United Air Lines, Barclays, PCI and the Trustee, and as assigned to PCI by that Assignment and Assumption Agreement Potomac [N164UA] between PCI and Barclays dated as of December 31, 1991;

First Amended and Restated Lease Agreement dated as of December 1, 1991, between the Trustee and United Air Lines;

Security Agreement dated as of December 16, 1991, between The Bank of New York, as Agent, and the Trustee, as amended by that Amendment NO. i to Security Agreement dated as of March 17, 1992, and as supplemented by that Security Agreement Supplement No. 1 dated as of December 31, 1991 and Security Agreement Supplement No. 2 dated as of July 23, 1991;

SBC Assignment and Assumption Agreement dated as of March 17, 1992, between Swiss Bank Corporation, New York Branch, and The Bank of New York;

NCC Assignment and Assumption Agreement dated as of April 21, 1992, between The Bank of New York and National Canada Corporation;

UBK Assignment and Assumption Agreement dated as of April 21, 1992, between The Bank of New York and The United Bank of Kuwait PLC.

United Air Lines, Inc., B747-238B, N165UA, S/N'21658:

Participation Agreement dated as of December 1, 1990, between United Air Lines, Inc. and PCI;

Trust Agreement dated as of July 26, 1991, between PCI and the First Security Bank of Utah, National Association, as mended by that Trust Agreement Amendment No. 1 dated-as of July 26, 1991, and by that Trust Agreement Amendment No. 2 dated as of July 15, 1992, and as supplemented by that Supplement No. 1 to Trust Agreement dated as of July 26, 1991, by that Supplement No. 2 to Trust Agreement dated as of July 26, 1991, by that Supplement No. 3 to Trust Agreement dated as of August 16, 1991, and by that Supplement No. 4 to Trust Agreement dated as of August 19, 1991;

Lease Agreement dated as of August 19, 1991, between Trustee, as Lessor, and United Air Lines, as Lessee, as supplemented by the Lease Supplement No. 1, dated as of August 19, 1991;

Credit Agreement dated as of July 15, 1992, among the Trustee, PCI, The Nippon Credit Bank, Ltd., Los Angeles Agency, as Agent, and The Nippon Credit Bank and Den Norske Bank, as Lenders;

USAir, Inc., F28-400Q, N490US, S/N 11152:

Trust Agreement dated as of March 1, 1984 between Suburban Bank and First Security Bank of Utah, National Association;

Participation Agreement dated as of March 1, 1984 among Trustee, Suburban Bank, C.I.T. Corporation and Empire Airlines, Inc.;'

Release dated as of December 31, 1987 by C.I.T./Equipment Financing, Inc.;

Aircraft Lease dated as of March 1, 1984 between Trustee and Empire Airlines, Inc., as supplemented by that Lease Supplement No. 1 dated as of March 1, 1984;\

Purchase Agreement dated as of December 30, 1987 between Sovran Bank/Maryland, as successor in interest to Suburban Bank, and PCI.

USAir, Inc., F28-4000, N493US, S/N .11161:

Trust Agreement dated as of April 1, 1984 between Suburban Bank and First Security Bank of Utah, National Association;

Participation Agreement dated as of April 1, 1984 among Trustee, Suburban Bank, C.I.T. Corporation and Empire Airlines, Inc.;

Release dated as of December 31, 1987 by C.I.T. Group/Equipment Financing, Inc.;

Purchase Agreement dated as of December 30, 1987 between Sovran Bank/Maryland, as successor in interest to Suburban Bank, and PCI.

STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 01/10/1994 940105092-2115369
Exhibit 3.11(b)

RESTATED CERTIFICATES OF INCORPORATION
OF
AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY
Aircraft International Management Company, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Aircraft International Management Company. Aircraft International Management Company was originally incorporated under the same name, and the original Certificate of Incorporation of the corporation was filed with the Secretary of State of the State of Delaware on January 20, 1987.
2. Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, this Restated Certificate of Incorporation restates and amends the provisions of the Certificate of Incorporation of this corporation.
3. The text of the Certificate of Incorporation is hereby restated and amended to read in its entirety as follows:
1. The name of the corporation is:
Aircraft International Management Company
2. The address of its registered office in the state of Delaware is 1105 N. Market Street, Suite 1300, P.O. Box 8985, New Castle County, Wilmington, Delaware 19899. The name of its registered agent at such address is Delaware Corporate Management, Inc.
3. The nature of the business or purposes of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation raw of Delaware.
4. The total number of shares of stock which the corporation shall have authority to issue is ten thousand (10,000) all of which shall be shares of common stock each with a par value of One Dollar ($1) per share.
5. The corporation is to have perpetual existence.
6. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:
To make, alter or repeal the By-Laws of the corporation.
7. Elections of directors need not be by written ballot unless the By-Laws of the corporation shall so provide.
Meetings of the stockholders may be held within or without the state of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject' to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation.
8. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders heroin are granted subject to this reservation.
9. No director shall be personally liable to the corporation or the stockholders for monetary damages for breach of fiduciary duty as a director except
(i) for any breach of his duty of loyalty to the corporation or the stockholders;
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
(iii} for the unlawful payment of dividends or unlawful stock repurchases (as to which a negligence standard will apply); or
(iv) for any transaction from which the director derived an improper personal benefit.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been signed under the seal of the corporation this 6th day of December, 1993.
ATTEST: /s/ WM. SHAPIRO Secretary	AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY By: /s/ PAUL F. NAUGHTON President

EXHIBIT 3.12(d)(I) PCI Trial Balance As of 11/01/95
				CURRENT PERIOD
ACCOUNT	SUB	DESCRIPTION	BEGINNING BALANCE	DEBIT	CREDIT	ENDING BALANCE
113000	08	Federal Income Tax Receivable	-624.00	624.00	0.00	0.00
114002	08	Accounts Receivable - PCI	2,062,174.51	0.00	2,062,174.51	0.00
183000	08	Deferred Federal Inc. Tax Rec.	89,100.00	0.00	89,100.00	0.00
191004	08	ST Notes Receivable from PCI	4,947.00	0.00	4,947.00	0.00
193000	08	Investment in Preferred Stocks	0.00	212,307,137.00	0.00	212,307,137.00
**Total Assets			2,155,597.51	212,307,761.00	2,156.221.51	212,307,137.00
201002	08	Accounts Payable - PCI	311,307.27	311,307.27	0.00	0.00
254000	08	Deferred FIT Payable - Other	-2,491.00	0.00	2,491.00	0.00
254006	08	DEFERRED F.I.T. - AMT	-162.00	0.00	162.00	0.00
271000	08	Common Stock	10,000.00	0.00	0.00	10,000.00
272000	08	Additional Paid-in Capital	190,000.00	0.00	210,460,193.76	210,650,193.76
274000	08	Retained Earnings	1,647,648.39	0.00	0.00	1,647,648.39
275000	08	YTD Net Income	-705.15	0.00	0.00	-705.15
**Total Liabilities			2,155,597.51	311,301.27	210,462,846.76	212,307,137.00
641000	08	Franchise Tax	130.15	0.00	0.00	130.00
651000	08	Misc. Expense	784.00	0.00	0.00	784.00
999200	08	FIT - Current - Other	-209.00	0.00	0.00	-209.00
** Total Income and Expense			-705.15	0.00	0.00	-705.15

Exhibit 3.12(d)(ii) Aircraft International Management Corporation (AIMC) Preferred Stock Portfolio
Company	Number of Shares	Par Value Per Share	Face Amount	Market Value
Puget Sound	160,000	100	16,000,000	16,800,000
Duke Power	20,000	100	2,000,000	2,125,000
Duke Power	30,000	100	3,000,000	3,217,500
Duke Power	47,000	100	4.700,000	4,888,000
Duke Power	118,350	100	11,835,000	12,781,800
Louisville Gas & Electric	43,100	100	4,310,000	4,396,200
Public Service Gas & Electric	77,500	100	7,750,000	7,711,250
Consolidated Edison	62,500	100	6,250,000	6,500,000
Consolidated Edison	89,000	100	8,900,000	9,256,000
Florida Power & Light	29,080	100	2,908,000	2,973,430
Ford Holdings Inc. Series B	252	100,000	25,200,000	24,822,000
Ford Holdings Series G	228	100,000	22,800,000	22,971,000
Ford Series N	30	100,000	3,000,000	3,120,000
Interstate Power	103,000	50	5,150,000	5,072,750
Southern Cal Edison	49,450	100	4,945,000	5,142,800
Southern Cal Edison	22,000	100	2,200,200	2.354,000
Pacific Gas & Electric	585,900	25	14,647,500	14,793,975
Pacific Gas & Electric	142,000	25	3,550,000	3,621,000
Virginia Electric Power	130,000	100	13,000,000	13,650,000
Appalachian Power	91,400	100	9,140,000	9,083,332
Appalachian Power	100,000	100	10,000,000	10,650,000
New York State Electric & Gas	280,000	25	7,000,000	7,350,000
New York State Electric & Gas	67,100	100	6,710,000	6,777.100
Ohio Power Company	122,500	100	12,250,000	12,250,000
TOTAL				212,307,137

EXHIBIT C

FORM OF CONTRIBUTION AGREEMENT

dated as of

November 13, 1995

between

RAMP INVESTMENTS, L.L.C.

Contributor

and

PCI AIR MANAGEMENT PARTNERS, L.L.C.

Contributee

____________________________________________________________________________

CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this " Agreement ") dated as of November 13, 1995, between RAMP Investments, L.L.C., a limited liability Company organized under the laws of the State of Delaware (the " Contributor "), and PCI Air Management Partners, L.L.C., a limited liability company organized under the laws of the State of Delaware (the " Contributee ").
RECITALS
The Contributor wishes' to contribute to the Contributee effective as of November 13, 1995 (the " Original Contribution Date ") the Original Assets (as defined in Section 1.01(a) below), and the Contributee has agreed to accept such contribution, subject to the terms and conditions of this Agreement. On or before the 90th day after the Original Contribution Date, the Contributor wishes to contribute to the Contributee effective as of a date agreed on from time to time by the parties (the " Additional Contribution Date " and together with the Original Contribution Date, a " Contribution Date ") all or a portion of the Additional Assets (as defined in Section 1.01(b) below), subject to the terms and conditions of this Agreement.
In consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, the Contributor and the Contributee hereby agree as follows:
ARTICLE 1. CONTRIBUTION OF ASSETS
1.01 Contribution of Assets
(a) Subject to the terms and conditions of this Agreement, on the Original Contribution Date the Contributor shall assign and deliver to the-Contributee all of its right, title and interest in and to the following:
	(i) all of the outstanding shares (the " AIMC Shares ") of common stock of Aircraft International Management Corporation, a Delaware corporation (" AIMC ");
	(ii) the Trust Agreements described in Schedule 1.01(a) attached hereto (the " Original Trust Agreements ");
	(iii) each of the trusts created under the Original Trust Agreements and each Trust Estate (as defined in each of the Original Trust Agreements); and
	(iv) any existing deposits, reserve accounts, or receivables held under or pursuant to any of the foregoing (all such right, title and interest in the agreements and property referred to in clauses (i) through (iv) collectively, the " Original Assets ").
(b) Subject to the terms and conditions of this Agreement, on the Additional Contribution Date, the Contributor shall assign and deliver to the Contributee all of its right, title and interest in and to all or a portion (provided such portion consists of all of the following assets related to any Trust Estate included in such portion) of the following:
	(i) the Trust Agreements described in Schedule 1.01(b) attached hereto (the " Additional Trust Agreements " and together with the Original Trust Agreements, the " Trust Agreements ");
	(ii) each of the trust-s created under the Additional Trust Agreements and each Trust Estate (as defined in each of the Additional Trust Agreements); and
	(iii) any existing deposits, reserve accounts, receivables held under or pursuant to any of the foregoing (all such right, title and interest in the agreements and property referred to in clauses (i) through (iii) collectively, the " Additional Assets " and together with the Original Assets, the " Assets ").
No contributions of Additional Assets shall occur pursuant hereto after the 90th day after the date hereof. All rents and other amounts payable to lessor under the three aircraft leases subject to the Additional Trust Agreements in items 6, 9 and 10 of Part II of Schedule 1.01(c) hereof shall accrue to Contributee from and after November 30, 1995, regardless of when the Additional Contribution Date for such Additional Trust Agreements occurs and, to the extent of any payment thereof to Contributor on or prior to the Additional Contribution Date, Contributor shall contribute such amount to Contributee on the Additional Contribution Date for such Additional Assets.
(c) The assignment of the Assets pursuant to Section 1.01(a) and (b) shall be evidenced by the Assignment and Assumption Agreements described in Schedule 1.01(c) attached hereto (collectively, the " Assignment Agreements ") which shall be effective as of the Original Contribution Date or any Additional Contribution-Date, as the case may be, and delivered by the Contributor on the Original Contribution Date or any Additional Contribution Date, as the case may be.
(d) In the event the Contributor is unable to obtain all relevant consents to the transfer contemplated by any of the Assignment Agreements-listed in Part II of Schedule 1.01(c), the Contributor, with the prior written consent of each of the parties specified in Section 5.01 hereof, may substitute for any of the Aircraft listed in Schedule 1.01(d) hereto any other Trust Agreement (and all related property rights, instruments and agreements) relating to an aircraft of comparable value as the Aircraft being substituted.
ARTICLE 2. EVENTS OCCURRING ON THE CONTRIBUTION DATE
2.01 Deliveries by Contributor . In addition to the Assets to be contributed to the Contributee on a Contribution Date, the Contributor shall deliver the following to the Contributee on the Contribution Date, each in form and substance satisfactory to the Contributee and, unless otherwise agreed in writing by the Contributee, dated the Contribution Date:
	(i) A copy of the resolutions of the Contributor's members, certified by the executive manager of the Contributor, authorizing or ratifying its execution, delivery and performance of this Agreement, each, Assignment Agreement and the other documents to be delivered hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby;
	(ii) A certificate of all members of the Contributor certifying (a) the names and true signatures of the executive manager of the Contributor authorized to sign this Agreement, each Assignment Agreement and the other 'documents to be delivered hereunder and thereunder and (b) that attached thereto are true and correct copies of the Contributor's articles of organization and operating agreement, in each case as in effect on the Contribution Date;
	(iii) Favorable opinions of counsel for the Contributor; and
	(iv) Such other approvals, opinions and documents as the Contributee may reasonably request as to the legality, validity, binding effect or enforceability of this Agreement or any Assignment Agreement.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR
Contributor hereby represents and warrants as of each Contribution Date that:
3.01 Title to Assets . The Contributor has good and marketable title to all of the Assets transferred on such Contribution Date free and clear of all obligations, liens, pledges, claims, rights of first refusal, options, charges, security interests, mortgages or other encumbrances of any nature whatsoever (collectively, the " Asset Encumbrances "), other than any Asset Encumbrance arising solely in favor of the Contributee from the transactions contemplated hereby and by the Assignment Agreements.
3.02 Organization . The Contributor is a limited liability company validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties and assets now owned or leased by it or the nature of the business transacted by it requires it to be so qualified, except where the failure to be so qualified, individually or in the aggregate, would not have a material adverse effect upon the business or financial condition of the Contributor or upon the transactions contemplated by this Agreement.
3.03 Authority . The Contributor has the power and authority to carry on its business as now conducted, to own or hold under lease its properties, and to execute and deliver this Agreement and each Assignment Agreement and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Contributor of this Agreement and each Assignment Agreement have been duly authorized by all necessary action; and each of this Agreement and each Assignment Agreement has been duly executed and delivered by the Contributor and is the legal, valid and binding obligation of the Contributor enforceable against-the Contributor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, receivership, conservatorship, reorganization, liquidation, moratorium or similar events affecting the Contributor or its assets, or by general principles of equity.
3.04 No Consents; No Violations.
(a) No authorization, approval or other action by, and no notice to or filing with, any governmental, regulatory or legal authority or any other person is required for the due execution, delivery and performance by the Contributor of this Agreement or any Assignment Agreement or the consummation of the transactions contemplated hereby or thereby.
(b) The execution, delivery and performance of this Agreement and any Assignment Agreement and the consummation of the transactions contemplated hereby and thereby do not and will not result in any contravention of (i) the articles of organization or operating agreement of the Contributor or the articles of incorporation or by-laws of AIMC, (ii) any applicable law, rule or regulation of any federal, state or local governmental or regulatory authority, (iii) any order, writ, injunction, judgment, decree or award of any court, arbitrator, or governmental or regulatory authority to which the Contributor or AIMC or any of their properties are subject, (iv) any mortgage, contract, agreement, deed of trust, license, lease or other instrument, arrangement, commitment, obligation, understanding or restriction of any kind to which the Contributor or AIMC is a party or by which any of their properties are bound, or (v)'the Operative Documents (as defined in Section 3.06(a) below).
3.05 Litigation . Other than as disclosed in writing to the parties hereto by the Contributor, there is no pending or known threatened action or proceeding before any court, governmental agency or arbitrator by or against, or involving the Contributor or .any of its Affiliates, any of its property or any of its members, managers or employees which questions or challenges the validity or enforceability of this Agreement or any Assignment Agreement, or any action taken or to be taken by the Contributor pursuant to this Agreement or any Assignment Agreement or in connection with the transactions contemplated hereby or thereby.
3.06 Representations Regarding Documents.
(a) This Agreement, the Trust Agreements, the Assignment Agreements and the Assigned Documents (as defined in the related Assignment Agreement) (collectively, the "Operative Documents") constitute all of the material agreements to which the Contributor, the applicable Trustee (as defined in the applicable Trust Agreement) and/or the applicable Lessee (as defined in. the applicable Lease), if any, is a party relating to each of the Aircraft (as listed on Schedule 3.06 hereto) that remain in full force and effect as of the Contribution Date. Each such Operative Document is in full force and effect and has not been modified or amended.
(b) Each Trust Estate is free and clear of any Asset 'Encumbrance created or incurred, directly or indirectly, by the Contributor, and, to the knowledge of the Contributor, each Trust Estate is free and clear of any Asset Encumbrance.
(c) Each Trustee has good and marketable title to the applicable Aircraft in each case, free and clear of any Asset Encumbrance other than the Master Leasing Agreement dated as of November 13, 1995, by and among the applicable Trustee and the Contribute, any applicable sublease specified in an Assignment Document, and in the case of Aircraft bearing FAA Registration Nos. N164UA and N165UA, the lien of the related Security Agreement (as defined in the applicable sublease).
(d) There is no obligation or covenant to be performed by the Contributor under any Trust Agreement or any other Operative Document and no obligation or covenant of the Contributor, which has accrued, on or prior to the date hereof which has not been fully performed, and Contributor shall indemnify and hold harmless the Contribute from and against any claim, loss, liability or expense incurred by Contribute attributable to any such obligation or covenant which has not been so performed or which has so occurred.
(e) There are no defaults and no events which, with the giving of notice or lapse of time or both, would constitute a default by the Contributor under any Trust Agreement or any other Operative Document and to the knowledge of the Contributor, there are no material defaults and no events which, with the giving of notice or lapse of time or both, would constitute a default by any Trustee under any Trust Agreement or any other Operative Document to which any Trustee is a party.
(f) All rent due and owing as of any Additional 'Contribution Date under any lease of any Aircraft included in the Trust Estate for any Trust Agreement contributed to Contribute on any Additional Contribution Date for any period subsequent to the date for payment under such lease has not, and will not have, been collected for more than one (1) month in advance and payment thereof has not, and on such Additional Contribution Date will not 'have, been anticipated, waived, released, discounted, set off or otherwise discharged or compromised; no supplemental rent has, or on such Additional Contribution Date will have, been paid or is or on such Additional Contribution Date will be due and owing under any such lease; and as of November 30, 1995, the aggregate amount of basic rent scheduled to be due and owing under the three aircraft lease agreements directly or indirectly included in the Additional Assets as items 6, 9 and 10 on Part II of Schedule 1.01(c) attached hereto (which three lease agreements are not covered by a master lease) is $384,389.00.
3.07 Solvency of Contributor . The Contributor was solvent immediately prior to the execution of this Agreement and will not, as a result of the transactions contemplated hereby, be rendered insolvent.
3.08 Obligations of the Contributor . Other than as specifically set forth in the Trust Agreements and the other. Operative Documents, the Contributor has no obligations, duties or liabilities under or with respect thereto.
3.09 No Waiver . Except for consents to which the Contribute is a party and those listed on Schedule 3.09, the Contributor has not entered into or given any written waivers, consents, supplements, or modifications of the Trust Agreements or any other Operative Document and has not entered into or given any waivers or consents with respect to any of the Aircraft.
3.10 No Event of Loss . To the knowledge of the Contributor, neither an "Event of Loss" (as such term is defined in the applicable sublease) nor any event which with the passage of time would constitute such an Event of Loss has occurred with respect to the Aircraft covered by such sublease.
3.11 No Broker . Except for fees payable to Bankers Trust Company, the Contributor is not obligated to pay, and has not retained any broker or finder or other person who is entitled to, any broker's or finder's fee or other commission based upon the consummation of the transactions contemplated by this Agreement, any other Operative Agreement or any other agreement contemplated thereby.
3.12 AIMC Shares .
(a) The authorized capital stock of AIMC consists of 10,000 shares of common stock (the "AIMC Common Stock"), par value $1.00 per share, of which 5,000 shares are issued and outstanding, all of which are AIMC Shares and are owned of record and beneficially by Contributor. The AIMC Shares have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive rights. There is no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge or other disposition of any shares of AIMC Common Stock or of any other capital stock of AIMC or any securities convertible into, or other rights to acquire, any such shares of AIMC Common Stock or other capital stock of AIMC or (ii) relates to the voting or control of such AIMC Common Stock, capital stock, securities or rights. No person has any right to require AIMC to register any of its securities under the Securities Act of 1933, as amended (the " Securities Act ").
(b) AIMC is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as presently conducted. AIMC is duly qualified as a foreign corporation, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease requires it to be so qualified. Attached hereto as Exhibit 3.11(b) is a complete and correct copy of AIMC's certificate of incorporation, as amended to date, certified by the Secretary of the State of Delaware, and AIMC's bylaws, as currently in effect.
(c) The transfer of the AIMC Shares to Contribute pursuant to this Agreement will vest in Contribute legal and valid title to the AIMC Shares, free and clear of all Asset Encumbrances.
(d) Attached as Exhibit 3.12(d)(i) is a copy of the unaudited balance sheet and income statement of AIMC as of October 31, 1995, which fairly presents the financial position and accurately reflects the assets and liabilities of AIMC as of such date. AIMC has no subsidiaries. AIMC has valid legal and beneficial title to all of the shares of preferred stock set forth on Exhibit 3.12(d)(ii) attached hereto free and clear of all Asset Encumbrances. As of the date hereof, AIMC has net worth of at least $212,000,000.
(e) AIMC has no debts, obligations or liabilities of any kind or nature, either direct or indirect, absolute or contingent, matured or unmatured, known or unknown, including, without limitation, liabilities or obligations with respect to any federal, state, local and foreign income, franchise, excise, sales or use taxes.
(f) AIMC has complied in all material respects with all laws, statutes, rules, regulations, judgments, decrees and orders applicable to its business or operations including, without limitation, any of the above which relate to the environment.
ARTICLE 4. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
4.01 Survival. The representations and warranties of the Contributor contained in Article 3 hereof shall survive the Contribution Date and the delivery and acceptance of the Assignment Agreements.
4.02 Transfer Taxes. The Contributor shall pay, or cause to be paid, all sales taxes, use taxes, transfer taxes, and recording fees (and any interest and penalties related thereto ("Taxes")), imposed on or applicable to the transfers of the Assets by Contributor to Contribute, except for Taxes solely attributable to the actions or inactions of Contribute.
4.03 Indemnification. Contributor shall indemnify and hold harmless the Contribute from and against any and all claims, losses, liabilities and damages, including, without limitation, amounts paid in settlement, reasonable costs of investigation and reasonable fees and disbursements of counsel, arising out of or resulting from the inaccuracy of any representation or warranty, or the breach of any covenant or agreement, contained herein or in any of the Assignment Agreements or in any instrument or certificate delivered pursuant hereto.
ARTICLE 5. MISCELLANEOUS PROVISIONS
5.01 Amendment and Modification . This Agreement may be amended, modified or supplemented only by written agreement of the parties hereto and with the prior written consent of AM-BT Nevada, Inc. ("BT").
5.02 Waiver of Compliance; Consents. Any failure of a party to comply with any obligation, covenant, agreement or condition herein may be waived by the other party; provided, however, that any such waiver may be made only by a written instrument signed by the party granting such waiver and consented to in writing by BT, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 5.02, with appropriate notice in accordance with Section 5.08 of this Agreement.
5.03 Assignment . This Agreement and all of the provisions hereof shall be binding upon the parties hereto and their respective successors and permitted assigns and shall inure to the benefit of BT, the parties hereto, their respective successors and permitted assigns. Any party may assign any of its rights hereunder, but no such assignment shall relieve it of its primary liability for its obligations hereunder. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person other than BT, the parties hereto, any successors and permitted assigns any rights, remedy or claim under or by reason of this Agreement or any provision herein contained.
5.04 Expenses . In the event that the transactions contemplated by this Agreement are consummated, all fees and expenses (including all fees of counsel and accountants) incurred by any party in connection with the negotiation and execution of this Agreement and any Assignment Agreement shall be borne by the Contributor and BT. Any such fees and expenses not so authorized to be paid by the Contributor and BT shall be borne by the party who incurred them.
5.05 Further Assurances . From time to time, at the request of the Contributor or BT and without further consideration, each party, at its own expense, will execute and deliver such other documents, and take such other action, as the Contributor or the Contribute may reasonably request in order to consummate more effectively the transactions contemplated hereby and to vest in Contribute and its successors-and assigns good and marketable title to the Assets.
5.06 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to its conflicts of law doctrines). The Contributor and the Contribute each (i) irrevocably submits to the jurisdiction of any New York State court or federal court sitting in New York City in any action arising out of this Agreement or any Assignment Agreement or any instrument or document delivered hereunder or thereunder, (ii) agrees that all claims in such action may be decided in such court, (iii) waives, to the fullest extent it may effectively do so, the defense of inconvenient forum, and (iv) consents to the service of process by mail. A final judgment in any such action shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court.
5.07 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become a binding Agreement when one or more of the counterparts have been signed by each of the parties and delivered to the other party.
5.08 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed by registered or certified mall (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):
	If to the Contributor: 1575 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator
	with a copy to: Sierra Corporate Services 241 Ridge Street Reno, Nevada Attention: Contracts Administrator
	If to the Contributee: 1575 Delucchi Lane Suite 115 Reno, Nevada 89502 Attention: Contracts Administrator
	with a copy to: Sierra Corporate Services 241 Ridge Street Reno, Nevada Attention: Contracts Administrator
	and a copy to: AM-BT Nevada, Inc. c/o Lionel Sawyer & Collins 1700 Bank of America Plaza 300 South Fourth Street Las Vegas, Nevada 89101
5.09 Headings . The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
5.10 Entire Agreement . 'This Agreement, including the exhibits, schedules, other documents and instruments referred to herein, together with the Assignment Agreements, embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
5.11 Severability . If any one or more provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision-had never been contained herein.
5.12 Schedules . All Schedules attached hereto are hereby incorporated herein and made a part hereof as if. set forth in full herein.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
		RAMP INVESTMENTS, L.L.C. By: PCI AIR MANAGEMENT CORPORATION, as Manager By: ______________________________ Title: _____________________________
		PCI Air Management Partners, L.L.C. By: PCI AIR MANAGEMENT CORPORATION, as Manager By: ______________________________ Title: _____________________________

SCHEDULE 1.01(a)

1. Trust Agreement (N31030) dated as of November 7, 1995 between Potomac Capital Investment Corporation ("PCIC"), as Owner Participant, and Wilmington Trust Company, a Delaware banking corporation ("WTC"), as Owner Trustee, as supplemented by the Supplement to Trust Agreement No. 1 (N31030), dated as of November 13, 1995, between WTC and PCIC.

SCHEDULE 1.01(b)

1. Trust Agreement (N81027), dated as of November ___, 1995, between Wilmington Trust Company (" WTC "), as Owner Trustee, and Potomac Capital Investment Corporation ("PCIC"), as supplemented by the Supplement to Trust Agreement No. 1 (N81027), dated as of November ___, 1995, between WTC, as Owner Trustee, and PCIC.

2. Trust Agreement (SE-DPP), dated as of November ___, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (SE-DPP), dated as of November ___, 1995, between WTC and PCIC.

3. Trust Agreement (SE-DPX), dated as of November ___, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (SE-DPX), dated as of November ___, 1995, between WTC and PCIC.

4. Trust Agreement (N76073), dated as of November ___, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (N76073), dated as of November ___, 1995, between WTC and PCIC.

5. Trust Agreement (N14063), dated as of November ___, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (14063), dated as of November ___, 1995, between WTC and PCIC.

6. Trust Agreement (N68065), dated as of November _____, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (N68065), dated as of November ____, 1995, between WTC, as Owner Trustee, and PCIC.

8. Trust Agreement (N164UA) dated as of June 28, 1991, between First Security Bank of Utah, N.A. ("First Security Bank"), as Owner Trustee, and PCIC, as amended by the Trust Amendment No. 1 dated as of December 16, 1991, as supplemented by the Supplement No. 1 to Trust Agreement dated as of July 1, 1991, as supplemented by the Supplement No. 2 to Trust Agreement dated as of July 1, 1991, and as supplemented by the Supplement No. 3 to Trust Agreement dated as of July 23, 1991.

9. Trust Agreement (N165UA) dated as of July 26, 1991, between 'First Security Bank, as Owner Trustee, and PCIC, as amended by the Trust Agreement Amendment No. I dated as of July 26, 1991, as amended by the Trust Agreement Amendment No. 2 dated as of July 15, 1992, as supplemented by the Supplement No. 1 to Trust Agreement dated as of July 26, 1991, as supplemented by the Supplement No. 2 to Trust Agreement dated as of July 26, 1991, as supplemented by the Trust Agreement No. 3 dated as of August 16, 1991, and as supplemented by the Supplement No. 4 to Trust Agreement dated as of August 16, 1991.

10. Trust Agreement (N83870) dated as of August 15, 1988, between First Security Bank, as Owner Trustee, and Pegasus Capital. Corporation, as amended by the Trust Agreement Amendment No. 1 dated as of July 23, 1989.

12. Trust Agreement (N490US) dated as of March 1, 1984, between First Security Bank, as Owner Trustee, and Suburban Bank.

13. Trust Agreement (N493US) dated as of April 1, 1984, between First Security Bank, as Owner Trustee, and Suburban Bank.

14. Trust Agreement (TF-ABZ), dated as of November ___, 1995, between WTC, as Owner Trustee, and PCIC, as supplemented by the Supplement to Trust Agreement No. 1 (TF-ABZ), dated as, of November __, 1995, between WTC and PCIC.

SCHEDULE 1.01(c)

Part I
Original Aircraft Assignment and Assumption Agreements

1. Assignment and Assumption Agreement No. 3 (N31030), dated as-of November 13, 1995, RAMP Investments, L.L.C. (" AMP Investments ") and PCI Air Management, L.L.C. (" PCI Air ").

2. Assignment and Assumption Agreement No. 3 (N81026), dated as of November 13, 1995, AMP Investments and PCI Air.

3. Assignment and Assumption Agreement No. 3 (N81025), dated as of November 13, 1995, AMP Investments and PCI Air.

4. Assignment and Assumption Agreement No. 3 (N81028), dated as of November 13, 1995, AMP Investments and PCI Air.

5. Assignment and Assumption Agreement No. 3 (N511P), dated as of November 13, 1995, AMP Investments and PCI Air.

Part II
Additional Aircraft Assignment and Assumption Agreements

1. Assignment and Assumption Agreement No. 4 (N81027), dated as of November __, 1995, between AMP Investments and PCI Air.

2. Assignment and Assumption Agreement No. 4 (SE-DPP), dated as of November __, 1995, between AMP Investments and PCI Air.

3. Assignment and Assumption Agreement No. 4 (SE-DPX), dated as of November __, 1995, between AMP Investments and PCI Air.

4. Assignment and Assumption Agreement No. 4 (N76073), dated as of November __, 1995, between AMP Investments and PCI Air.

5. Assignment and Assumption Agreement No. 4 (N14063), dated as of November __, 1995, between AMP Investments and PCI Air.

6. Assignment and Assumption Agreement No. 4 (N68065), dated as of November __, 1995, between AMP Investments and PCI Air.

7. Assignment and Assumption Agreement No. 4 (N19072), dated as of November __, 1995, between AMP Investments and PCI Air.

8. Assignment and Assumption Agreement No. 3 (N164UA), dated as of November __, 1995, between AMP Investments and PCI Air.

9. Assignment and Assumption Agreement No. 3 (N165UA), dated as of November __, 1995, between AMP Investments and PCI Air.

10. Assignment and Assumption Agreement No. 3 (N83870), dated as of November __, 1995, between AMP Investments and PCI Air.

11. Assignment and Assumption Agreement No. 3 (N78019), dated as of November __, 1995, between AMP Investments and PCI Air.

12. Assignment and Assumption Agreement No. 3 (N490US), dated as of November __, 1995, between AMP Investments and PCI Air.

13. Assignment and Assumption Agreement No. 3 (N493US), dated as of November __, 1995, between AMP Investments and PCI Air.

14. Assignment and Assumption Agreement No. 3 (TF-ABZ), dated as of November __, 1995, between AMP Investments and PCI Air.

SCHEDULE 1.01(d)
YEAR	TAIL #	TYPE	SN#	LESEE
1993	N611FE	MD-11F	48604	Federal Express
1984	PH-BUV	B747-306 Combi	23137	undivided interest-KLM
1986	N521US	B757-251	23209	Northwest Airlines
1985	N122KH	B747-312	23033	Singapore Airlines
Various	N/A	11 Aircraft Engines	Various	ELF Engines
1987	N/A	2 CFM56-3-B2 Engines	Various	America West
1976	N506MC	B747-2D3BF	21252	Atlas Air
1979	N13983	A300	092	N/A

SCHEDULE 3.06 Original Aircraft
Tail No.	Aircraft Type	Airframe Serial Number	Engine Model No.	Engine Serial Number
N31030	L1011-100	1111	RB211-22B	10431 10075 10480
N81026	L1011-100	1104	RB211-22B	10085 10139 10487
N81025	L1011-100	1098	RB211-22B	10432 10434 10202
N81028	L1011-100	1108	RB211-22B	10086 10491 10340
N511P	B747-212B	21162	JT9D-7J	685725 689573 689569 689452
Additional Aircraft
Tail No.	Aircraft Type	Airframe Serial Number	Engine Model No.	Engine Serial Number
N81027	L1011-50	1107	RB211-22B	10107 10161 10339
SE-DPP	L1011-50	1072	RB211-22B	10484 10094 10112
SE-DPX	L1011-50	1091	RB211-22B	10068 10433 10196
N76073	DC10-30	46940	CF6-50C2	517474 455938 517523
N14063	DC10-30	47864	CF6-50C2	455953 455855 517670
N68065	DC10-30	46590	CF6-50C2	517626 517820 517833
N19072	DC10-30	46576	CF6-50C2	455431 517122 517398
N164UA	B747-238B	21657	JT9D-7J	P689504 P689617 P689609 P689528
N165UA	B747-238B	21658	JT9D-7J	P689616 P689619 P689610 P689608
N83870	MD-82	48056	JT8D-217	P708411D P708412D
N78019	B747-238B	20527	JT9D-7A	662347 662358 662892 662367 662202 662382
N490US	F-28-4000	1152	555-15	9605 9613 9621
N493US	F-28-4000	11161	555-15	9604 9679
TF-ABZ	B747-212B	21316	JT9D-7J	662995 662440 662748 685708

Schedule 3.09

Continental Airlines, Inc., DC10-30, N76073, S/N 46940:

Continental Airlines, Inc., DC10-30. N14063, S/N 47864:

Tax Indemnity Agreement dated as of .February 15, 1990, between Continental Airlines and PCI.

Continental Airlines Inc., D.C. 10-30, N19072, S/N 46576;

Tax Indemnity Agreement dated as of February 15, 1990, between Continental Airlines and PCI.

Continental Airlines, Inc., DC10-30, N68065, S/N 46590:

Tax Indemnity Agreement dated as of May 15, 1987, between Continental Airlines and PCI.

Continental Airlines, Inc., MD-82, N83870, S/N 48056:

Aircraft Purchase Agreement dated as of August 15, 1988, among New York Airlines, Inc., the Trustee, Pegasus Capital Corporation, and Continental Airlines;

Assignment and Purchase Agreement dated as of July 14, 1989, between Pegasus Capital Corporation and PCI;

Assignment of Beneficial Interest dated as of July 28, 1989, between Pegasus Capital Corporation and PCI;

Tax Indemnity Agreement dated as of July 28, 1989, between Continental Airlines and PCI.

Continental Micronesia, Inc., B747-238B, N78019, S/N 20527:

Agreement to Lease dated as of March' 26, 1990, between PCI, the Trustee and Continental Airlines, Inc.;

Tax Indemnity Agreement dated as of March 26, 1990, between Continental Airlines and PCI.;

Aircraft Lease Assignment and Assumption Agreement dated as of April 27, 1993, between Continental Airlines and Continental Micronesia, Inc.;

Sublease Agreement dated as of April 27, 1993, between Continental Micronesia and Continental Airlines.

Trans World Airlines, Inc., L1011-50, N810270 S/N 1107:

Internationale Nederlanden Aviation Lease B.V. ("ING"). L1011-50, SE-DPX, S/N 1091:

Aircraft Lease Agreement 1091 dated as of April 27, 1994, between PCI and ING, as supplemented by that Lease Supplement No. 1 dated as of April 28, 1994.

Internationale Nederlanden Aviation Lease B.V. ("ING"), L1Q11-50, SE-DPP, S/N 1072:

Aircraft Lease Agreement 1072 dated as of June 9, 1994, between PCI and ING, as, supplemented by that Lease Supplement No. 1 dated as of June 9, 1994.

United Air Lines, Inc., B747-238B, N164UA. S/N 21657:

Participation Agreement dated as of December 1, 1990, between United Air Lines, Inc. and PCI;

First Amended and Restated Lease Agreement dated as of December 1, 1991, between the Trustee and United Air Lines;

SBC Assignment and Assumption Agreement dated as of March 17, 1992, between Swiss Bank Corporation, New York Branch, and The Bank of New York;

NCC Assignment and Assumption Agreement dated as of April 21, 1992, between The Bank of New York and National Canada Corporation;

UBK Assignment and Assumption Agreement dated as of April 21, 1992, between The Bank of New York and The United Bank of Kuwait PLC.

United Air Lines, Inc., B747-238B, N165UA, S/N'21658:

Participation Agreement dated as of December 1, 1990, between United Air Lines, Inc. and PCI;

Lease Agreement dated as of August 19, 1991, between Trustee, as Lessor, and United Air Lines, as Lessee, as supplemented by the Lease Supplement No. 1, dated as of August 19, 1991;

Credit Agreement dated as of July 15, 1992, among the Trustee, PCI, The Nippon Credit Bank, Ltd., Los Angeles Agency, as Agent, and The Nippon Credit Bank and Den Norske Bank, as Lenders;

USAir, Inc., F28-400Q, N490US, S/N 11152:

Trust Agreement dated as of March 1, 1984 between Suburban Bank and First Security Bank of Utah, National Association;

Participation Agreement dated as of March 1, 1984 among Trustee, Suburban Bank, C.I.T. Corporation and Empire Airlines, Inc.;'

Release dated as of December 31, 1987 by C.I.T./Equipment Financing, Inc.;

Aircraft Lease dated as of March 1, 1984 between Trustee and Empire Airlines, Inc., as supplemented by that Lease Supplement No. 1 dated as of March 1, 1984;\

Purchase Agreement dated as of December 30, 1987 between Sovran Bank/Maryland, as successor in interest to Suburban Bank, and PCI.

USAir, Inc., F28-4000, N493US, S/N .11161:

Trust Agreement dated as of April 1, 1984 between Suburban Bank and First Security Bank of Utah, National Association;

Participation Agreement dated as of April 1, 1984 among Trustee, Suburban Bank, C.I.T. Corporation and Empire Airlines, Inc.;

Release dated as of December 31, 1987 by C.I.T. Group/Equipment Financing, Inc.;

Purchase Agreement dated as of December 30, 1987 between Sovran Bank/Maryland, as successor in interest to Suburban Bank, and PCI.

STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 01/10/1994 940105092-2115369
Exhibit 3.11(b)

RESTATED CERTIFICATES OF INCORPORATION
OF
AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY
Aircraft International Management Company, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Aircraft International Management Company. Aircraft International Management Company was originally incorporated under the same name, and the original Certificate of Incorporation of the corporation was filed with the Secretary of State of the State of Delaware on January 20, 1987.
2. Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, this Restated Certificate of Incorporation restates and amends the provisions of the Certificate of Incorporation of this corporation.
3. The text of the Certificate of Incorporation is hereby restated and amended to read in its entirety as follows:
1. The name of the corporation is:
Aircraft International Management Company
2. The address of its registered office in the state of Delaware is 1105 N. Market Street, Suite 1300, P.O. Box 8985, New Castle County, Wilmington, Delaware 19899. The name of its registered agent at such address is Delaware Corporate Management, Inc.
3. The nature of the business or purposes of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation raw of Delaware.
4. The total number of shares of stock which the corporation shall have authority to issue is ten thousand (10,000) all of which shall be shares of common stock each with a par value of One Dollar ($1) per share.
5. The corporation is to have perpetual existence.
6. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:
To make, alter or repeal the By-Laws of the corporation.
7. Elections of directors need not be by written ballot unless the By-Laws of the corporation shall so provide.
Meetings of the stockholders may be held within or without the state of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject' to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation.
8. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders heroin are granted subject to this reservation.
9. No director shall be personally liable to the corporation or the stockholders for monetary damages for breach of fiduciary duty as a director except
(i) for any breach of his duty of loyalty to the corporation or the stockholders;
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
(iii} for the unlawful payment of dividends or unlawful stock repurchases (as to which a negligence standard will apply); or
(iv) for any transaction from which the director derived an improper personal benefit.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been signed under the seal of the corporation this 6th day of December, 1993.
ATTEST: /s/ WM. SHAPIRO Secretary	AIRCRAFT INTERNATIONAL MANAGEMENT COMPANY By: /s/ PAUL F. NAUGHTON President

EXHIBIT 3.12(d)(I) PCI Trial Balance As of 11/01/95
				CURRENT PERIOD
ACCOUNT	SUB	DESCRIPTION	BEGINNING BALANCE	DEBIT	CREDIT	ENDING BALANCE
113000	08	Federal Income Tax Receivable	-624.00	624.00	0.00	0.00
114002	08	Accounts Receivable - PCI	2,062,174.51	0.00	2,062,174.51	0.00
183000	08	Deferred Federal Inc. Tax Rec.	89,100.00	0.00	89,100.00	0.00
191004	08	ST Notes Receivable from PCI	4,947.00	0.00	4,947.00	0.00
193000	08	Investment in Preferred Stocks	0.00	212,307,137.00	0.00	212,307,137.00
**Total Assets			2,155,597.51	212,307,761.00	2,156.221.51	212,307,137.00
201002	08	Accounts Payable - PCI	311,307.27	311,307.27	0.00	0.00
254000	08	Deferred FIT Payable - Other	-2,491.00	0.00	2,491.00	0.00
254006	08	DEFERRED F.I.T. - AMT	-162.00	0.00	162.00	0.00
271000	08	Common Stock	10,000.00	0.00	0.00	10,000.00
272000	08	Additional Paid-in Capital	190,000.00	0.00	210,460,193.76	210,650,193.76
274000	08	Retained Earnings	1,647,648.39	0.00	0.00	1,647,648.39
275000	08	YTD Net Income	-705.15	0.00	0.00	-705.15
**Total Liabilities			2,155,597.51	311,301.27	210,462,846.76	212,307,137.00
641000	08	Franchise Tax	130.15	0.00	0.00	130.00
651000	08	Misc. Expense	784.00	0.00	0.00	784.00
999200	08	FIT - Current - Other	-209.00	0.00	0.00	-209.00
** Total Income and Expense			-705.15	0.00	0.00	-705.15

Exhibit 3.12(d)(ii) Aircraft International Management Corporation (AIMC) Preferred Stock Portfolio
Company	Number of Shares	Par Value Per Share	Face Amount	Market Value
Puget Sound	160,000	100	16,000,000	16,800,000
Duke Power	20,000	100	2,000,000	2,125,000
Duke Power	30,000	100	3,000,000	3,217,500
Duke Power	47,000	100	4.700,000	4,888,000
Duke Power	118,350	100	11,835,000	12,781,800
Louisville Gas & Electric	43,100	100	4,310,000	4,396,200
Public Service Gas & Electric	77,500	100	7,750,000	7,711,250
Consolidated Edison	62,500	100	6,250,000	6,500,000
Consolidated Edison	89,000	100	8,900,000	9,256,000
Florida Power & Light	29,080	100	2,908,000	2,973,430
Ford Holdings Inc. Series B	252	100,000	25,200,000	24,822,000
Ford Holdings Series G	228	100,000	22,800,000	22,971,000
Ford Series N	30	100,000	3,000,000	3,120,000
Interstate Power	103,000	50	5,150,000	5,072,750
Southern Cal Edison	49,450	100	4,945,000	5,142,800
Southern Cal Edison	22,000	100	2,200,200	2.354,000
Pacific Gas & Electric	585,900	25	14,647,500	14,793,975
Pacific Gas & Electric	142,000	25	3,550,000	3,621,000
Virginia Electric Power	130,000	100	13,000,000	13,650,000
Appalachian Power	91,400	100	9,140,000	9,083,332
Appalachian Power	100,000	100	10,000,000	10,650,000
New York State Electric & Gas	280,000	25	7,000,000	7,350,000
New York State Electric & Gas	67,100	100	6,710,000	6,777.100
Ohio Power Company	122,500	100	12,250,000	12,250,000
TOTAL				212,307,137

EXHIBIT D

Determination of Fair Market Value

Fair market value ("FMV") of any asset, as of any day, means the price at which a willing seller would sell, and a willing buyer would buy, such asset, free and clear of all liens, security interests or other encumbrances, in an arm's length transaction for cash, without time constraints and without being under any compulsion to buy or sell.

In the event that it is necessary to determine the FMV of any asset, the Manager shall appoint an appraiser (the "First Appraiser") and, within fifteen (15) Business Days of receiving notice designating the First Appraiser, BT Investor shall appoint a second appraiser (the "Second Appraiser"). If the Second Appraiser is not timely designated, the determination of the FMV shall be made by the First Appraiser. The First Appraiser, or each of the First Appraiser and the Second Appraiser, shall submit its determination of the FMV to the Company and the Members within twenty (20) days of the date of its selection (or the selection of the Second Appraiser, as applicable). If there are two appraisers and their respective determinations of FMV vary by less than 10% of the higher determination, FMV shall be the average of the two determinations. If such determinations vary by 10% or more of the higher determination, the two appraisers shall promptly designate a third appraiser (the "Third Appraiser"). Neither the Company nor any Member shall provide, and the First Appraiser and the Second Appraiser shall be instructed not to provide, any information to the Third Appraiser as to the determinations of the First Appraiser and the Second Appraiser or otherwise influence the Third Appraiser in any way. The Third Appraiser shall submit its determination of FMV to the Company and the Members within twenty (20) days of the date of its selection. FMV shall be equal to the average of the two closest of the three determinations; provided that, if the difference between the highest and middle determination is no more than 105% and no less that 95% of the difference between the middle and lowest determinations, then FMV shall equal the middle determination.

Each appraiser selected pursuant to this Exhibit D shall be disinterested and must be a nationally recognized appraiser qualified to appraise the property being appraised.

		EXHIBIT E
FORM OF PCI NOTE
$_________________		[Date]
For value received, the undersigned (the "Maker") promises to pay to the order of ________________________, a ____________________ (" *Lender* "), the amount of ___________________ ($_______________) together with interest thereon at a rate per annum equal to ________________ (______%), in legal and lawful money of the United States of America. Accrued interest shall be payable on March 31, June 30, September 30 and December 31 (or if such day is not a Business Day, on the next Business Day thereafter of each year) (in each case, a " *Payment Date* ''). Interest on this Note shall accrue for the applicable period from December 31 up to the next March 31, from March 31 up to the next June 30, from June 30 up to the next September 30 and from September 30 up to the next December 31 (each, a " *Quarterly Interest Period* ''). For any interest period which is less than a full Quarterly Interest Period interest shall be computed based on the premise that a year contains 360 days consisting of twelve (12) months of thirty (30) days each and shall be charged on a per diem basis, For this Note the term " *Business Day* " means a day of the year on which' banks are not required or authorized to close in New York, New York:
This Note is due and payable upon [demand] [the earlier of (i) demand and (ii) _________, ________] (the " *Maturity Date* "). Demand for payment may be made in one or more installments, provided that the aggregate amount of all such demands shall not exceed the face amount hereof. [The unpaid principal balance hereof shall be due and payable on the Maturity Date.] This Note may be prepaid, in whole or in part, by the Maker without prepayment penalty.
It is expressly provided that upon default in the punctual payment of this Note or any part hereof, as the same shall become due and payable, the entire indebtedness evidenced hereby shall mature, at the option of the Lender. In the event this Note, or any part hereof, is collected through bankruptcy or other judicial proceedings by an attorney or is placed in the hands of an attorney for collection after maturity, then the undersigned agrees and promises to pay a reasonable attorney's fee for collection.
The Maker of this Note expressly waives all notices, demands for payment upon the Maturity Date, presentation for payment, protest and notice of protest, as to this Note, and consents that the Lender or other holder of this Note may at any time, and from time to time, upon request of or by agreement with the Maker, extend the maturity hereof or change the time or method of payments hereunder. The Maker of this Note further waives any right to plead the statute of limitations as a defense to any demand upon this Note and, in the event such waiver is declared invalid, Maker hereby agrees to extend the applicable statute of limitations for a period of four years from the date of expiration of the time limited for commencement of an 'action upon this Note by the applicable statute of limitations.
The Maker covenants and agrees that until this Note, together with interest and all other obligations included hereunder, are paid in full, it will not modify to any material extent or substantially terminate the Subscription Agreement dated as of November 30, 1993 between the Maker and Potomac Electric Power Company, except that the Maker may agree to an extension of the termination date of the Subscription Agreement.
The Maker will not create, assume or incur or suffer to be created, assumed or incurred or to exist any mortgage, lien, charge, Security interest or encumbrance of any kind upon, or pledge of, or subject to the prior payment of any indebtedness, any of its property or assets, whether now owned or hereafter acquired, or acquire or agree to acquire any property or assets subject to any conditional sale agreement or other title retention agreement (the foregoing mortgages, liens, charges, pledges, security interests, encumbrances and priority payments, and the rights of others under conditional sales agreements and other title retention agreements, being herein sometimes collectively called "liens"); provided however, that the foregoing restrictions will not apply to:
	(i) liens securing taxes, assessments or governmental charges or levies or the claims or demands of materialmen, mechanics, carriers, warehousemen, landlord and other like persons;
	(ii) liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance, social security and other like laws;
	(iii) purchase money mortgages or other purchase money liens or conditional sale, lease-purchase or other title retention agreements upon or in respect of property acquired or leased for in the ordinary course of its business by the Maker;
	(iv) liens on any assets of the Maker or any of its subsidiaries which may constitute "Margin Stock" (as defined in Regulation G of the Board of Governors of the Federal Reserve System); or
	(v) other mortgages or liens in respect of property owned, acquired or leased by the Maker not permitted by clauses (i) through (iv); provided that the property so encumbered pursuant to this clause (v) shall not have a market value in excess of 50% of the amount by which the Maker's total assets (on a conditional basis with its subsidiaries) exceeds the encumbrances made as provided in clause (iii) above.
The Maker (including its consolidated subsidiaries) will maintain a minimum tangible net worth (calculated in accordance with generally accepted accounting principles) in effect on the date of this Note of at least $100,000,000.
The fair market value of investment grade marketable securities owned by the Maker (including its consolidated subsidiaries) will at no time be less than $150,000,000.
This Note shall be governed by the laws of the State of New York.
		POTOMAC CAPITAL INVESTMENT CORPORATION By: _____________________________ Name: Title:

EXHIBIT G
FORM OF GUARANTY OF OBLIGATIONS
GUARANTY OF OBLIGATIONS dated as of November 13, 1995 (this " *Guaranty* ") by AMP Funding, L.L.C, a Delaware limited liability company (" *Guarantor* ''), in favor of Potomac Capital Joint Leasing Corporation, a Delaware corporation (" *PCJL* '').
PRELIMINARY STATEMENT
Guarantor is a member of RAMP Investments, L.L.C., a limited liability company organized under the laws of the State of Delaware (the "Company"). Heretofore, Guarantor, as assignee of Potomac Capital Investment Corporation, a Delaware corporation ("PCI"), entered into a certain Assignment and Assumption Agreement dated the date hereof assuming all obligations of PCI under a certain promissory note dated October 18, 1995, in the amount of $233,000,000.00 payable to PCJL (the "Note''). Concurrently herewith, Guarantor is entering into an Assignment and Assumption Agreement dated as of the date hereof with the Company (the "Assumption Agreement'') whereby the Company shall assume all obligations of Guarantor under the Note.
NOW, THEREFORE, in consideration of the premises, Guarantor hereby agrees as follows:
*Section 1. Guaranty.* The Guarantor hereby unconditionally guarantees the punctual payment when due; whether at stated maturity, by acceleration or otherwise, of all obligations of the Company now or hereafter existing under the Assumption Agreement and the Note, whether for principal, interest, fees, expenses or otherwise (such obligations being the " *Obligations* ''), and agrees to pay any and all expenses (including counsel fees and expenses) incurred by PCJL in enforcing any rights under this Guaranty. Without limiting the generality of the foregoing, the Guarantor's liability shall extend to all amounts which constitute part of the Obligations and would be owed by the Company under the Assumption Agreement and the Note but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company.
*Section 2. Guaranty Absolute* . The Guarantor guarantees that the Obligations will be paid strictly in accordance with the terms of the Assumption Agreement and the Note, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of PCJL with respect thereto. The obligations of the Guarantor under this Guaranty are independent of the Obligations, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Company or whether the Company is joined in any such action or actions. The liability of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of:
	(i) any lack of validity or enforceability of the Assumption Agreement, the Note or any other agreement or instrument relating thereto;
	(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from the Assumption Agreement or the Note;
	(iii) any taking, exchange, release or non-perfection of any collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations;
	(iv) any manner of application of collateral, or proceeds thereof, to all or any of the Obligations, or any manner of sale or other disposition of any collateral for all or any of the Obligations or any other assets of the Company;
	(v) any change, restructuring or termination of the corporate structure or existence of the Company; or
	(vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Company or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by PCIL upon the insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment had not been made.
*Section 3. Guarantor's Waiver; Remedies; No Subrogation* . Guarantor hereby waives to the extent permitted by law: (a) notice of acceptance of this Guaranty, the Assumption Agreement or the Note; (b) promptness, diligence, presentment and demand for payment; (c) protest and notice of dishonor or of default; (d) any right, defense or other benefit it may have with respect to this Guaranty (including, without limitation, any right to terminate, or to assert any defense to its obligations under this Guaranty) arising under the Bankruptcy Code of the United States as at any time amended, or under any successor thereto; and (e) any other circumstance which might otherwise constitute a defense available to it (other than a defense of failure to mitigate damages) or a discharge of it. No failure on the part of PCJL to exercise, and no delay in exercising, any rights hereunder or under the Assumption Agreement or the Note shall operate as a waiver thereof, nor shall any such delay or any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Notwithstanding any payment or payments made by Guarantor hereunder or any set-off or application of funds of Guarantor by PCJL, Guarantor shall not be entitled to be subrogated to any of the rights of PCJL against the Company or any collateral security or guarantee or right of offset held by PCJL for the payment of the Obligations, nor shall Guarantor seek or be entitled to seek any reimbursement from the Company in respect of payments made by Guarantor hereunder, until all amounts owing to PCJL by the Company on account of the Obligations are paid and performed in full.
*Section 4. Continuing Guaranty* . This Guaranty is a present and continuing guaranty of payment and not of collection and is not conditional or contingent upon any attempt to collect from the Company or any other person. Guarantor waives any right, as a condition to the enforcement of this Guaranty, that any action or other proceeding be brought against the Company or that any remedy be exercised against the Company.
*Section 5. Representations and Warranties* . Guarantor represents and warrants to PCJL that as of the date hereof:
	(a) Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has the corporate power and authority to own its property and assets, carry on its business as it is now conducted and to enter into and perform its obligations under this Guaranty.
	(b) This Guaranty has been duly authorized by all necessary corporate action on the part of Guarantor and has been duly executed and delivered by Guarantor, and the execution, delivery and performance of this Guaranty by Guarantor do not (i) require any approval of the stockholders of Guarantor or any approval or consent of any trustee or holder of any indebtedness or obligation of Guarantor, (ii) contravene any applicable law. regulation, judgment, order or contractual restriction applicable to or binding on Guarantor, or (iii) contravene or result in any breach of or constitute any default under, or result in the creation or imposition of any lien upon the Aircraft under Guarantor's charter or by-laws or any indenture, mortgage, loan agreement, lease or other agreement or instrument to which Guarantor is a party or by which Guarantor or any of its properties is bound.
	(c) This Guaranty constitutes a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with the terms hereof, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and by general principles of equity.
	(d) There is no action, suit or proceeding pending or, to the knowledge of Guarantor, threatened against Guarantor before or by any federal, state, municipal, foreign or other governmental authority, agency, instrumentality or court that, if determined adversely to Guarantor, would materially adversely affect the ability of Guarantor to perform its obligations under this Guaranty.
*Section 6. Rights and Powers.* PCJL may proceed, either in its own name or otherwise, to protect and enforce any or all of its rights under this Guaranty in equity, at law o/' by other appropriate proceedings.
*Section 7. Modification of Guaranty* . No modification, amendment or waiver of any provision of, or any consent required by, this Guaranty, nor any consent to any departure by Guarantor therefor, shall in any event be effective unless the same shall be in writing and signed by Guarantor and PCJL.
*Section 8. Successors and Assigns* . This Guaranty shall be binding upon the successors and assigns of Guarantor (it being understood that Guarantor shall not be entitled to assign its obligations under this Guaranty) and all covenants and agreements by or on behalf of Guarantor that are contained in this Guaranty shall inure to the benefit of the successors and assigns of PCJL.
*Section 9. Scope and Termination* . This Guaranty constitutes the entire agreement of Guarantor and supersedes all prior written and oral agreements and understandings with respect to the subject matter hereof between Guarantor (in such capacity) and PCJL. Guarantor's obligations under this Guaranty shall continue in full force and effect until the date on which all of the Obligations have been paid in full.
*Section 10. Notices* . All notices and other communications to Guarantor shall be in writing and addressed to it at 1575 Delucchi Lane, Suite 115, Reno, Nevada 89502 Attention: Contracts Administrator, or at such other address as Guarantor may from time to time provide by notice. Communications to PCJL shall be in writing and addressed to it at 1105 North Market Street, Suite 1300, P.O. Box 8985, Wilmington, DE 17879.
Section 11. GOVERNING LAW . THIS GUARANTY SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
*Section 12. Severability* . Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered by an officer thereunto duly authorized as of the day and year first above written.
		AMP FUNDING, L.L.C. By: _____________________________ Name: Title

EXHIBIT H
LEASE CERTIFICATE
The undersigned hereby certify that the Master Leasing Agreement dated as of November 13, 1995 by and among (a) Wilmington Trust Company as Owner Trustee and Lessor, (b) PCI Air Management Partners, L.L.C. as Owner Participant and (c) Potomac Capital Investment Corporation as Lessee is and will at all times be a " *Net Lease* " and a " *Full Payout Lease* ," as those terms are defined below.
As used in this certificate,
" *Net Lease* " means a lease under which the lessor will not, directly or indirectly, provide for or be obligated to provide for:
	(i) the servicing, repair or maintenance of the leased property during the lease term;
	(ii) the purchasing of pans and accessories for the leased property;
	(iii) the loan of replacement or substitute property when the leased property is being serviced;
	(iv) the purchasing of insurance for the lessee except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance; and
	(v) the renewal of any license or registration for the leased property unless such action by the lessor is clearly necessary to protect its interest as an owner or financier of the property.
" *Full Payout Lease* " means a lease of not more than forty (40) years of property that was acquired by the lessor specifically for a leasing transaction, and under the terms of which the lessor can reasonably expect to realize a return of its full investment in the leased property plus the estimated cost of financing the property over the term of the lease from:
	(i) rentals;
	(ii) estimated tax benefits (e.g., investment tax credits, net economic gain from tax deferral from accelerated depreciation, and other tax benefits with a substantially similar effect); and
	(iii) the estimated residual value of the property at the expiration of the initial term of the lease, which in no case shall exceed twenty-five percent (25 %) of the acquisition cost of the property to the lessor.
IN WITNESS WHEREOF, the undersigned have duly executed this certificate this 13 ^th day of November, 1995.
		POTOMAC CAPITAL INVESTMENT CORPORATION By: _________________________________ Title: ________________________________
		PCI AIR MANAGEMENT PARTNERS, L.L.C. By: PCI Air Management Corporation, By: ____________________________ Title: ___________________________

EXHIBIT I

FORM OF MASTER LEASING AGREEMENT.

____________________________________________________________________________

MASTER LEASING AGREEMENT

Dated as of November 14, 1995

Among

WILMINGTON TRUST COMPANY,
not in its individual capacity
except as otherwise expressly
set forth herein, but solely
as Owner Trustee and Lessor,

PCI AIR MANAGEMENT PARTNERS, L.L.C.

as Owner Participant,

and

POTOMAC CAPITAL INVESTMENT CORPORATION,

as Lessee

____________________________________________________________________________

MASTER LEASING AGREEMENT
Master Leasing Agreement, dated as of November 14, 1995, by and among Wilmington Trust Company, a Delaware banking corporation, not in its individual capacity, except as otherwise expressly set forth herein, but solely as Trustee under each of the Trust Agreements (as defined below) (herein called "Lessor"); PCI Air Management Partners, L.L.C., a Delaware limited liability company, as beneficial owner of the Trust Estates (defined below) (herein called "Owner Participant") and Potomac Capital Investment Corporation, a Delaware corporation (herein called "Lessee"), with Individual Leasing Records No. 1 through 5 attached.
In consideration of the mutual covenants contained herein, the parties hereto agree as follows:
SECTION 1. Definitions and Rules of Interpretation.
(a) Definitions. As herein used:
" Act " shall mean the Federal Aviation Act of 1958, as amended (codified at Title 49 U.S.C.).
" Aircraft " shall mean each of the Airframes together, in the case of each Airframe, with the Engines listed opposite such Airframe on Exhibit A attached hereto (as such Exhibit may be amended from time to time), whether or not any of such Engines is at any time installed on such Airframe.
" Airframe " shall mean and include each of the airframes described in Exhibit A attached hereto (as such Exhibit may be amended from time to time) (excluding the Engines or engines installed thereon), listed by United States FAA Registration Number and manufacturer's serial number, and any airframes substituted therefor or pursuant to the terms of this Agreement, together in each case with any and all Parts thereof (other than Engines or engines), as long as title thereto remains vested in Lessor pursuant to the terms of this Agreement.
" Affiliate " of any Person shall mean any other Person that, directly or indirectly, controls or is controlled by or is under common control with such Person. For purposes of this definition, the term "controls," "controlled by" or "under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise; provided, however, that Lessee shall not be considered an Affiliate of either Lessor or Owner Participant for purposes of this Agreement and Lessor in its individual capacity shall not be considered an Affiliate of either Lessor or Owner Participant.
" AM-BT " shall mean AM-BT Nevada, Inc. a Nevada corporation, and its successors and assigns.
" Bank Holding Company Eligible Lease " shall mean a lease that is a Net Lease and a Full Payout Lease and that contains a tax indemnity for taxes other than federal income taxes that are attributable solely to the use or presence of the Aircraft in the taxing jurisdiction.
" Bankruptcy " shall mean, with respect to any person, a " Voluntary Bankruptcy " or an " Involuntary Bankruptcy ." A "Voluntary Bankruptcy" shall mean, with respect to any Person, the inability of such Person generally to pay its debts as such debts become due, or an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors; the filing of any petition or answer by such Person seeking to adjudicate itself a bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property; or corporate action taken by such Person to authorize any of the actions set forth above. An "Involuntary Bankruptcy" shall mean, with respect to any Person, without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation, or the filing of any such petition against such Person which petition shall not be dismissed within 90 days, or, without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person which order shall not be dismissed within 90 days.
" Basic Term " shall mean, as to any Lease, the period commencing on the Basic Term Commencement Date for such Lease and ending on the Expiration Date for such Lease, or such earlier date on which such Lease is terminated pursuant to the terms thereof.
" Basic Term Commencement Date " shall mean, as to any Lease, except as otherwise provided in an applicable ILR, January 2, 1996.
" Business Day " shall mean a day of the year which is not a Saturday or Sunday and on which banks are not required or authorized to be closed in New York, New York.
" Code " shall mean the Internal Revenue Code of 1986, as amended from time to time.
" Contribution Agreement " shall mean the Contribution Agreement, dated the date of this Agreement, between AMP Investments, L.L.C., a Delaware limited liability company, and the Owner Participant.
" Contribution value " shall mean, with respect to an Aircraft, the amount identified as such with respect to such Aircraft in Exhibit A to this Agreement.
" Delivery Date " shall mean, as to any Aircraft, the date specified as the Delivery Date of such Aircraft in the ILR for such Aircraft.
" Dollars " or " S " shall mean the legal currency of the United States.
" Engine " shall mean and include each of the engines described in Exhibit A attached hereto (as such Exhibit may be amended from time to time), listed by manufacturer's serial number, whether or not installed on the relevant Airframe, and any engines substituted therefor pursuant to the terms of this Agreement, together in each case with any and all Parts thereof, as long as title thereto remains vested in Lessor pursuant to the terms of this Agreement.
" Event of Default " shall mean an event specified in Section 15 of this Agreement.
" Event of Loss " shall mean any of the following events with respect to an Aircraft, an Airframe or an Engine, in each case, occurring prior to the Expiration Date with respect to such property, (i) loss of such property or the use thereof due to theft or disappearance of such property for a period of 180 days, or such longer period not to exceed 180 days beyond such 180-day period, but only so long as the location of the property is known and Lessee is diligently pursuing the recovery of such property, but in no event shall such period extend beyond the end' of the applicable Lease Term; (ii) loss of such property or of the use thereof due to destruction of or damage to such property that renders repair uneconomic to Lessee or that renders such property permanently unfit for normal use by Lessee for any reason whatsoever; (iii) any damage to such property or other event that results in an insurance settlement with respect to such property on the basis of an actual or constructive total loss; (iv) any seizure, condemnation, confiscation, taking of title to or use of, or requisition of title to or use of, such property by any governmental authority or purported governmental authority for a period in excess of the lesser of 365 days and the end of the balance of the applicable Lease Term, provided that, if such loss of use results from action by the United States or any agency thereof, such loss of use shall be an Event of Loss only if such loss of use continues beyond the end of the applicable Lease Term; (v) the use in the normal course of business by Lessee or any sublessee of such property is prohibited for a period of twelve consecutive months or until the end of the applicable Lease Term, whichever occurs first, as a result of any rule, regulation, order or other action by any applicable governmental authority having jurisdiction over the use of such property, provided that if Lessee, prior to the expiration of such 12-month period is diligently taking all steps that are necessary to permit the normal use of such property by Lessee, such period shall be extended for an additional 12 months, but in no event beyond the end of the applicable Lease Term; or (vi) in the case of an Aircraft subject to a Permitted Sublease, the occurrence of an event of loss under such Permitted Sublease. An Event of Loss with respect to an Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe with respect thereto.
" Expiration Date " shall mean, as to the Lease of any Aircraft, the date specified as the Expiration Date of the Lease of such Aircraft set forth in the ILR for such Aircraft.
" FAA " shall mean the United States Federal Aviation Administration or its successor.
" Fair Market Value " as to .any Aircraft as of any day shall mean the price at which a willing seller would sell, and a willing buyer would buy, such Aircraft, free and clear of all liens, security interests or other encumbrances, in an arm's length transaction for cash, without time constraints and without being under any compulsion to buy or to sell.
" Full Payout Lease " shall mean a lease of not more than forty (40) years that is the functional equivalent of an extension of credit to the lessee of the property, from which the lessor can reasonably expect to realize a return of its full investment in the leased property plus the estimated cost of financing the property over the term of the lease from (i) rentals; (ii) estimated tax benefits; and (iii) the estimated residual value of the property at the expiration of the initial term of the lease, which in no event shall exceed 25% of the acquisition cost of the property to the Lessor; provided that, in the event of any change in any applicable state or federal banking law after the date of this Agreement, the meaning of "Full Payout Lease" shall be changed accordingly.
" Incipient Event of Default " shall mean an event that, with the lapse of time, would become an Event of Default under Section 15(a) of this Agreement.
" Indemnified Person " has the meaning specified in Section 10 of this Agreement.
" Individual Leasing Record " or " ILR " shall mean a document with respect to each Aircraft in the form attached hereto as Exhibit "B" (with such variations as shall be necessary to permit the particular ILR to be in recordable form and to reference the country of registry of any aircraft that is not registered in the United States of America) executed and delivered by Lessee to Lessor, and executed by Lessor and Owner Participant, setting forth a full description of such Aircraft, the Interim Term (if any), the Basic Term, the Delivery Date and the Expiration Date under the Lease of such Aircraft, and such other terms as the parties may desire, and with a schedule attached to such ILR setting forth the Rent (and Interim Rent, if any), and Stipulated Loss Values, in each case, for the applicable Lease.
As between Lessor, Owner Participant and Lessee the signature of Lessee on an Individual Leasing Record shall constitute acknowledgment by Lessee that the Aircraft covered by such ILR has been delivered in good condition and accepted for lease by Lessee as of the applicable Delivery Date.
Each Individual Leasing Record shall contain a short form of lease to be executed by each of the parties reading substantially as follows:
	"The undersigned Lessor hereby leases to the undersigned Lessee and Lessee acknowledges delivery to it in good condition of the equipment described herein. The covenants, terms and conditions of this lease are those appearing in the Master Leasing Agreement among the undersigned Lessor, Owner Participant and Lessee dated as of November __, 1995, which covenants, terms and conditions are hereby incorporated by reference."
" Interim Rent " for the Lease of any Aircraft shall mean the amount specified in the applicable ILR for such Aircraft.
" Interim Term " for the Lease of any Aircraft shall mean the period commencing on the Delivery Date for such Aircraft and ending immediately prior to the Basic Term Commencement Date for such Aircraft.
" Late Payment Rate " shall mean a percentage per annum equal to 2.0% above the Prime Rate.
" Lease " shall have the meaning set forth in Section 2 of this Agreement.
" Lease Term " for any Lease shall mean and include the Interim Term and the Basic Term for such Lease.
" Lessor's Lien " shall mean any Lien which results from (i) acts or omissions of Owner Participant or Lessor (in its individual capacity or as Trustee under the Trust Agreement(s)) that are not permitted or contemplated by this Agreement or, with respect to Lessor in its individual capacity, the Trust Agreement, (ii) claims against Owner Participant or Lessor (in its individual capacity or as Trustee under the Trust Agreement(s)), not related to the ownership of the Aircraft or any of the 'transactions contemplated by this Agreement or, with respect to Lessor in its individual capacity, the Trust Agreement, (iii) claims against Owner Participant or Lessor (in its individual capacity or as Trustee under the Trust Agreement(s)), with respect to Taxes for which Lessee is not required to indemnify Owner Participant or Lessor (in its individual capacity or as Trustee under the Trust Agreement(s)), respectively, pursuant to the terms of this Agreement; provided , that any Liens imposed with respect to Taxes imposed on Lessor in its individual capacity (other than Taxes imposed on fees received under the Trust Agreement(s) or Taxes imposed as a result of the gross negligence or wilful misconduct of Lessor in its individual capacity) shall be deemed to be attributable to Lessor as Trustee under the Trust Agreement(s), and not in its individual capacity, for purposes of this Agreement, and (iv) claims against Owner Participant or Lessor (in its individual capacity or as Trustee under the Trust Agreement(s)), resulting from the transfer of the Aircraft that is not expressly contemplated by this Agreement or, with respect to Lessor in its individual capacity, the Trust Agreement. For purposes of this definition, the terms "Lessor" and "Owner Participant" shall include any Affiliate of Lessor and Owner Participant, respectively, and, in the case of Owner Participant, any partner or member of Owner Participant.
" Lien " shall mean any mortgage, lien, pledge, claim, charge, security interest, title defect or encumbrance of any kind, including any conditional sale or other title retention agreement, any lease in the nature thereof, or the filing of or agreement to give any financing statement.
" Master Lease Termination Fee ", with respect to any Aircraft, shall be computed in accordance with the formula set forth on Exhibit C to this Agreement.
" Material Adverse Effect " shall mean, as to any Person, a material adverse effect on the properties, business, results of operations, prospects or financial condition of such Person or such Person's ability to comply with the terms of any Lease.
" Net Lease " shall mean a lease under which the lessor will not, directly or indirectly, provide for (i) the servicing, repair or maintenance of the leased property during the lease term; (ii) the purchasing of parts and accessories for the leased property; (iii) the loan of replacement of substitute property while the leased property is being serviced; (iv) the purchasing of insurance for the lessee except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance; and (v) the renewal of any license or registration for the leased property, unless such action by the lessor is clearly necessary to protect its interest as an owner or financier of the leased property, provided that, in the event of any changes in any applicable state or federal banking law after the date of this Agreement, the meaning of "Net Lease" shall be changed accordingly.
" Operating Agreement " shall mean the Operating Agreement of PCI Air Management Partners, L.L.C., a Delaware limited liability company, dated November 14, 1995, by and among AMP Investments, L.L.C., a Delaware limited liability company, and PCI Air Management Corporation, a Nevada corporation, as members, as the same may be amended or supplemented from time to time.
" Part " shall mean, with respect to an Aircraft, Airframe or Engine, any and all parts, appliances, instruments, appurtenances, accessories, furnishings and other equipment of whatever nature (other than complete Engines, engines, Airframes or airframes) which, in each case, are from time to time incorporated therein, attached thereto or installed thereon or which have been removed therefrom, but only where title to such removed Part remains vested in Lessor in accordance with the terms of this Agreement.
" Payment Event of Default " shall mean any Event of Default under' Section 15(a) of this Agreement.
" Permitted Liens " shall mean (i) Lessor's Liens, (ii) the respective rights and interests of Lessee, Lessor and any Permitted Sublessee as provided in this Agreement, and the rights of others expressly provided in Section 7 hereof, (iii) Liens for Taxes either not yet due or being contested by Lessee or a Permitted Sublessee in good faith by appropriate proceedings, so long as such proceedings do not involve any material danger of the sale, forfeiture or loss of any Aircraft, Airframe or Engine, title thereto or any interest therein and do not materially' interfere with the use or disposition of any Aircraft or any Part thereof or the payment of Rent, and as to which Lessee or a Permitted Sublessee shall have provided adequate reserves for the payment of such Taxes, (iv) materialman's, mechanic's, vendor's, workman's, repairman's or other like Liens arising out of the ordinary course of business of Lessee or any Permitted Sublessee securing obligations that are not overdue for a period of more than 90 days or are being contested in good faith by appropriate proceedings so long as during such 90 day period there is not, or such proceedings do not involve, any material danger of the sale, forfeiture or loss of the relevant Aircraft, Airframe, or Engine, title thereto or any interest therein and do not materially interfere with the use or disposition of any Aircraft or any Part thereof or the payment of Rent, and (v) Liens arising out of judgments or awards against Lessee or a Permitted Sublessee with respect to which at the time an appeal or proceeding for review is being diligently prosecuted in good faith and there shall have been secured a stay of execution pending such appeal or proceeding for review.
" Permitted Sublease " shall mean any sublease or sub-sublease that is permitted under the terms of Section 7 of this Agreement.
" Permitted Sublessee " shall mean any sublessee or sub-sublessee under a Permitted Sublease.
" Person " shall mean any individual, corporation, partnership, joint venture, association, trust, unincorporated organization or government or any agency or political subdivision thereof.
" Prime Rate " shall mean the prime rate, base rate or other equivalent rate announced from time to time by Citibank, N.A. Any change in the Prime Rate shall be effective on the date announced by Citibank, N.A. as the effective date of such change.
" Rent " for the Lease of any Aircraft, shall mean the amount payable on each Rent Payment Date during the applicable Basic Term pursuant to Section 5 hereof, as specified in the schedule attached to the applicable ILR for such Aircraft.
" Rent Payment Date " shall mean, with respect to an Aircraft, each date specified as a Rent Payment Date in the Schedule attached. to the ILR for such Aircraft. Except as otherwise provided in the applicable ILR, the Rent Payment Dates under the Lease of each Aircraft shall be January 2, April 2, July 2 and October 2 of each year during the Lease Term for such Aircraft.
" Restoration " shall have the meaning set forth in Section 13(a) hereof.
" Severable Part " shall have the meaning set forth in Section 8(d) of this Agreement.
" Stipulated Loss Value " for the Lease of any Aircraft as of any date during the applicable Lease Term, shall mean an amount equal to the product of the Contribution Value for such Aircraft multiplied by the percentage set forth in the schedule of Stipulated Loss Values attached to the ILR for such Aircraft opposite the date that coincides with or, if such date is not a date for which a Stipulated Loss Value percentage has been calculated, the date that immediately precedes such date.
" Substituted Equipment " shall have the meaning set forth in Section 13(b) of this Agreement.
" Tax " shall have the meaning set forth in Section 11 of this Agreement.
" Trust Agreements " shall mean, collectively' the following agreements:
	(1) Trust Agreement [N511P], dated as of November 14, 1995, between PCI Air Management Partners, L.L.C., as successor owner participant, and the Trustee, in connection with one Boeing 747-212B aircraft, bearing manufacturer's serial number 21162 and FAA Registration Number N511P, as the same may be amended or supplemented from time to time;
	(2) Trust Agreement [N31030], dated as of November 14, 1995, between PCI Air Management Partners, L.L.C., as successor owner participant, and the Trustee, in connection with one Lockheed L-1011-385-1-15 aircraft, bearing manufacturer's serial number 193B-1111 and FAA Registration Number N31030, as the same may be amended or supplemented from time to time;
	(3) Trust Agreement [N81026], dated as of November 14, 1995, between PCI Air Management Partners, L.L.C., as successor owner participant, and the Trustee, in connection with one Lockheed L-1011-385-1-15 aircraft, bearing manufacturer's serial number 193B--1104 and FAA Registration Number N81026, as the same may be amended or supplemented from time to time;
	(4) Trust Agreement [N81025], dated as of November 14, 1995, between PCI Air Management Partners, L.L.C., as successor owner participant, and the Trustee, in connection with one Lockheed L-1011-385-1-15 aircraft, bearing manufacturer's serial number 193B-1098 and FAA Registration Number N81025, as the same may be amended or supplemented from time to time;
	(5) Trust Agreement [N81028], dated. as of November 14, 1995, between PCI Air Management Partners, L.L.C., as successor owner participant, and the Trustee, in connection with one Lockheed L-1011-385-1-15 aircraft, bearing manufacturer's serial number 193B-1108 and FAA Registration Number N81028, as the same may be amended or supplemented from time to time;
and each other trust agreement referred to in an Individual Leasing Record executed and delivered pursuant to this Lease.
" Trust Estate " shall have the meaning set forth in the Trust Agreement(s).
" Trustee " shall have the meaning set forth in the Trust Agreement(s).
(b) Rules of Interpretation . The following rules shall apply to this Agreement:
	(i) the singular includes the plural and the plural includes the singular;
	(ii) or" is not exclusive and "include" and "including" are not limiting;
	(iii) a reference to a Person includes its permitted successors and assigns;
	(iv) a reference herein to Section, Exhibit or Schedule is to the relevant Section, Exhibit or Schedule of this Agreement or an applicable ILR; and
	(v) all references to Lessor, unless the context otherwise requires, shall be deemed a reference to the Lessor under the applicable Lease of the applicable Aircraft.
SECTION 2. Agreement for Lease of Aircraft.
(a) This Agreement sets forth the terms and conditions which shall govern the leasing by Lessor to Lessee of any Aircraft described in any Individual Leasing Record now or hereafter executed by Lessor, Owner Participant and Lessee and incorporating this Agreement by specific reference. Subject to the terms and conditions of such Individual Leasing Records as Lessor, Owner Participant and Lessee may choose to execute and the terms and conditions of this Agreement, Lessor shall lease to Lessee and Lessee shall lease from Lessor the Aircraft. No Individual Leasing Record shall be effective unless and until executed by Lessor, Owner Participant and Lessee. Upon the execution and delivery of this Agreement and one or more of such Individual Leasing Records, there shall be effected a contract to lease the Aircraft described therein (each, a "Lease") in accordance with the terms hereof and of such Individual Leasing Record. Each such Lease shall be a separate and severable obligation of Lessee, Owner Participant and Lessor.
(b) Lessor, Owner Participant and Lessee hereby declare that each Lease is, and is intended to be, (i) a true lease and not a lease intended as security or a lease in the nature of a security interest and (ii) a Bank Holding Company Eligible Lease. Lessor will have title to and will be the legal owner, and Owner Participant will be the beneficial owner, in each case, for all purposes of each Aircraft to be leased pursuant to a Lease, and Lessee will not acquire any right, equity, title or interest in any such Aircraft, except the right, as lessee, to use the same under the terms of the applicable Lease.
SECTION 3 . Delivery .
(a) Delivery of the Aircraft . Lessor hereby agrees to accept delivery of, and simultaneously to lease to Lessee under the terms of this Lease and the applicable Individual Leasing Record, and Lessee hereby agrees to lease from Lessor, each of the Aircraft. Lessor shall not be liable to Lessee for any failure or delay in obtaining any Aircraft or making delivery thereof.
(b) Execution and Delivery of the Documents . Not later than the Delivery Date with respect to each Aircraft, the following conditions shall have been satisfied:
	(i) the following documents shall have been duly authorized, executed and delivered by the respective parties thereto, and shall be in full force and effect: (A) this Agreement, along with an Individual Leasing Record for such Aircraft, (B) the Trust Agreement, (C) the Operating Agreement, (D) the Contribution Agreement, and (E) an AC Form 8050-2 Bill of Sale and an additional full warranty bill of sale for each Aircraft, both executed by Lessee in favor of Lessor;
	(ii) Lessee shall have delivered to Lessor all necessary consents and approvals of any applicable governmental, regulatory or other authority (including a certificate of airworthiness issued by the FAA and an opinion of FAA counsel with respect to title to such Aircraft and filing for recordation of this Agreement and the applicable ILR);
	(iii) Owner Participant shall have received appropriate title papers for such Aircraft;
	(iv) Lessee shall have delivered to Lessor a copy of any sublease and sub-sublease in existence on the Delivery Date with respect to such Aircraft which such subleases and sub-subleases shall comply with the provisions of Section 7 hereof; and
	(v) Each of Lessor and Owner Participant shall have received a copy of an officer's certificate and secretary's certificate of Lessee in form and substance satisfactory to it.
(c) Assignment of Warranties, Etc . To the extent permitted by applicable law, Lessor hereby assigns to Lessee any and all warranties and indemnities of and claims against suppliers, dealers, manufacturers, vendors, contractors and subcontractors relating to each Aircraft. Lessor hereby irrevocably appoints Lessee as its attorney-in-fact and agent with full authority in the place and stead of Lessor and in the name of Lessor or otherwise, at Lessee's sole cost and expense, from time to time during the applicable Lease Term (except, in the case of any Lease, at such times as an Event of Default with respect to such Lease shall have occurred and be continuing) to assert and enforce (including compromise, waiver or settlement thereof) for Lessor's account whatever claims and rights Lessor may have against suppliers, dealers, manufacturers, vendors, contractors and subcontractors relating to each Aircraft or any component thereof, whether under warranty, product liability claim or otherwise. Any amount received by Lessee in respect of any such claim or right shall be applied in accordance with Section 13 of this Agreement.
SECTION 4 . Lease Term . Subject to the acceptance and delivery of an Aircraft and to the other requirements described in Section 3 hereof, the Lease . Term for such Aircraft shall commence on the Delivery Date for such Aircraft and shall end on the applicable Expiration Date, or on such earlier date on which this Agreement or the applicable ILR shall terminate pursuant to the terms hereof or thereof. Upon expiration of the applicable Lease Term or other termination of the applicable Lease for each Aircraft, Lessee shall return such Aircraft to Lessor (in accordance with the provisions set forth in Section 14 of this Agreement).
SECTION 5 . Rent . Lessee shall pay Interim Rent with respect to the Interim Term for an Aircraft in a single installment on the date and in the amount specified in the applicable ILR with respect to such Aircraft. Lessee shall pay Rent with respect to the Basic Term for the Lease of an Aircraft quarterly in arrears, on each Rent Payment Date for such Aircraft, in the-amounts specified in the Schedule of Rent attached to the applicable ILR for such Aircraft. For purposes of this Agreement and except as otherwise provided in an applicable ILR, a "year" during a Lease Term shall run from January 2 to January 1 of the following year. If Lessor shall not receive payment of Rent or Interim Rent for any Aircraft when due hereunder, Lessee shall pay a late payment charge to Lessor on such late payment at a rate equal to the Late Payment Rate for the period during which such Rent or Interim Rent, as the case may be, remains due and unpaid. If the Lease of an Aircraft terminates during a year (including pursuant to the stated Expiration Date in any ILR), Rent or Interim Rent, as the case may be, shall be prorated based on the number of days during such year that such Aircraft was subject to such Lease, and such prorated Rent or Interim Rent shall be due on the date of such termination. All payments described in this Section 5 shall be made in immediately available Dollars on the date payable, or if such date shall not be a Business Day, on the following Business Day, and shall be paid to Lessor by or before noon, local time, at the following address:
Wilmington Trust Company Rodney Square North 1100 N. Market Street Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration Reference: PCI/PCI Air Management Partners, L.L.C.
SECTION 6 . Use of Aircraft .
(a) Lessor as Owner for all Purposes . Lessor and Lessee hereby acknowledge and agree that each Aircraft shall at all times be the sole and exclusive property of Lessor, and Lessee shall have no right, title or interest therein but only the right to use the same as herein provided. So long as no Event of Default has occurred and is continuing under the Lease for an Aircraft, Lessee and any Permitted Sublessee may use such Aircraft during the applicable Lease Term in the regular course of its business in accordance with the terms hereof and of the applicable ILR.
(b) Licenses; Registration; Expenses . Lessee shall pay all costs, expenses, fees and charges incurred in connection with the possession, maintenance, repair and use of each Aircraft during the Lease Term with respect thereto. Lessee, at its own expense, shall (i) procure and maintain in effect all licenses, registrations, certificates, permits, approvals and consents required by any governmental authority in connection with the use or possession of each Aircraft, (ii) use every reasonable precaution to prevent loss or damage to each Aircraft and to prevent injury to third persons or property of third persons, (iii) supply the necessary support, equipment and other items required in the use of each Aircraft, and (iv) cooperate fully with Lessor and all insurance companies providing insurance in accordance with Section 9 of this Agreement in the investigation and defense of any claims and suits. Lessee shall (or shall cause a Permitted Sublessee to), at its own cost and expense, as of the applicable Delivery Date, cause each Aircraft to be and at all times to remain duly.-registered in the name of Lessor (and Lessor and Owner Participant will undertake all actions necessary to permit registration in the name of Lessor) under the Act, or, if applicable, the laws of such other country of registry-referenced in the applicable ILR. In addition, to the extent it is legally able to do so, Lessee shall procure and maintain in effect, at its own expense, all other licenses, registrations, certificates, permits, approvals and consents required by federal, state or local laws or by any governmental authority. Lessee shall promptly and duly execute, deliver, file and record all such documents, statements, filings and registrations, and take such further action as Lessor from time to time shall reasonably request in order to establish, perfect and maintain Lessor's title to and interest in each Aircraft as against Lessee or any third party (other than UCC filings showing Lessee as debtor or lessee). Lessee shall take no written position (including the filing of any tax return) that would be contrary to the position that Lessor is the legal owner and Owner Participant is the beneficial owner of each Aircraft. If Lessor reasonably requests, Lessor may supply. Lessee with a list of all of the Aircraft leased hereunder and, upon delivery of such list, Lessee shall supply Lessor with such information regarding the use, location or condition of such Aircraft as-is reasonably available to Lessee, as Lessor may reasonably request.
(c) Operation of the Aircraft . Lessee agrees that no Aircraft will be used, operated or maintained in violation of any law or any rule, regulation, order or certificate of any government or governmental authority (domestic or foreign) having jurisdiction over Lessor, Owner Participant, Lessee or such Aircraft (including all orders, permits, authorizations and approvals described in this Section 6), and Lessee shall not violate any certificate, license or registration relating to such Aircraft issued by any such authority, except to the extent (i) Lessee is contesting in good faith by appropriate proceedings the validity or application of such law, order, rule or regulation, (ii) such violation does not result in any material risk of the sale or forfeiture of the Aircraft or any interest therein (except to the extent Lessee shall have provided security reasonably acceptable to Lessor to protect against such risk), and (iii) such contest would not subject any Indemnified Person to any criminal liability. In addition, Lessee will not operate or locate any Aircraft, or permit the operation or location of any Aircraft in any area excluded from coverage by any insurance maintained by Lessee pursuant to Section 9 hereof, except to the extent such operation or location is pursuant to a requisition by the United States Government, and Lessee shall have obtained an indemnity from the United States Government in lieu of such insurance. Lessee shall comply and shall cause all persons operating any Aircraft to comply with all insurance policy conditions and with all statutes, decrees, ordinances and regulations regarding acquiring, titling, owning, registering, leasing, insuring, using, operating, and disposing of such Aircraft and the licensing of operators thereof.
(d) Liens . Lessee shall not, without. the prior written consent of Lessor, permit, or suffer to exist any Liens other than Permitted Liens, nor shall Lessee assign any right or interest herein or in any Aircraft, Airframe or Engine except as expressly provided in this Agreement. Lessee will indemnify Lessor and Owner Participant on demand for all costs, charges and expenses (including reasonable legal fees) payable by Lessor or Owner Participant to have any Aircraft or any Part thereof released from any such Lien other than a Permitted Lien. Lessee shall promptly and at its own expense take such action as may be necessary to discharge or remove any such Lien other than a Lessor's Lien.
(e) Identification . On or prior to the Delivery Date with respect to an Aircraft, or as soon thereafter as practicable, Lessee will cause to be affixed to, and maintained in, the cockpit of the applicable Airframe and on each applicable Engine in a clearly visible location a plate of a reasonable size and shape bearing the following legend:
"Leased from Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee, Owner and Lessor."
Lessee shall not remove or permit the removal of such plate. If Lessee becomes aware that any such plate is damaged or illegible, Lessee shall promptly replace it with an exact duplicate in the same location as initially installed by Lessee in accordance with the requirements of this Section. Lessee shall not alter or remove or permit the alteration or removal of the registration certificate or of the nationality and registration marks required to be maintained on the Aircraft, and will restore such marks if. Lessee becomes aware that they have been damaged. During the Lease Term for any Aircraft, Lessee and any Permitted Sublessee may letter, paint or mark such Aircraft with the name and logo of Lessee or any Permitted Sublessee and may cause such Aircraft to bear insignia plates or other markings identifying the supplier or manufacturer of the Airframe or the Engines with respect thereto or any Parts of either thereof.
SECTION 7 . Subleasing the Aircraft . Notwithstanding anything to the contrary set forth in this Agreement, so long as no Event of Default or Incipient Event of Default with respect to an Aircraft shall have occurred and be continuing (provided that the existence of an Incipient Event of Default shall not affect any Permitted-Sublease in existence prior to the occurrence of such Incipient Event of Default), Lessee and any Permitted Sublessee shall have the' right, subject to the terms of this Agreement and the applicable ILR, without the prior .written consent of Lessor, to enter into a sublease of such Aircraft for use in the sublessee's ordinary course of business; provided further , however , that (x) no such sublease pursuant to (v) above shall have a term that exceeds the remaining Lease Term for such Aircraft and (y) such sublease shall contain provisions relating to insurance that are at least as favorable (from a lessor's perspective) as the provisions set forth in Section 9 of this Agreement. Immediately prior to entering into any such sublease (other than a sublease in existence on the date hereof), Lessee shall deliver to Lessor any required certificates or other documentation with respect to insurance of such Aircraft, including, without limitation, a certificate specifically naming the Owner Participant and AM-BT as additional insureds with respect to such insurance. The existence of any sublease shall in no way limit Lessee's obligations under this Lease with respect to such Aircraft. Lessee and Lessor hereby acknowledge that the Aircraft are and will continue to be subject to subleases pursuant to the terms of this Agreement.
SECTION 8 . Maintenance, Improvements and Repair of Aircraft .
(a) Maintenance . Lessee shall, at its own expense (or shall cause a Permitted Sublessee to), (i) maintain, inspect, service, repair and overhaul (or cause to be maintained, inspected, serviced, repaired and overhauled) each Aircraft, (A) while such Aircraft is registered in the United States, in compliance with the applicable regulations of the FAA and with a relevant Permitted Sublessee's FAA-approved maintenance program and, while such Aircraft is registered in another country referenced in the applicable ILR, in compliance with the applicable requirements of the aeronautical authority of such country of registry, (B) so as to keep such Aircraft in good operating condition, (C) as may be necessary to enable the airworthiness certification of such Aircraft to be maintained in good standing at all times under the Act or, while such Aircraft is registered under another country referenced in the applicable ILR, under the applicable requirements of the aeronautical authority of such country of registry except, in each case, when the Aircraft is being maintained, serviced, tested, inspected, repaired or modified as permitted or required by this Agreement or the applicable ILR or when all aircraft of the same make and model as such Aircraft have been grounded by the FAA, and (D) so as to keep such Aircraft maintained in a manner comparable to the manner in which Lessee maintains (or causes to be maintained) similar aircraft and engines owned and operated by Lessee or leased by Lessee as lessor (and any Permitted Sublease shall contain a provision to the effect that the Permitted Sublessee will be required to maintain the Aircraft without discrimination); and (ii) maintain or cause to be maintained all records, logs and other materials required in respect of such Aircraft by the applicable regulations of the FAA and by the Permitted Sublessee's FAA-approved maintenance program or such other FAA-approved maintenance program satisfying the requirements in clause (a)(1)(A) of this Section 8, or, if applicable, by applicable regulatory agencies and aeronautical authorities of jurisdictions in which the Aircraft is then' registered in accordance with the applicable ILR. Alternatively, Lessee shall provide maintenance and storage for each Aircraft subject to this Lease for any period such Aircraft is not on operational status in accordance with the manufacturer's approved maintenance manual procedures for such Aircraft and prudent industry practice. Neither Lessor nor Owner Participant shall be obliged in any way to maintain, alter, repair, rebuild or replace any Aircraft or any Part thereof, and Lessee expressly waives to the fullest extent permitted by law the right to require performance of any such action by Lessor or Owner Participant, or at the expense of either thereof, pursuant to any law at any time in effect or the right to cause Lessor or Owner Participant to make any repairs, restorations, replacements, renewals, additions or improvements with respect to such Aircraft. Subject to the provisions contained in Section 14 hereof relating to the return of an Aircraft, Lessee may in good faith and by appropriate legal proceedings contest the validity or application of any law, rule, regulation, order or airworthiness directive with respect to an Aircraft or the maintenance thereof so long as (i) Lessee is contesting in good faith by appropriate proceedings the validity or application of such law, rule, regulation, order or directive, (ii) such proceedings or other actions do not result in any material risk of the sale or forfeiture of the Aircraft or any interest therein (except to the extent Lessee shall have provided security reasonably acceptable to Lessor to protect against such risk), and (iii) such contest would not subject any Indemnified Person to any criminal liability.
(b) Replacements . In the ordinary course of maintenance, service, repair or testing, Lessee, or any Permitted Sublessee, at its own expense, shall replace any Parts that are worn out, lost, stolen, confiscated, damaged, destroyed or otherwise unfit for use from any Aircraft to the extent such Parts are necessary or useful, as promptly as practicable. In addition, Lessee or any Permitted Sublessee may remove in the ordinary course of maintenance, service, repair or testing any Parts, provided that Lessee or a Permitted Sublessee shall replace such Parts in accordance with the provisions of this Section 8 as soon as reasonably practicable and in accordance with Lessee's normal business practices. All replacement parts shall be free and clear of all Liens (except (i) in the case of replacement parts temporarily installed, (ii) pooling arrangements permitted by Section 7 of this Agreement, and (iii) Permitted Liens, in each case, subject to the provisions of Section 14 of this Agreement) and shall be in at least as good operating condition as, and shall have a value, utility and remaining useful. Life at least equal to, the Parts replaced (assuming such replaced-Parts were fn at least the condition and repair required to be maintained hereunder). Each of Lessee or any Permitted. Sublessee, at its own expense, may remove (without replacing) any Parts that Lessee or such Permitted Sublessee determines are no longer appropriate for use in any Aircraft and may make such alterations to such Aircraft as Lessee or such Permitted Sublessee deems desirable in the proper conduct of its business so long as such removal or alteration does not decrease the value, utility or remaining useful life of such Aircraft below the value, utility or remaining useful life thereof immediately prior to such removal or alteration. Each Part at any time removed from any Aircraft shall remain the property of (and .title thereto shall remain in) Lessor, no matter where located, until such time as such part shall be replaced by a replacement part that has been incorporated or installed in or attached to such Aircraft and that meets the requirements for replacement parts specified above. Immediately upon any replacement part becoming incorporated or installed in or attached to any Aircraft as above provided, without further act or instrument, subject to Permitted Liens (other than Lessor's Liens), (i) title to the removed Part shall thereupon vest in Lessee, free and clear of all rights of Lessor and shall no longer be deemed a part hereunder, (ii) title to such replacement part shall thereupon vest in Lessor, and (iii) such replacement part shall become subject to the applicable Lease and be deemed a Part of such Aircraft for all purposes hereof to the same extent as the Part originally incorporated or installed in or attached to such Aircraft.
(c) Required Alterations . Lessee, at its own cost and expense, shall make (or cause to be made) all modifications, additions, alterations and improvements to any Aircraft as may be required from time to time to meet in all material respects the requirements of applicable governmental rules and regulations (regardless of the Person upon whom such requirements, by their terms, are nominally imposed) and any recommendations of the manufacturer, unless, in the case of manufacturers recommendations, such failure would not affect the safety of such Aircraft or materially impair its value, utility or remaining useful life (assuming such Aircraft was in at least the condition required to be maintained hereunder). Any such required or recommended replacements, improvements or additions shall be made in the manner that would least impair the value, utility and remaining useful life of such Aircraft as originally delivered to lessee, and would not cause such Aircraft to constitute "limited use property" within the meaning of Rev. Proc. 76-30, 1976-2 C.B. 647.
(d) Title to Alterations . All improvements and additions to any Aircraft shall become and remain the property of Lessor. Notwithstanding the foregoing, Lessee or any Permitted Sublessee may remove or suffer to be removed any Part from any Aircraft that (i) is in addition to, and not in replacement of or substitution for, any Part originally incorporated on or installed in or attached to such Aircraft or any part in replacement of or in substitution for any such Part, (ii) is not required to be incorporated or installed in or attached or added to the Aircraft pursuant to the terms of this Section 8 and (iii) can be removed from such Aircraft without diminishing the value, utility or remaining useful life of such Aircraft (assuming such Aircraft was in at least the condition and repair (but no better than the condition or repair) required to be maintained hereunder) (any such Part, a "Severable Part") and upon such removal title thereto shall vest in Lessee. Any Severable Part which is not removed from an Aircraft at the time of its surrender to Lessor shall remain the property of Lessor.
(e) Permitted Alterations . Unless an Event of Default with respect to an Aircraft shall have occurred and be continuing, Lessee, at its own cost and expense, may from time to time make, subject to obtaining all necessary governmental approvals and consents of third parties, such improvements, modifications and alterations to any such Aircraft that are not required pursuant to Section 8(c) hereof as Lessee may deem desirable in the proper conduct of its business, so long as (i) such, improvement, modification or alteration shall not decrease the value, utility or remaining useful life of such Aircraft (assuming such Aircraft was in at least the condition and repair required to be maintained hereunder); (ii) such improvement, modification or alteration shall not cause such Aircraft to constitute "limited use property" within the meaning of Rev. Proc. 76-30, 1976-2 C.B. 647, and (iii) no improvements, modifications or alterations, taken together or separately, shall violate the provisions of Rev. Proc. 75-21, 1975-1 C.B. 715 or 79-48, 1979-1 C.B. 529.
(f) Reports . Lessee shall prepare and file all reports required to be filed by any governmental or regulatory authority with respect to the use, maintenance or condition of each Aircraft, or if it is not legally able to do so, shall promptly furnish or cause to be furnished to Lessor such information as may be required to enable Lessor to file any reports required to be filed by Lessor by virtue of its ownership of such Aircraft.
SECTION 9 . Insurance.
(a) Obligation to Insure . Lessee shall, at no cost and expense to Lessor, procure or cause to be procured and maintain or cause to be maintained with insurers of recognized responsibility in the worldwide commercial aviation industry (i) all risk ground and flight aircraft hull insurance insuring the respective interests of Lessor (in its individual capacity and as Trustee under the applicable Trust Agreement), Owner Participant and Lessee and covering physical loss or damage to each Aircraft in an amount equal to or greater than the Stipulated Loss Value for such Aircraft, (ii) comprehensive airline liability insurance covering, but not limited to, comprehensive general liability, third party legal liability, passenger legal liability, personal injury liability, passengers' checked and unchecked baggage and personal effects liability with a combined single limit of not less than the lesser of the amount required by the applicable sublease for such Aircraft on the date of the ILR subjecting such Aircraft to this Lease and $500,000,000, and (iii) such other insurance against risks customarily insured against by owners or lessees of aircraft similar to each Aircraft and in amounts consistent with prudent industry practice. All such insurance shall be of the type usually carried in accordance with prudent industry practice for Persons of similar size of Lessee owning, operating or using aircraft similar to such Aircraft which covers the kinds of risks customarily insured, and shall be maintained in effect with reputable companies with substantial financial capacity, as are reasonably satisfactory to Lessor. Policies covering hull insurance shall be subject to a reasonable deductible or self-insured retained amount consistent with prudent industry practices and in an amount not greater than the deductible or self-insured amount, as the case may be, for similar aircraft owned or leased by Lessee. Each of Lessor (in its individual capacity and as Trustee under the applicable Trust Agreement), Owner Participant and AM-BT shall be a named insured as their respective interests may appear with respect to aircraft public liability or other third-party liability insurance, and a named loss payee as its interests may appear in respect of hull or casualty insurance in all insurance policies required under this Section 9. Each such policy shall be primary without right of contribution from any other insurance carried by Lessor, Owner Participant or AM-BT and shall waive any right of setoff, counterclaim or other deduction in respect of any liability of Lessor, Owner Participant or AM-BT to the extent any moneys are due to Lessor, Owner Participant or AM-BT (other than with respect to unpaid premiums). In addition, each such policy shall provide for at least 30 days' written notice (or, if such notice period is not permitted under the applicable policy, the longest prior notice that would be so permitted) to Lessor, Owner Participant and AM-BT of any cancellation or material alteration. of such policy. No such policies shall provide that there shall be any recourse against Lessor, Owner Participant or AM-BT for payment of premiums or other amounts due with respect to such policies, nor shall my such policies provide that the rights of Lessor, Owner Participant or AM-BT under such policies can be affected by any action, inaction or breach of Lessee or any sublessee. At Lessor's, Owner Participant's or AM-BT's request, Lessee shall furnish Lessor, Owner Participant or AM-BT, as the case may be, with certificates or other evidence satisfactory to Lessor, Owner Participant or AM-BT of compliance by Lessee with the provisions hereof, but neither Lessor nor Owner Participant nor AM-BT shall be under any duty to examine such certificates or to advise Lessee in the event its insurance is not in compliance herewith. Lessee covenants that it will not use or permit the use of any Aircraft at any time when the insurance required by this Section 9 is not in force with respect to such Aircraft. Lessee's obligation to maintain insurance in accordance with the provisions of this Section 9 with respect to any Aircraft shall commence on the Delivery Date, and shall continue until such Aircraft is sold pursuant to the terms of this Agreement or such Aircraft is no longer subject to the applicable Lease, whichever is sooner. Lessee may self-insure, or satisfy through contingent insurance, all or any portion of the foregoing coverage in a manner consistent with Lessee's self-insurance practices or contingent insurance practices, as the case may be, in effect on the date hereof and prudent industry standards with respect to each Aircraft to be insured and as Lessor may otherwise approve in writing. On or before the Delivery Date with respect to any Aircraft, Lessee shall furnish to Lessor a certificate of an authorized representative of the insurers containing a reasonable description of the insurance then carried and maintained for such Aircraft and certifying to the fact that such insurance meets the requirements of this Section 9, to the extent applicable.
(b) Additional Insurance . Nothing contained in this Section 9 shall prohibit Lessee from maintaining, at its own expense, insurance for its own account with respect to loss or damage to, or liability arising from all or any portion of the Aircraft, so long as such insurance does not materially interfere with any insurance required to be carried by Lessee under this Section 9.
SECTION 10 . General Indemnity .
(a) Lessee agrees to indemnify, on an after - Tax basis, Lessor (both in its individual capacity and as Trustee under the Trust Agreements), Owner Participant and each of its members, AMP Investments, L.L.C. and each of its members, and their respective Affiliates, successors and permitted assigns, and each of their respective officers, directors, employees, and agents (each, an "Indemnified Person") and hold each of them harmless from and against any and all liabilities (including without limitation liability in tort), losses, obligations, claims (including injury to third Persons or property of third Persons) damages, penalties, causes of action, suits, costs and expenses (including attorneys' fees and expenses) or judgments of any nature that may be incurred by any such Indemnified Person (but, with respect to any particular Indemnified Person, excluding any such Claims (x) to the extent incurred by reason of or arising as a result of the gross negligence or willful misconduct of such Indemnified Person, and (y) that are in the nature of Taxes) arising out of, resulting from or relating to any matter arising out of or relating to any Aircraft, any Engine or any Part, this Agreement (and any Individual Leasing Records incorporating this Agreement), or any subleases, including, but not limited to:
	(i) the ordering, delivery, nondelivery, acquisition, rejection, installation, possession, titling, registration, reregistration, custody by Lessee of title and registration documents, manufacture (including any claim based upon any infringement or alleged infringement of patent or any other right), use, nonuse, misuse, transportation, storage, maintenance, modification, alteration, repair, control or disposition (unless such disposition is made voluntarily by Lessor, and no Event of Default with respect to the Aircraft being disposed of has occurred and is continuing at the time of such disposition) of all or any Part of any Aircraft, any Engine or any portion thereof; or
	(ii) any violation or alleged violation by Lessee of (a) any provision of or transaction contemplated by this Agreement, the applicable Lease or of any contract or agreement to which Lessee is a party or by which it is bound (including the breach or inaccuracy of any of the representations or warranties of Lessee set forth in this Agreement or any ILR), or (b) any applicable law or governmental rule or regulation applicable at any time to any Aircraft or any action or transaction by Lessee with respect thereto or pursuant to this Agreement; or
	(iii) all additional reasonable out-of-pocket costs or expenses incurred by any Indemnified Person solely as a result of having to qualify to do business in any jurisdiction solely due to the use, presence or location of any Aircraft in such jurisdiction.
(b) Control of Litigation . (i) Promptly after receipt by any Indemnified Person of notice of the commencement of any action, suit or proceeding or the written assertion of any claim or demand in respect of which indemnity may be sought hereunder (an "Indemnified Matter"), the Indemnified Person shall notify Lessee in writing (the "Claim Notice") of such notice. Lessee shall at its own expense assume the defense of such Indemnified Matter within 30 days after receipt of the Claim Notice; provided that the Indemnified Person shall upon reasonable notice by Lessee consult from time to time. in respect of such Indemnified Matter and provide Lessee with any documents or other items or access to any witness which Lessee deems in its reasonable judgment to be necessary in connection with any Indemnified Matter and any reasonable out-of-pocket costs therefor shall be paid or reimbursed by Lessee. The Indemnified Person may participate in the defense of any Indemnified Matter and employ separate counsel, at its own expense; provided that if the defendants or potential defendants or obligors in connection with any Indemnified Matter shall include both Lessee and an Indemnified Person, and such Indemnified Person shall have reasonably concluded that counsel selected by Lessee has a conflict of interest because of the availability of different or additional defenses to such Indemnified Person, such Indemnified Person shall have the right to select separate counsel to participate in the defense or handling of such Indemnified Matter on its behalf, at the expense of Lessee. So long as no Event of Default with respect to an Aircraft shall have occurred and be continuing, Lessee may, in its sole discretion, defend, settle or compromise any such suit, action or claim with respect to such Aircraft; provided that (x) Lessee shall be solely liable in respect of losses arising-therefrom (whether by payment of any judgment, settlement, amount or indemnity hereunder), and (y) Lessee shall not settle any such suit, action or claim to the extent it involves remedies other than monetary damages without the prior written consent of the relevant Indemnified Person, which consent shall not be unreasonably withheld. If Lessee chooses to defend or prosecute any claim, the Indemnified Person hereto shall cooperate in the defense or prosecution thereof.
(ii) Lessee shall not be liable under Section 10(a) hereof with respect to any amount resulting from a claim or demand of which such Indemnified Person had actual knowledge and following which Lessee was not notified on a timely basis and offered the opportunity to assume the defense of such claim or demand as provided under Section 10(b)(i) hereof, but only to the extent Lessee is prejudiced as a result of not having-had timely notice or the opportunity to assume the defense of such claim-or demand; provided, however, that Lessee shall be deemed to have received notice and been offered the opportunity to defend under Section 10(b)(i) hereof if notice of such claim or demand shall have been received by an Affiliate of Lessee.
(iii) Lessee and Indemnified Person shall fully cooperate with each other in regard to any such Indemnified Matter, including without limitation, delivering copies of all pleadings, documents, reports and correspondence to the other party, and acting reasonably in all matters in which joint decisions are required.
(c) Lessee shall forthwith upon demand reimburse each Indemnified Person for any sum or sums expended with respect to any of the foregoing or shall pay such amounts directly upon request from such Indemnified Person. Lessee-shall be subrogated to such Indemnified Person's right in the affected transaction. The foregoing indemnity in this Section 10 shall survive the expiration or earlier termination of this Agreement and shall' continue in effect for all of the foregoing matters except for losses, damages or claims arising after the Expiration Date (or earlier termination) which relate to events occurring after such date. Nothing herein contained shall be construed as a guaranty by Lessee of any useful-life or residual value in the Aircraft.
(d) Payment . Any amount payable to an Indemnified Person pursuant to this Section 10 shall be paid within 10 Business Days after receipt by Lessee or a written demand thereof or from such Indemnified Person accompanied by a written statement describing in reasonable detail the amount so payable.
SECTION 11. Tax Indemnity .
(a) Indemnified Taxes . Lessee agrees to pay when due and assume liability for and indemnify and hold harmless each Indemnified Person from and against any and all claims of any kind whatsoever asserted against any person that are in the nature of taxes (including income, gross receipts, sales, rental, use, turnover, value-added, property (tangible and intangible), excise and stamp taxes) or other governmental fees (including license and registration fees), assessments, levies, imposts, duties, charges, surcharges, assessments or withholdings of any nature whatsoever, together with all interest, penalties and additions to taxes imposed by any federal, state or local taxing authority in the United States or by any foreign government or any political subdivision or taxing authority thereof or by any territory or possession of the United States or by any international authority (any of the foregoing being referred to herein as "Taxes") on or arising out of, resulting from or relating to, in connection with or measured by (i) this Agreement and any other documents contemplated by this Agreement or any future amendment, supplement, waiver or consent with respect thereto, that, in each case, has been requested by or consented to by Lessee, or the execution, delivery or performance of any thereof or the issuance, acquisition or subsequent transfer thereof; (ii) each Aircraft, Airframe, Engine, Part or any Parts of any thereof; (iii) the manufacture, financing, refinancing, construction, purchase, acceptance, possession, rejection, ownership, delivery, nondelivery, use, leasing, subleasing, condition, maintenance, repair, sale, control, return, transfer, assembly, substitution, improvement, location, installation, acquisition, transport, registration., reregistration, repossession, operation, replacement, insuring, storage, modification, rebuilding, importation, exportation, mortgaging, abandonment, redelivery or other disposition of or the imposition of any Lien (or the incurrence of any liability to refund or pay over any amount as the result of any Lien) (other than in each case, Lessor's Liens) on any Aircraft, Airframe, Engine, Part or any parts of any thereof; (iv) the rentals, receipts or earnings arising from each Aircraft, Airframe, Engine, Part or any parts of any thereof; (v) any amount paid or payable pursuant to any document contemplated by this Agreement or the property or the income or other proceeds with respect to the property held in the Trust Estate; or (vi) otherwise relating to the transactions contemplated by or consummated pursuant to this Agreement and the documents contemplated by this Agreement (including the filing or recording thereof); excluding, however,
	(i) Taxes imposed by the United States Federal government pursuant to Subtitle A of the Code (including any minimum Taxes, withholding Taxes and any Taxes on or measured by any items of tax preference);
	(ii) Taxes (including any minimum Taxes, withholding Taxes and any Taxes on or measured by any items of tax preference) that are based upon or measured by gross or net income, gross or net receipts or gross or net revenues, franchise Taxes, Taxes on doing business (including those based on gross receipts), Taxes on capital or net worth, Taxes on capital gains, Taxes on excess profits, Taxes on accumulated earnings, personal holding company Taxes and succession and estate Taxes (other than, in each case, Taxes that are (A) sales or use Taxes, (B) rental, (C) ad valorem or property Taxes or license fees, or (D) Taxes imposed solely as a result of the use, operation or location by Lessee, any sublessee, any other users of the Aircraft (other than any Indemnified Person or any Affiliate thereof), as any Affiliate of any of the foregoing of the Aircraft in the jurisdiction imposing such Tax or the status or activities of Lessee or any sublessee in such jurisdiction, or any combination of the foregoing);
	(iii) Taxes imposed on or with respect to an Indemnified Person resulting from (A) any voluntary transfer by such Indemnified Person of any interest in an Aircraft or any Part thereof or any interest arising under this Agreement (other than (I) a transfer of an Aircraft while an Event of Default shall have occurred and be continuing with respect to such Aircraft, (II) a transfer to Lessee pursuant to Section 13 of this Agreement (except to the extent such Taxes are included in amounts paid by Lessee pursuant to Section 13), and (III) any modification, alteration, replacement or substitution made by Lessee pursuant to Section 8 of this Agreement that is treated as a transfer for Tax purposes), (B) any transfer of any interest in such Indemnified Person, or (C) any involuntary transfer of any of the foregoing interests in connection with any bankruptcy or other proceeding for the relief of debtors in which such Indemnified Person is the debtor, or any foreclosure by a creditor of such Indemnified Person, other than, in each case, a bankruptcy (or other such proceeding) of, or a foreclosure on, the relevant Aircraft caused by an Event of Default with respect to such Aircraft;
	(iv) Taxes attributable to an Aircraft that are imposed with respect to any period after the earlier of (A) the Expiration Date for such Aircraft (including, if required under the terms of this Agreement, the return of the Aircraft to Lessor in accordance with the terms of this Agreement), or (B) the discharge in full of Lessee's obligations to pay Stipulated Loss Value with respect to such Aircraft or any amount determined by reference thereto, and all other amounts due hereunder and under the applicable ILR with respect to such Aircraft; provided, however, that the exclusion set forth in this clause (iv) shall not apply (x) to Taxes relating to events occurring or matters arising on or prior to the earlier of such times, and (y) in the case of an Aircraft, while an Event of Default or an Incipient Event of Default shall have occurred and be continuing with respect to such Aircraft;
	(v) Taxes that would not have been imposed if the Indemnified Person or any Affiliate thereof had not engaged in activities in the jurisdiction imposing the Tax, which such activities are unrelated to the transactions contemplated by this Agreement;
	(vi) Taxes imposed on fees received by Lessor in its capacity as Trustee under the Trust Agreements;
	(vii) value added Taxes, except. to the extent such Taxes are adopted in lieu of Taxes that would otherwise be indemnifiable hereunder; and
	(viii) Taxes imposed as a result of the gross negligence or willful misconduct of any Indemnified Person or any Affiliate thereof, or that result from a breach by any Indemnified Person of its obligations hereunder.
Lessee's indemnity obligation to an Indemnified Person under this Section 11(a) shall include any amount necessary to hold such Indemnified Person harmless, after taking into account any Tax benefits actually realized by such Indemnified Person, from the net amount of all Taxes actually required to be paid by such Indemnified Person by reason of the receipt or accrual of such indemnity; provided, however, that such Indemnified Person shall .provide such certifications, information and documentation as shall be reasonably requested by Lessee to minimize any payment pursuant to this paragraph.
(b) Tax Savings, Etc . If an Indemnified Person shall actually realize any Tax saving or credit by reason of the imposition of any Tax for which Lessee has indemnified such Indemnified Person under this Section 11, or by reason of any payment or indemnity paid by Lessee under this Section 11, then so long as no Payment Event of Default shall have occurred and be continuing, such Indemnified Person shall pay to Lessee, within ten days after such Indemnified Person shall have actually realized such Tax saving or credit, the amount of such saving or credit, together with the amount of any Tax saving actually resulting from any payment pursuant to this sentence; provided that such Indemnified Person shall not be obligated to make any payment pursuant to this Section 11(b) to the extent such amount would exceed the amount of all prior payments made by Lessee pursuant to Section 11(a) reduced by all prior payments made by such Indemnified Person to Lessee pursuant to this Section 11(b); provided further that any excess shall be carried froward to reduce future obligations of Lessee under this Section 11. Any subsequent loss or disallowance of a Tax saving or credit paid to Lessee pursuant to the preceding sentence shall be indemnifiable under this Section 11.
(c) Tax Filing, Etc.
	(i) Lessee agrees, to the extent it is legally able to do so, to timely file (or cause a Permitted Sublessee to timely file) appropriate returns, reports and statements (in a manner as will show the ownership of the Aircraft in Lessor) and to pay when due any Taxes, in each case, subject to indemnification under Section 11(a); provided, that if neither Lessee nor the Permitted Sublessee is legally able to file any such return, report or statement, Lessee shall prepare (or cause a Permitted Sublessee to prepare) and furnish such return, statement or report for filing by such Indemnified Person in such manner as shall be reasonably satisfactory to such Indemnified Person for filing not later than five Business Days prior to the due date; provided further that Lessee shall have no obligation to prepare and furnish such return, statement or report for filing by such Indemnified Person to the extent such Indemnified Person after receipt of Lessee's written request shall have failed to furnish Lessee with such information as is in such Indemnified Person's control and is necessary to prepare such return, statement or report. Lessee shall hold each Indemnified Person harmless from and against any and all liabilities, including, without limitation penalties, additions to tax, fines and interest arising out of any insufficiency or inaccuracy in any such return (other than any insufficiency or inaccuracy attributable to an act or omission of such Indemnified Person). Each Indemnified Person agrees to cooperate with and to furnish to Lessee any and all information that may be required by the respective governmental entity imposing the filing requirement or Tax required to be filed or paid, as the case may be, by Lessee.
	(ii) If any of the Taxes for which Lessee is responsible under this Section 11 are imposed by law upon an Indemnified Person and such Indemnified Person elects to have Lessee file on its behalf any returns relating to such Taxes, such Indemnified Person agrees to grant to Lessee an appropriate power of attorney or other authorization if and to the extent necessary in order to enable Lessee to file on such Indemnified Person's behalf any and all appropriate returns and pay such Taxes referred to in this Section 11.
	(iii) Lessee shall submit to Lessor or such other appropriate Indemnified Person upon written request by such Indemnified Person (A) a true and correct copy of all tax returns and receipts evidencing payment of all Taxes required to be filed or paid by Lessee pursuant to this Section 11, and (B) such other information as may be required by such Indemnified Person to complete its own tax returns or otherwise properly account for the Aircraft or the payments made under this Agreement or any applicable ILR.
(d) Contests .
	(i) If any claim is made against an Indemnified Person with respect to Taxes for which Lessee could have an indemnity obligation hereunder, such Indemnified Person shall promptly notify Lessee in writing of such claim, and shall contest in good faith (including consultations in-good faith with Lessee and Lessee's counsel) with the appropriate public authority and by appropriate legal proceedings in the name of the relevant Indemnified Person, and shall not settle without the prior written consent of Lessee, the amount or validity of any Taxes payable by Lessee under the terms of this Agreement, provided that (A) Lessee shall have requested that such Indemnified Person pursue such contest, (B) if such contest requires the payment of the claim, Lessee shall have paid the amount required directly to the appropriate taxing authority or made an advance of the amount thereof to such Indemnified Person on an interest-free basis and net of any additional tax cost (after taking into account any tax benefits) to such Indemnified Person resulting from such advance, (C) if Lessee requests that an Indemnified Person pursue a contest that necessarily involves net income taxes, Lessee shall have provided an opinion of independent tax counsel, selected by Lessee and reasonably acceptable to Lessor, to the effect that there is a. reasonable basis for pursuing such contest, (D) such contest would not result in a material risk of forfeiture of the relevant Aircraft, and (E) no Event of Default with respect to the applicable Aircraft shall have occurred and be continuing, unless, in the case of (D) and (E), Lessee shall have provided security that, in the reasonable discretion of all Indemnified Persons, is sufficient to protect the Aircraft and Lessee's obligations hereunder without recourse to any other assets; and provided further, that Lessee shall pay for all costs, expenses and liabilities incurred in connection with any such contest to the extent such costs, expenses and liabilities relate to a Tax that Lessee shall have requested be contested in accordance with this Section 11(d). The Indemnified Person conducting such contest shall keep Lessee and its counsel informed of the progress and status of such contest. Alternatively, if (1) such contest involves (or could legally involve) only Taxes (other than net income Taxes) for which Lessee could have an indemnity obligation hereunder and (2) for which Lessee would be legally permitted to conduct such contest in its own name under the law of the applicable taxing jurisdiction, Lessee shall be permitted to contest the claim, subject to the conditions set forth in clauses (A), (B), (C), (D) and (E) above, and to control the contest of such claim, including the choice of forum, provided that (y) Lessee shall notify and advise such Indemnified Person of the progress and status of such contest and shall consider in good faith the recommendations of such Indemnified Person with respect to any such contest undertaken in such Indemnified Person's name, and (z) such Indemnified Person agrees to provide Lessee with the authorizations needed by Lessee to pursue such contest, and shall provide Lessee with all information in the possession of such Indemnified Person that is reasonably requested by Lessee for the pursuit of such contest. Notwithstanding the foregoing, Lessee shall be permitted to contest a Tax in the name of an Indemnified Party if (i) all the other conditions except clause (2) of the preceding sentence are met, (ii) the contest in question involves an Aircraft subject to a Permitted Sublease entered into after the date hereof under the terms of which Lessee has allowed the sublessee, as indemnitor under such sublease, to contest the indemnified Tax in Lessee's name and (iii) Lessee, as a general matter in leasing transactions it has entered into after the date hereof in which Lessee is the lessor, has granted similar rights to lessees in such transactions. Notwithstanding the foregoing provisions of this paragraph (i), an Indemnified Person may forego its obligation to contest a claim for Taxes if it notifies Lessee in writing that it waives its rights under this Section 11 with respect to such claim and any claim based on the outcome of such claim. A Permitted Sublessee shall be permitted to exercise Lessee's rights and obligations under this Section 11(d) with respect to a contest; provided that Lessee shall have notified Lessor in writing of its intention to have a Permitted Sublessee exercise such rights and obligations prior to the time that any action is taken by such Permitted Sublessee with respect to such contest; and provided, further, that Lessee shall at all times remain liable for its obligations under this Section 11.
	(ii) Lessee shall be entitled to any refunds of Taxes, plus interest thereon, which are actually received by any Indemnified Person or Lessee which are with respect to Taxes previously paid by (or as to which an indemnity payment has been made by) Lessee under the terms of this Agreement; provided that (A) no Payment Event of Default shall have occurred and be continuing, and (B) the subsequent loss of any such refund for which an Indemnified Person has made a payment to Lessee shall be treated as an indemnified Tax under this Section 11.
(e) Payment . Any amount payable to an Indemnified Person pursuant to this Section 11 shall be paid within 20 Business Days after receipt by Lessee of written demand therefor from such Indemnified Person accompanied by a written statement describing in reasonable detail the amount so payable, but not before the date that is one Business Day prior to the date such Tax is due; provided that if Lessee is properly pursuing a contest of a Tax as provided in Section 11(d), then, except as expressly provided in Section 11(d), Lessee shall not be required to pay any Tax until the conclusion of such contest. If requested to do so in the preceding sentence and if legally permissible, Lessee shall make any such payments directly to the appropriate taxing authority.
(f) Survival of Indemnities . The indemnities and obligations set forth in this Section 11 shall be in addition to any other obligations or liabilities of Lessee hereunder or at common law or otherwise and, without prejudice to the survival of any other obligation of Lessee under this Agreement, shall survive the termination of this Agreement.
(g) Definition of Indemnified Person . For purposes of' this Section 11, the term "Indemnified Person" shall include (i) for U.S. federal income tax purposes, any member of an "affiliated group" within the meaning of Section 1504(a) of the Code of which an Indemnified Person (as defined in Section 10 of this Agreement) is a member and (ii) any member of a group of which an Indemnified Person (as defined in Section 10 of this Agreement) is a member that files a combined or consolidated Tax return for purposes of any other Tax.
SECTION 12 . Representations and Warranties .
(a) Lessee Representations and Warranties . Lessee hereby represents and warrants to Lessor and Owner Participant as follows:
	(i) Corporate Existence and Power . Lessee is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is duly qualified to transact business as a foreign corporation in and is in good standing under the laws of each state in which the ownership of its properties or the conduct of its business makes such qualification necessary, except where the failure to be so qualified would not have a Material Adverse Effect on Lessee, and has the requisite corporate power and authority to own, lease, and operate its properties and to carry on its business as now being conducted and as proposed' to be conducted.
	(ii) Corporate Authorization . Lessee has the corporate power and authority to execute and deliver this Agreement and each ILR and to consummate the transactions contemplated hereby. The execution and delivery by Lessee of this Agreement and each ILR, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized, executed and delivered by Lessee; no other corporate action on the part of Lessee, whether pursuant to its certificate or articles of incorporation or by-laws or otherwise, is necessary to authorize it to enter into this Agreement or any ILR or to consummate the transactions contemplated hereby or thereby.
	(iii) No Violations, Etc . Neither the execution, delivery nor performance of this Agreement or any ILR, nor the consummation by Lessee of the transactions contemplated hereby and thereby, nor compliance by Lessee with the provisions hereof or thereof (A) requires any filing with, or consent, authorization, approval of, or waiver or exemption by, any governmental authority on the part of Lessee, except to the extent already obtained or performed by Lessee in accordance with the terms of this Agreement; (B) violates or will violate any order, writ, injunction, judgment, decree or award of any court or governmental authority applicable to Lessee or any applicable law; (C) violates or will violate, or conflicts or will conflict with, or results or will result in a breach or contravention of any of the provisions of its certificate or articles of incorporation or by-laws; or (D) breaches or constitutes a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or conflicts with any term, covenant, condition or provision of, or results in any modification or termination of, or results in the creation of a Lien (other than a Permitted Lien) upon any Aircraft or any Part thereof pursuant to any contract (including any sublease to which an Aircraft is subject), indenture, mortgage, instrument or other agreement to which Lessee is a party or by which any properties of Lessee may be bound or affected or from which Lessee derives benefit.
	(iv) Governmental Actions . No authorization or approval or other action by, and no notice to or filing or registration with, any governmental authority is or will be required in connection with the execution, delivery or performance by Lessee, or the consummation by it of the transactions contemplated by, this Agreement or any ILR, except to the extent already obtained or performed by Lessee in accordance with the terms of this Agreement.
	(v) Binding Effect . This Agreement is, and each ILR upon execution and delivery thereof will be, the legal, valid and binding obligation of Lessee enforceable against Lessee in accordance with its terms, subject, however, to the application by a court of general principles of equity and to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally.
	(vi) Financial Information . The consolidated balance sheet of Lessee and its subsidiaries as of ____________ and the related consolidated statements of income and retained earnings for the fiscal year then ended, certified by ____________, independent public accountants, copies of which have been furnished to Lessor, fairly present, in conformity with generally accepted accounting principles, the consolidated financial position of Lessee and its subsidiaries as of such date and their consolidated results of operations for such fiscal year.
	(vii) No Litigation . There is no action, suit or proceeding pending or, to the knowledge of Lessee, threatened against Lessee before or by any federal, state, municipal, foreign or other governmental authority, agency, instrumentality, arbitrator or court that, if determined adversely to Lessee, would materially adversely affect the ability of Lessee to perform its obligations under this Agreement or any ILR, or the value of any Aircraft.
	(viii) Defaults . No Event of Default (or event that with the passage of time or the giving of notice or both would constitute an Event of Default) has occurred and is continuing.
(b) Lessor's Representations and Warranties . Lessor, both in its individual capacity and as Trustee under the Trust Agreements with respect to clauses (i) through (iv) below, and not in its individual capacity but solely as Trustee under the Trust Agreements with respect to clause (v) below, hereby represents and warrants to Lessee and Owner Participant as follows:
	(i) Existence and Power . Lessor is a banking corporation duly organized and existing under the laws of the State of Delaware, and has the requisite corporate power and authority to own, lease, and operate its properties and to carry on its business as now being conducted and as proposed' to be conducted.
	(ii) Authorizations . Lessor has the corporate power and authority to execute and deliver this Agreement and each ILR and to consummate the transactions contemplated hereby. The execution and delivery by Lessor of this Agreement and each ILR, and the consummation of the transactions contemplated hereby or thereby, have been duly authorized, executed and delivered by all necessary corporate action; no other action on the part of Lessor, whether pursuant to its certificate or articles of incorporation or by-laws or otherwise, is necessary to authorize it to enter into this Agreement or any ILR or to consummate the transactions contemplated hereby or thereby.
	(iii) No Violations, Etc . Neither the execution, delivery nor performance of this Agreement or any ILR, nor the consummation by Lessor of the transactions contemplated hereby or thereby, nor compliance by Lessor with the provisions hereof or thereof (A) requires any filing with, or consent, authorization, approval of, or waiver or exemption by, any governmental authority of the state of Delaware or the United States of America governing the banking or trust powers of Lessor, on the part of Lessor; (B) violates or will violate any order, writ, injunction, judgment, decree or award of any court or governmental authority applicable to Lessor or any applicable law of the State of Delaware or the United States of America governing the banking or trust powers of Lessor, or (C) violates or will violate, or conflicts or will conflict with, or results or will result in a breach or contravention of any of the provisions of its certificate or articles of incorporation or by-laws; or (D) breaches or constitutes a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or conflicts with any term, covenants, condition or provision of, or results in any modification or termination of, any agreement or contract to which Lessor in its individual capacity is a party, or results in the creation of any Lessor's Liens attributable to Lessor in its individual capacity, except', in each case, for (x) violations, breaches, defaults, termination, modifications and encumbrances, and (y) filings, which, if not made, and (z) consents, authorizations, approvals, waivers and exemptions which, if not obtained, would not individually or in the aggregate, have a Material Adverse Effect on Lessor.
	(iv) Governmental Actions . No authorization or approval or other action by, and no notice to or filing or registration with, any governmental authority of the State of Delaware or the United States of America governing Lessor's banking or trust powers is or will be required in connection with the execution, delivery or performance by Lessor, or the consummation by it of the transactions contemplated by this Agreement (or any corresponding ILR), except for such approvals and authorizations that would not have a Material Adverse Effect on Lessor if not obtained.
	(v) Binding Effect . This Agreement is, and each ILR upon execution and delivery thereof will be, the legal, valid and binding obligation of Lessor enforceable against Lessor in accordance with its terms, subject, however, to the application by a court of general principles of equity and to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally.
(c) Owner Participant's Representations and Warranties . Owner Participant hereby represents and warrants to Lessee and Lessor as follows:
	(i) Existence and Power . Owner Participant is a limited liability company duly organized and existing under the laws of the State of Delaware and is duly qualified to transact business in and is duly qualified or registered as a limited liability company under the laws of each state in which the ownership of its properties or the conduct of its business makes such qualification or registration necessary, except where the failure to be so qualified or registered would not have a Material Adverse Effect on Owner Participant, and has the requisite partnership power and authority to own, lease, and operate its properties and to carry on its business as now being conducted and as proposed to be conducted.
	(ii) Authorizations . Owner Participant has the power and authority to execute and deliver this Agreement and each ILR and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Owner Participant of this Agreement and each ILR, and the consummation of the transactions contemplated hereby, have been duly authorized, executed and delivered by all necessary action on the part of the members of the Owner Participant; no other action on the part of Owner Participant is necessary to authorize it to enter into this Agreement or any ILR or to consummate the transactions contemplated hereby or thereby.
	(iii) No Violations, Etc . Neither the execution, delivery nor performance of this Agreement or any ILR, nor the consummation by Owner Participant of the transactions contemplated hereby and thereby, nor compliance by Owner Participant with the provisions hereof or thereof (A) requires any filing with, or consent, authorization, approval of, or waiver or exemption by, any governmental authority on the part of Owner Participant; (B) violates or will violate any order, writ, injunction, judgment, decree or award of any court or governmental authority applicable to Owner Participant or any applicable law, or (C) violates or will violate, or conflicts or will. conflict with, or results or will result in a breach or contravention of any of the provisions of the Operating Agreement or its certificate of formation; or (D) breaches or constitutes a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or conflicts with any term, covenants, condition or provision of, or results in any modification or termination of any agreement or contract to which Owner Participant is a party, or results in the creation of any Lessor's Liens attributable to it, except, in each case, for (x) violations, breaches, defaults, termination, modifications and encumbrances, and (y) filings, which, if not made, and (z) consents, authorizations, approvals, waivers and exemptions which, if not obtained, would not individually or in the aggregate, have a Material Adverse Effect on Owner Participant.
	(iv) Governmental Actions . No authorization or approval or other action by, and no notice to or filing or registration with, any governmental authority is or will be required in connection with the execution, delivery or performance by Owner Participant, or the consummation by it of the transactions contemplated by this Agreement (or any corresponding ILR), except for such approvals and authorizations that would not have a Material Adverse Effect on Owner. Participant if not obtained.
	(v) Binding Effect . This Agreement is, and each ILR upon execution and delivery thereof will be, the legal, valid and binding obligation of Owner Participant enforceable against Owner Participant in accordance with its terms, subject, however, to the application by a court of general principles of equity and to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally.
(d) Conflicts With the Operative Documents . Notwithstanding anything contained in this Section 12 to the contrary, neither Lessor (in its individual capacity and as Trustee under the Trust Agreements) nor Owner Participant makes any representation or warranty as to whether the execution, delivery and performance of this Agreement or any ILR requires any consent or approval of any party to, or violates or will violate or conflicts or will conflict with, or results or will result in a breach or contravention of any provisions of, any Operative Document (as defined in the Trust Agreement).
SECTION 13 . Loss or Destruction of Aircraft .
(a) Notification; Election . If any Aircraft shall suffer an Event of Loss, such fact, together with a description of the circumstances giving rise thereto, shall promptly (and in any event within 15 days after Lessee has actual knowledge of such Event of Loss) be reported in writing by Lessee to Lessor. Lessee shall notify Lessor, in writing, within the period of time specified in the following sentence, of its election to, and shall, either (i) restore and replace (a "Restoration") the affected Aircraft, Airframe or Engine as provided in the penultimate sentence of this paragraph (a), in which event such notice shall include a description of the actions Lessee plans to take in connection therewith, or (ii) pay or cause to be paid to Lessor as compensation for such Event of Loss, not later than the 5th Business. Day following the date of receipt of full, complete and uncontested payment of all insurance proceeds in respect of the occurrence of such Event of Loss under the insurance policies maintained in accordance with Section 9 or all payments of stipulated loss value paid under any Permitted Sublease with respect to such Event of Loss, in Dollars, in immediately available funds, the Stipulated Loss Value for such Aircraft determined as of the date of such Event of Loss. The notice referred to in the preceding sentence shall be given (i) promptly, and in any event not later than the 5th Business Day, following Lessee's receipt of instructions from the sublessee of such Aircraft of the sublessee's election with respect to the options described in the preceding sentence or (ii) if such Aircraft is not then subject to a sublease or if the sublessee is not entitled to make such an election, within 30 days after the Lessee's notification of Lessor of an Event of Loss. If Lessee shall have failed to deliver the notice in the time period provided above, Lessee shall be deemed to have selected the option in clause (ii) of the preceding sentence. From the date of such Event of Loss to and including the date, if any, of payment of such Stipulated Loss Value, all Rent and Interim Rent under the Lease of such Aircraft shall continue to be paid when due. Upon payment in full of Stipulated Loss Value, together with all Rent, Interim Rent and all other amounts due and owing under such Lease through and including the date Of such payment, the obligation of Lessee to pay Rent and Interim Rent under such Lease shall cease to accrue with respect to the Aircraft for which Stipulated Loss Value has been paid, and the Lease Term with respect to the Lease of such Aircraft shall end and Lessor shall transfer all right, title and interest in and to such Aircraft to Lessee without recourse or warranty except as to the absence of Lessor's Liens. Notwithstanding the foregoing, Lessee may elect a Restoration with respect to an Aircraft (or with respect to the Airframe or Engines that are part of such Aircraft) only (x) in accordance with and as permitted by Section 8 with respect to replacements, modifications, improvements and alterations, (y) if Lessee reasonably believes that such Restoration will be completed, and such Restoration is in fact completed, not later than nine months after Lessee's election to effect a Restoration pursuant to clause (i) of this Section 13(a) (but in no event later than the date which is one year before the applicable Expiration Date) and (z) if, at the time of such election, no Event of Default or Incipient Event of Default with respect to such Aircraft shall have occurred and be continuing, unless, in such event, Lessor shall have given its prior written consent to such Restoration. If Lessee shall have elected a Restoration and shall thereafter fail to complete the Restoration in accordance with the terms hereof, Lessee shall make the payments that would be required hereunder if it had not elected a Restoration.
(b) Substitutions . Lessee shall be permitted, following an Event of Loss, as part of a Restoration, to substitute for any Aircraft, Airframe or Engine equipment of the same make and model or an improved make and model (the "Substituted Equipment"), free and clear of all Liens other than Permitted Liens, of the same vintage or newer and in at least the condition required to be maintained under this Agreement, and with at least the value, utility and remaining useful life of the equipment being replaced (assuming such equipment was at least in the condition required to be maintained hereunder); provided that no substitutions of an Aircraft or an Airframe shall be permitted while an Event of Default with respect to such Aircraft or Airframe shall have occurred and be continuing. Prior to any such substitution, Lessee shall (i) furnish Lessor with a full warranty bill of sale, in form and substance satisfactory to Lessor, with respect to such Substituted Equipment; (ii) at its own cost and expense, take all steps necessary to convey good and legal title to such Substituted Equipment to Lessor; (iii) provide a certification of Lessee as to compliance by such Substituted Equipment with all terms and conditions of this Agreement and any applicable ILR, including compliance with all registration obligations and compliance with all insurance obligations hereunder; (iv) comply with the provisions of Section 3(b)(iii) and (iv) hereof; (v) enter into a new ILR or amendment to an existing ILR describing the Substituted Equipment; and (vi) provide a legal opinion of Lessee's counsel or other evidence reasonably satisfactory to Lessor of the due authorization, execution, delivery and enforceability of the bill of sale referred to in clause (i) of this sentence and the documents specified in clause (v) of this sentence. Each item of Substituted Equipment shall become an "Aircraft", "Airframe" or "Engine", as the case may be, for purposes of this Agreement and any applicable Lease, and shall be subject to all terms and provisions hereof and thereof. Notwithstanding the foregoing, no equipment may be substituted for any Aircraft,. Airframe or Engine if (x) such substitution would cause the Aircraft to be "limited use property", within the meaning of Rev. Proc. 76-30, 1976-2 C.B. 647, (y) in the case of an Engine, such replacement Engine is not of the type commonly used with the applicable Airframe or is not compatible with the other Engine used on the applicable Airframe; or (z) such equipment is subject to any Liens (other than Permitted Liens). Notwithstanding anything to the contrary that may be contained in Section 13(a) or in this Section 13(b), in the event of the occurrence of an Event of Loss with respect to an Engine, Lessee shall be required to substitute an engine for such Engine in accordance with this Section 13 and shall not be permitted to make any payment of Stipulated Loss Value with respect to such Engine in lieu of such substitution.
(c) Application of Payments . Any payments (except under insurance described in Section 9(b) hereof) received at any time by Lessor, Owner Participant or Lessee from any governmental authority, insurer or other Person (except payments received by Lessor from Lessee under Section 13(a) or otherwise) as a result of the occurrence of an Event of Loss with respect to an Aircraft shall be applied as follows:
	(i) all such payments received at any time by Lessee shall be promptly paid to Lessor for application pursuant to the following provisions of this Section 13(c), except that Lessee may retain any amounts that would at the time be due and payable to Lessee as reimbursement under the provisions of paragraph (ii) or (iii) below;
	(ii) so much of such payments as shall not exceed the Stipulated Loss Value for such Aircraft required to be paid by Lessee pursuant to Section 13(a) and all other amounts then due and payable by Lessee under the applicable Lease shall be applied in reduction of Lessee's obligation to pay such amounts, if not already paid by Lessee, or, if already paid by Lessee, shall be applied to reimburse Lessee for its payment of such amount; and
	(iii) the balance, if any, of such payments remaining thereafter shall be divided between Lessor and Lessee as their interests may appear with respect to such Aircraft.
(d) Application of Payments not Relating to the Event of Loss . Payments (except under insurance described in Section 9(b) hereof) received at any time by Lessor, Owner Participant or Lessee pursuant to Section 3(c) or from any governmental authority, insurer or other Person with respect to any destruction, damage, loss, condemnation, confiscation, theft or seizure of or requisition of title to any Aircraft or any Part thereof during the Lease Term of the Lease of such Aircraft not constituting an Event of Loss or constituting an Event of Loss if Lessee shall have elected to make Restoration pursuant to the terms hereof, or with respect to any and all indemnification rights and warranties assigned pursuant to Section 3(c), shall be applied to pay or to reimburse Lessee for repairs to or Restoration or replacement of property in respect of which such payment was received and, after Completion of such repairs, restoration or replacement, the balance, if any, of such payments shall be divided between Lessor and Lessee as their interests may appear with respect to such Aircraft.
(e) Application of Certain Taking Payments . Notwithstanding the provisions of Section 13(c), payments received at any time by Lessor or Lessee from any governmental authority as a result of the taking or the use of any Aircraft or any Part thereof during the Lease Term of the Lease of such Aircraft not constituting an Event of Loss shall be applied in payment of repairs to or restoration or replacement of property in accordance with Section 8 (or to reimburse Lessee therefor), and any balance remaining after Lessee shall be in compliance with Section 8 shall be paid to or retained by Lessee. Unless such taking shall constitute an Event of Loss, Lessee shall remain obligated under the applicable Lease to the same extent as if such taking had not occurred.
(f) Application of Payments During an Event of Default . Notwithstanding the foregoing provisions of this Section 13, so long as any Event of Default or Incipient Event of Default under any Lease shall have occurred and be continuing, any amount that would otherwise be payable to or for the account of, or that would otherwise be retained by, Lessee pursuant to this Section 13 shall be paid to and held by Lessor as security for the obligations of Lessee under any applicable Lease and if Lessor declares any Lease to be in default pursuant to Section 15(a), applied against Lessee's obligations hereunder as and when due. At such time thereafter as no such Event of Default or Incipient Event of Default shall be continuing, such amounts shall be paid promptly to Lessee to the extent not previously applied in accordance with the preceding sentence.
SECTION 14 . Return of Aircraft .
(a) Return Conditions Generally . Unless an Event of Loss occurs and there is no Restoration, upon the termination of the applicable Lease (including, without limitation, a termination pursuant to Section 18) or upon demand for such Aircraft pursuant to Section 16, Lessee, at its own expense, will return such Aircraft by delivering it to Lessor at the end of the applicable Lease Term (including, if applicable, the Renewal Term), or on the date specified under Section 16 or Section 18, as the case may be, at any reasonable location in the continental United States chosen by Lessee and reasonably acceptable to Lessor. Upon such return, each Aircraft (i) shall be in good operating condition, reasonable wear and tear excepted, and at a minimum shall be in the condition required to be maintained under the applicable Lease, and shall possess a valid certificate of airworthiness issued by the FAA; (ii) shall be clean by airline operating standards; (iii) shall be duly registered with the FAA in the name of Lessor or its designee (unless such registration is prohibited as a result of the failure of Lessor, Owner Participant or Lessor's designee to be eligible on such date to own such Aircraft registered with the FAA); (iv) shall have any insignia of Lessee or any sublessee or any other marking indicating possession by Lessee or such sublessee of such Aircraft painted over or removed in a workmanlike manner; and (v) shall be free and clear of all Liens (except Lessor's Liens), including without limitation any rights of third parties under pooling, interchange, overhaul, repair or other similar agreements or arrangements; provided , however , that Lessee shall be allowed a reasonable time not exceeding _______ days following the return of any Aircraft registered outside the United States of America to obtain an airworthiness certificate from the FAA and to comply with clause (iii) of this sentence with respect to such Aircraft.
(b) Return of Engines . Upon return of an Aircraft, it shall be fully equipped and have installed thereon the number of Engines of the same make and the same or an improved model as the Engines that were described with respect to such Aircraft in Exhibit A attached hereto on the Delivery Date with respect to such Aircraft (or other engines of the same or another manufacturer suitable for installation and use on the Airframe and compatible with the other Engine(s) or engine(s) installed on such Airframe); provided that replacement engines shall meet the requirements for substituted engines set forth in Section 13(b) of this Agreement, including that such engine shall be of the type commonly used on the relevant Airframe and be in at least as good operating condition and have at least the same value and utility as the Engines being replaced free and clear of all Liens (other than Lessor's Liens). If any engines not-owned by Lessor are returned with the Airframe, Lessee shall, at its own cost and expense, furnish Lessor with a full warranty bill of sale with respect to such engines and shall take such other steps as are required under Sections 13(b) with respect to the substitution of an Engine including all steps as Lessor shall reasonably request to ensure that title is duly and properly vested in Lessor and free and clear of all Liens (other than Lessor's Liens).
(c) Logs and Manuals . In addition to the foregoing, Lessee shall, at its own cost and expense, deliver to Lessor all logs, manuals and data with respect to the Aircraft being returned necessary for use or ownership of such Aircraft by Lessor or required pursuant to applicable rules and regulations with respect to such Aircraft, and shall assign to Lessor all reasonably desirable warranties with respect to such Aircraft (as determined in good faith by Lessee), and all registrations, licenses and permits, to the extent permitted under applicable law, required to be possessed by an owner or user of such Aircraft.
(d) Temporary Storage . Upon written request of Lessor, Lessee will provide temporary storage for an Aircraft for a period of no longer than 30 days after the applicable ,Expiration Date; provided that any costs and expenses of such storage shall be paid by Lessor, and provided further that risk of loss with respect to such Aircraft during such period shall be with Lessor.
SECTION 15 . Events of Default . The following events shall constitute Events of Default (whether by operation of law or as the result of voluntary or involuntary action on the part of Lessee or the effect of any governmental or other requirements) and shall give rise to rights on the part of Lessor described in Section 16 with respect to the Aircraft under the Lease in respect of which such Event of Default has occurred:
(a) Lessee shall fail to make any payment of Rent, Interim Rent or any other payment due from Lessee under such Lease within fifteen days from the date such Rent, Interim Rent or other payment is due;
(b) Lessee shall fail to carry or maintain'(or cause to be carried or maintained) insurance on or with respect to an Aircraft in accordance with the provisions of Section 9 of this Agreement;
(c) Lessee shall fail in any material respect in the performance of any other obligation or covenant of Lessee to Lessor or Owner Participant and the continuance of such failure for 30 days after written notice is received by Lessee; provided, however , that if such failure can be cured by Lessee within a reasonable time and Lessee is diligently pursuing said cure, and neither Lessor nor Owner Participant is materially disadvantaged during such cure period, such failure shall not constitute an Event of Default until 90 days after the written notice described above is received by Lessee, and provided further that if such failure is caused by the failure of a sublessee to perform under a sublease and such failure cannot be cured without possession of an Aircraft, then, so long as Lessee is diligently pursuing efforts to obtain possession of such Aircraft, such failure shall not be an Event of Default until the earlier of the end of the applicable Lease Term or until Lessee has obtained possession of the Aircraft;
(d) Bankruptcy of Lessee; or
(e) Any representation or warranty of Lessee hereunder proves to be untrue in any material respect, 30 days after written notice of such matter to Lessee; provided, however, that if such representations or warranty can be made accurate on a prospective basis, an Event of Default shall not exist if Lessee causes such representation or warranty to be true on a prospective basis within 90 days after the receipt by Lessee of written notice of such matter.
SECTION 16. Rights of Lessor Upon Default of Lessee . Upon the occurrence and during the continuance of any of the Events of Default described in Section 15 of this Agreement in respect of any Lease, Lessor may in its discretion do one or more of the following:
(a) terminate such Lease five days after Lessee's receipt of written notice from Lessor;
(b) whether or not such Lease is terminated and subject in each case to the rights of any Permitted Sublessee, take immediate possession of any or all Aircraft leased under such Lease, including substituted parts, accessories or equipment or property of Lessor in the possession of Lessee, wherever situated and for such purpose, enter upon any premises in accordance with applicable law, all without liability to Lessor for or by reason of such entry or taking possession;
(c) whether or not any action has been taken under Sections 16(a) or (b) above, Lessor may sell any Aircraft leased under such Lease (with or without the concurrence or request of Lessee); provided that any such sale shall be subject to the rights of any Permitted Sublessee; and Lessor shall retain all proceeds from such sale. In addition, if the sales proceeds (reduced by any legal costs or other costs or expenses incurred by Lessor in connection therewith) are less than the Stipulated Loss Value of the Aircraft sold, Lessee shall pay to Lessor, as liquidated damages for loss of bargain and not as a penalty, any such shortfall; provided, however that upon payment by Lessee of all amounts due under this Section 16(c), any obligation of Lessee to pay Rent accruing after the date of such payment shall cease;
(d) whether or not any action has been taken under Sections 16(a) or (b) above, but not if the applicable Aircraft has been sold or released pursuant to clause (c) above or clause (e) below, respectively, demand that Lessee pay to Lessor, and Lessee shall pay (i) any unpaid Rent, Interim Rent and other amounts due for periods prior to the date of such demand with respect to such Lease, and (ii) as liquidated damages for the loss of a bargain and not as a penalty, an amount equal to Stipulated Loss Value less the Fair Market Value of the Aircraft leased under such lease as of the date of such demand; provided, however , that upon payment by Lessee of all amounts due under this Section 16(d), any obligation of. Lessee to pay Rent accruing after the date of such payment shall cease,
(e) hold, use or lease any Aircraft leased under such Lease as Lessor in its sole discretion may decide, subject, however, to the rights of any Permitted Sublessee, and continue to hold Lessee liable for any deficiency between the rent received by Lessor from others and the Rent payable hereunder for the balance of the Lease Term of the Lease; or
(f) invoke and exercise any other remedy or remedies available to Lessor by law or in equity for any or all Aircraft leased under such Lease, subject in each case to the rights of any Permitted Sublessee.
In addition to the foregoing, Lessee shall be and remain liable, except as provided above, for paying or reimbursing Lessor for (x) any and all Rent and other amounts due and payable pursuant to the Lease with respect to which an Event of Default has occurred prior to or after such Event of Default, and (y) all reasonable out of pocket costs and expenses incurred by Lessor in connection with any exercise of its remedies provided in this Section 16. Except as expressly referred to above, no remedy referred to in this Section 16 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No express or implied waiver of an Event of Default shall be interpreted to be a waiver of any future or subsequent Event of Default.
SECTION 17 . Lessor Agreements and Rights .
(a) Quiet Enjoyment . Each of Lessor and Owner Participant hereby agrees that, so long as no event of default with respect to an Aircraft under its sublease, if any has occurred and is continuing, or Event of Default if no Sublease is in effect with respect to such Aircraft it shall not take or cause, permit or suffer to be taken any action contrary to Lessee's (and any Permitted Sublessee's) right to quiet enjoyment of and the continuing possession, use and operation of such Aircraft during the Lease Term of the applicable Lease.
(b) Disclaimer of Warranties . The warranties set forth in this Section 17 are in lieu of all other representations and warranties of Lessor or Owner Participant with respect to the Aircraft, whether written, oral or implied. As between Lessor, Owner Participant and Lessee, execution by Lessee of this Agreement and any ILR shall be conclusive proof of the compliance of each Aircraft subject to the applicable Lease with all requirements of such Lease. LESSOR LEASES AND LESSEE TAKES EACH AIRCRAFT AND EACH PART THEREOF "AS IS" AND "WHERE IS", AND NEITHER LESSOR NOR OWNER PARTICIPANT SHALL BE DEEMED TO HAVE MADE, AND LESSOR AND OWNER PARTICIPANT HEREBY DISCLAIM, ANY OTHER REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING THE DESIGN OR CONDITION OF SUCH AIRCRAFT, OR ANY PART THEREOF, THE MERCHANTABILITY THEREOF OR THE- FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO SUCH AIRCRAFT OR ANY PART THEREOF, THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, NOR SHALL LESSOR OR OWNER PARTICIPANT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LIABILITY IN TORT, STRICT OR OTHERWISE), it being agreed that all such risks, as among Owner Participant, Lessor (both as Trustee under the Trust Agreements and in its individual capacity) and Lessee, are to be borne by Lessee, except that each of Lessor (both as Trustee under the Trust Agreement(s) and in its individual capacity) and Owner Participant hereby represents, warrants and covenants that (i) in the case of Lessor, it shall have received whatever title to the Aircraft as was conveyed to Lessor; (ii) on the applicable Delivery Date, and thereafter until the end of the applicable Lease Term, the Aircraft shall be free of Lessor's Liens attributable to it; and (iii) on the date hereof, the applicable Delivery Date, and, in the case of Owner Participant, thereafter until the expiration or termination of this Agreement, it will be a "citizen of the United States" as defined in Title 49 U.S.C. Section 40102(a)(15); provided, however, that in the case of Lessor, Lessor agrees (in its individual capacity) that if at any time it shall obtain actual knowledge that it has ceased to be, or is reasonably likely to cease to be, a "citizen of the United States" as defined in the Act, it will promptly resign as owner trustee under the Trust Agreement (if and so long as such citizenship is necessary under the Act or any other law to permit the continued registration of the Aircraft in the name of Lessor or, if it is not necessary, if and so long as Lessor's citizenship would have a material effect on Lessee or any Permitted Sublessee). The provisions of this Section 17(b) have been negotiated as a basis of the bargain contained in this Agreement, and, except as provided in Section 17(a) and in this Section 17(b), the foregoing provisions are intended to be a complete exclusion and negation of any representation or warranty by Lessor, express or implied, with respect to any Aircraft that may arise pursuant to any law now or hereafter in effect or otherwise.
(c) Inspections . Each of Lessor and Owner Participant and its authorized representatives may (i) inspect, at reasonable times with reasonable notice to Lessee and at Lessor's expense, any Aircraft and the books and records of Lessee relative thereto (it being understood that Lessee need not disclose any confidential commercial data, cost data or trade secrets), and (ii) make copies and extracts therefrom, and Lessee shall furnish to Lessor statements accurate in all material respects regarding the condition and state of repair of such Aircraft, all at such times as may be reasonably requested by Lessor. Lessor shall not have any duty to make any such inspection or inquiry and shall not incur any liability or obligation by reason of not making any such inspection or inquiry. Any prospective purchaser of any Aircraft and its authorized representative may, subject to the rights of sublessees under subleases in existence prior to subjecting the relevant Aircraft to this Lease, exercise the inspection rights referred to in clause (i). Any sublease or sub-sublease entered into in accordance herewith with respect to any Aircraft shall contain an inspection provision substantially similar to this Section allowing Lessor to inspect such Aircraft.
(d) Right to Perform for Lessee . If Lessee shall fail to perform or comply with any of its agreements contained in a Lease, and the effect of such failure is to diminish the value, utility or remaining useful life of an Aircraft in a materially adverse manner (based upon the value, utility and useful life of such Aircraft as of the Delivery Date) or to present the risk of significant damages to Lessor, subject to prior written notice to Lessee and only if such material failure continues after giving Lessee a reasonable opportunity to remedy such failure (which, in no event shall be more than five Business Days), Lessor may, but shall not be obligated to, perform or comply with such agreement, and the amount of all reasonable costs and expenses (including reasonable attorneys' fees and expenses) incurred by Lessor in connection with such performance or compliance, together with interest thereon at the Late Payment Rate from and including the date of performance by Lessor to but not including the date of payment by Lessee, shall be payable by Lessee to Lessor upon demand. No such payment or performance shall waive any Event of Default or relieve Lessee of any of its obligations hereunder.
(e) Liens . Each of Lessor (in its individual capacity and as Trustee under the Trust Agreement(s)) and Owner Participant agrees that it shall not directly or indirectly create, incur, assume or suffer to exist, and shall immediately remove or cause to be removed, any Lessor's Lien attributable to .it on or with respect to any Aircraft, title thereto or any interest therein other than the obligations of this Lease Agreement and Liens being contested in good faith by appropriate proceedings so long as such proceedings do not result in any material risk of the sale or forfeiture of the Aircraft or any interest therein (except to the extent Lessor or Owner Participant, as the case may be, shall have provided security to protect against such risk).
SECTION 18 . Lessee's Option to Terminate .
(a) Right to Terminate . If Lessor shall have entered into a binding agreement to sell an Aircraft, Lessor shall provide written notice of such fact to Lessee at least 10 Business Days prior to the date of the proposed consummation of the sale of such' Aircraft (the "Termination Date"). Lessee shall have the right to terminate the Lease with respect to such Aircraft by giving Lessor irrevocable written notice of its election to exercise such right, which notice shall be given to the Lessor at least 5 Business Days prior to the Termination Date. Upon receipt of such notice from the Lessee, Lessor shall compute the Master Lease Termination Fee and shall provide written notice to the Lessee of the amount of such fee not less than 2 Business Days prior to the Termination Date.
(b) Payment of the Master Lease Termination Fee . Lessee shall pay the Master Lease Termination Fee to Lessor on the Termination Date, and Lessee shall simultaneously pay to Lessor all Rent and all other amounts, if any, due or accrued through such date, whereupon the Lease Term of the Lease of such Aircraft shall end.
(c) Return of Aircraft . Upon termination of the Lease Term of any Aircraft pursuant to Section 18(a), the Lessee shall return the Aircraft to the Lessor in accordance with Section 14.
SECTION 19. Net Lease . Each Lease shall be a net lease and, except as otherwise expressly provided in this Agreement, shall not terminate, nor shall Lessee be entitled to any abatement, reduction, setoff, counterclaim, defense or deduction with respect to any Interim Rent, Rent or other sum payable hereunder. Except as otherwise expressly provided in this Agreement or in the applicable ILR, the obligations of Lessee under each Lease shall not be affected by reason of: (a) any damage to or destruction of any Aircraft or any Part thereof by any cause whatsoever; (b) any condemnation of any Aircraft; (c) any prohibition, limitation, restriction or prevention of Lessee's use or enjoyment of any Aircraft by any person; (d) any matter affecting title to any Aircraft or any Part thereof; (e) any loss of possession by Lessee of any Aircraft or any portion, by reason of title paramount or otherwise; (f) the invalidity or unenforceability of any provision hereof or the impossibility or illegality of performance by Lessor or Lessee or both; (g) any action of any federal, state, local or foreign governmental authority; (h) any Bankruptcy of Lessee or any other Person; (i) any breach, default or misrepresentation of Lessor or Owner Participant; or (j) any other cause or occurrence whatsoever, whether similar or dissimilar to the foregoing. The parties intend that the obligations of Lessee under any Lease shall continue unaffected unless such obligations shall have been modified or terminated pursuant to an express provision of this Agreement or the applicable ILR.
SECTION 20 . Miscellaneous.
(a) Further Assurances . Lessee, at its own expense, shall promptly and duly execute, deliver, file and record all such documents, statements, filings and registrations, and take such further action as Lessor from time to time shall reasonably request in order to (i) establish, perfect and maintain Lessor's title to and interest in each Aircraft as against Lessee or any third party (including any sublessee or sub-sublessee) and (ii) protect the rights and remedies created or intended to be created under any Lease in favor of Lessor. Lessee shall take no written position (including the filing of any tax return) that would be contrary to the position that Lessor is the legal owner and Owner Participant is the beneficial owner of each Aircraft. Lessee agrees that if an officer of Lessee has knowledge of the existence of an Event of Default or any condition or event which constitutes an Event of Default or which, with notice or lapse of time or both, would, unless cured or waived, become an Event of Default, Lessee shall promptly give notice thereof to Lessor.
(b) Severability . In the event that any one or more of the provisions of this Agreement or any Lease shall be determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions thereof shall not in any way be affected or impaired thereby.
(c) Survival of Representations, Warranties, Etc . All representations, warranties and indemnities of the parties hereto provided for in any Lease shall survive the execution and delivery of this Agreement and the applicable ILR and any disposition of any interest of Lessor in any Aircraft and shall be and continue in effect notwithstanding any investigation made by any such parties. The obligations of Lessee shall survive the expiration or termination of any Lease to the extent such obligations relate to periods prior to the date of such expiration or termination.
(d) Successors and Assigns . Unless an Event of Default shall have occurred and be continuing, neither Lessor nor Owner Participant may assign, transfer, pledge, encumber or otherwise hypothecate, in whole or in part, (i) this Agreement, or (ii) while any Lease is in effect pursuant to the terms of this Agreement, such Lease or its interest in any Aircraft subject to such Lease, in each case, to any other Person without the prior written consent of Lessee. Lessee may not assign, transfer, pledge, encumber or otherwise hypothecate in whole or in part this Agreement or any Lease, or except as expressly permitted in this Agreement or any Lease, any Aircraft without the prior written consent of Lessor or Owner Participant. This Agreement and each Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except as expressly provided herein, nothing in this Agreement or any ILR is intended or shall be construed to confer upon any Person, other than the parties hereto, Indemnified Persons and their respective successors and permitted assigns, any right, remedy or claim under or by reason of this Agreement or such ILR or any provision contained herein or therein.
(e) Notices . Any notice hereunder must be in writing and delivered personally or by United States Mail, Registered or Certified, Return Receipt Requested, United States Express Mail or Federal Express or equivalent courier service, or given by facsimile or telecopy followed promptly by physical delivery thereof by one of the foregoing methods, and shall be effective only if and when received by the party to be notified, and in the case of a facsimile or telecopy, upon confirmation of receipt. For purposes of notice, the addresses of the parties shall be as set forth below or as may be designated in writing from time to time.
		Lessee:	Potomac Capital Investment Corporation 900 19th Street, N.W. Suite 600 Washington, D.C. 20006 Attention: Contract Administration Fax: (202) 857-5760
		with a copy to:
			King & Spalding 191 Peachtree Street Atlanta, Georgia 30303-1763 Attention: __________________ Fax: (404) 572-5100
		Lessor:	Wilmington Trust Company Rodney Square North 1100 N. Market Street Wilmington, DE 19890-0001 Attention: Corporate Trust Administration
		with copies to:
			King & Spalding 191 Peachtree Street Atlanta, Georgia 30303-1763 Attention: _______________ Fax: (404) 572-5100
		and:	Potter Anderson & Coroon 902 N. Market Street, Suite 350 Wilmington, DE 19801 Attention: Michael M. Ledyard, Esquire
		Owner Participant:
			PCI Air Management Partners, L.L.C. _______________________________ _______________________________ _______________________________
		with a copy to:
			King & Spalding191 Peachtree StreetAtlanta, Georgia 30303-1763Attention: _______________ Fax: (404) 572-5100
(f) Amendments . No amendment, modification or waiver of any provision of this Agreement, nor consent to any departure by either party herefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose which given.
(g) Headings and Recitals . The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement for any purpose. The recitals contained herein are for the convenience of the parties and shall not constitute representations and warranties.
(h) Execution in Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same agreement.
(i) GOVERNING LAW . THIS AGREEMENT [HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND] SHALL BE GOVERNED BY AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Each of Lessor, Owner Participant and Lessee hereby irrevocably submits itself to the nonexclusive jurisdiction of any New York State court and to the jurisdiction of the united States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of any Lease or the subject matter thereof brought by Lessee, Owner Participant or Lessor, respectively, and, to the fullest extent permitted by applicable law, hereby waives, and agrees not to assert, in any suit, action or proceeding, any defense in the nature of a claim of forum non conveniens. Each of Lessor, Owner Participant and Lessee hereby agrees that service of process in any such proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid to its address specified in Section 20 hereof.
(j) Entire Agreement . This Agreement and the applicable ILRs constitute the entire agreement and understanding between the parties hereto in respect of each Lease and shall supersede any and all prior agreements and understandings, oral or written, relating to the subject matter thereof.
(k) No Merger . There shall be no merger of any Lease or the leasehold interest thereby created with the title to any Aircraft or any portion thereof or interest therein by reason of the fact that the same Person may acquire or hold directly or indirectly such Lease or the leasehold interest created thereby, or any interest in such Lease or in any such leasehold interest, as well as title to such Aircraft.
(l) WAIVER OF JURY TRIAL . LESSOR AND LESSEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,' UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY LEASE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LESSOR'S ENTERING INTO THIS AGREEMENT OR ANY LEASE.
(m) Lessee's Obligations . Lessee may cause any and all of its obligations hereunder to be performed on behalf of Lessee by any Person with the same effect as if Lessee had performed such obligation directly.
(n) No .Security Interest . There shall be only one original of each ILR, and it shall be marked "Original." To the extent, if any, that an ILR constitutes chattel paper (as such term is defined in the Uniform Commercial Code in effect in any applicable jurisdiction), no security interest therein may be created in any document other than the ILR so marked "Original."
(o) Owner Trustee . Wilmington Trust Company (the "Bank") is entering into this Agreement solely as Owner Trustee under the Trust Agreement and not in its individual capacity, and the Bank shall not be personally liable for, or for any loss in respect of, any of the statements, representations, warranties, agreements or obligations of Lessor hereunder, as to all of which Lessee may proceed only against the Trust Estate; provided, that the Bank shall be liable hereunder for its own gross negligence or willful misconduct or for a breach of its representations and warranties made in its' individual capacity in this Agreement. The Bank accepts the benefits of the indemnification granted, and representations and warranties made, to it hereunder.
(p) TRUTH IN LEASING. EACH AIRCRAFT HAS OR WILL BECOME SUBJECT TO THE MAINTENANCE REQUIREMENTS OF PART 91 OF THE FEDERAL AVIATION REGULATIONS ("FARS") UPON THE REGISTRATION OF THE AIRCRAFT WITH THE FAA. LESSEE CERTIFIES THAT EACH AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER PART 91 OF THE FARS FOR OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT; PROVIDED HOWEVER, THAT IF THE AIRCRAFT IS IN POSSESSION OF AN AIR CARRIER CERTIFICATED UNDER PART 121 OF THE FARS, THEN THE AIRCRAFT WILL BE MAINTAINED BY SUCH PARTY IN ACCORDANCE WITH PART 121 OF THE FARS. UPON EXECUTION OF ANY ILR, AND DURING THE TERM OF ANY LEASE, LESSEE, WHOSE NAME AND ADDRESS ARE SET FORTH IN SECTION 20(e) ABOVE, CERTIFIES THAT LESSEE SHALL BE RESPONSIBLE FOR THE OPERATIONAL CONTROL OF THE AIRCRAFT UNDER SUCH LEASE, UNLESS, THE AIRCRAFT IS SUBLEASED TO AN AIR CARRIER CERTIFICATED UNDER PART 121 OF THE FARS. LESSEE FURTHER CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FARS, PROVIDED HOWEVER, THAT LESSEE SHALL NOT BE DEEMED TO BE RESPONSIBLE FOR THE OPERATIONAL CONTROL OF THE AIRCRAFT FOR SO LONG AS THE AIRCRAFT IS IN THE POSSESSION OF ANY SUBLESSEE THAT IS CERTIFICATED UNDER PART 121 OF THE FARS. AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FARS CAN BE OBTAINED FROM THE NEAREST FEDERAL AVIATION FLIGHT STANDARD DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE OR AIR CARRIER DISTRICT OFFICE.
IN WITNESS WHEREOF, 'the parties hereto have caused this Agreement to be executed by their respective officers or representatives thereunto duly authorized as of the date first above written.
[Signatures to follow on separate pages]
					WILMINGTON TRUST COMPANY, not in its individual capacity, except as otherwise expressly provided herein, but solely as Owner Trustee By: ____________________________________ Name: Title:
THIS IS A SIGNATURE PAGE TO THE MASTER LEASING AGREEMENT AND IS EXECUTED BY THE PARTY THERETO NAMED ABOVE.
				POTOMAC CAPITAL INVESTMENT CORPORATION, as Lessee By: ____________________________________ Name: Title:
THIS IS A SIGNATURE PAGE TO THE MASTER LEASING AGREEMENT AND IS EXECUTED BY THE PARTY THERETO NAMED ABOVE.
				PCI AIR MANAGEMENT PARTNERS, L.L.C. as Owner Participant By: ____________________________________ Name: Title:
THIS IS A SIGNATURE PAGE TO THE MASTER LEASING AGREEMENT AND IS EXECUTED BY THE PARTY THERETO NAMED ABOVE.

EXHIBIT A TO MASTER LEASING AGREEMENT

AIRFRAMES AND ENGINES

Manufacturer

Model

FAA Registration No.

Manufacturer Serial No

Engine Manufacturer and Model

Engine Serial No.

Contribution Value

EXHIBIT B TO MASTER LEASING AGREEMENT Form of Individual Leasing Record
Individual Leasing Record No. ___ to Master Leasing Agreement dated as of November __, 1995, among ______________________, its successors and assigns, not in its individual capacity, except as otherwise expressly set forth in the Master Leasing Agreement (as defined below), but solely as Trustee (the "Trustee") under the Trust Agreement [ _________ ], dated as of ____________, 199[_], between Owner Participant (as defined below), and the Trustee, in connection with one ____________ aircraft, bearing manufacturer's serial number _______ and FAA Registration N __________ ("Lessor"), Potomac Capital Investment Corporation, its permitted successors and assigns ("Lessee"), and PCI Air Management Partners, L.L.C., its permitted successors and assigns ("Owner Participant").
The undersigned Lessor hereby leases to the undersigned Lessee, and Lessee hereby leases from Lessor and acknowledges delivery to it in good condition of, the equipment described below. The covenants, terms and conditions of the lease created hereby are those appearing in the Master Leasing Agreement among the undersigned Lessor, Owner Participant and Lessee dated as of November __, 1995 (the "Master Leasing Agreement"), which covenants, terms and conditions are hereby incorporated by reference, as supplemented by this Individual Leasing Record No. ___.
Lessee hereby agrees that the Lease created hereby shall be effective immediately upon the transfer of the beneficial interest in the trust estate created by the Trust Agreement described in the first paragraph hereof or, if later, upon the execution of this ILR by Lessee, Lessor and Owner Participant, in either case, irrespective of whether an Event of Loss shall have occurred with respect to the Aircraft prior to such transfer.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Master Leasing Agreement. For the purposes of the Lease created hereby, the following terms shall have, respectively, the following meanings:
DESCRIPTION OF EQUIPMENT : One ______________________ Aircraft, consisting of one Airframe (United States Registration Number N __________ and manufacturer's serial number ______), and ____________ Engines (manufacturer's serial number __________ and ___________, each of which has 750 or more rated takeoff horsepower or the equivalent of such horsepower) (the "______________ Aircraft").
INTERIM TERM (if applicable):
BASIC TERM:
DELIVERY DATE : _____________
ADDITIONAL TERMS : By its execution and delivery of this Individual Leasing Record No. ___, Lessee and Lessor hereby repeat as of the date hereof all of the representations and warranties set forth in Section 12 of the Master Leasing Agreement.
EXPIRATION DATE : _______________
BASIC RENT and RENT PAYMENT DATES : See schedule attached hereto.
STIPULATED LOSS VALUE : See schedule attached hereto.
INTERIM RENT : See schedule attached hereto.
INITIAL RENT PAYMENT DATE : __________, 199_.
INITIAL SUBLESSEE (if applicable) :
The Lease created hereby shall be upon, and include, the following terms:
IN WITNESS WHEREOF, the undersigned have caused this Individual Leasing Record to be executed by their respective officers or representatives thereunto duly authorized as of ___________, 199_.
Lessor:	WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title
Owner Participant:	PCI AIR MANAGEMENT PARTNERS, L.L.C. By: __________________________________ Name: Title
Lessee:	POTOMAC CAPITAL INVESTMENT CORPORATION By: __________________________________ Name: Title
Receipt of this original counterpart of the foregoing Individual Leasing Record No. _______________ is hereby acknowledged on this ____ day of ____________.1
	WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title
______________________ 1 This language contained in the original counterpart only.

STIPULATED LOSS VALUE SCHEDULE

Aircraft S/N _________

Date

Stipulated
Loss Value

RENT SCHEDULE

Aircraft S/N _________

Rent Payment
Date

Amount

EXHIBIT C TO LEASE AGREEMENT
Lease Termination Fee Worksheet
Net Sales Proceeds ("NSP") = gross sales proceeds of aircraft less selling costs.
Remaining Percentage of Lease ("RPPCIL") = days remaining in Lease divided by total term (in days) of the Lease.
Sales Proceeds Attributable to Lease ("SPAPCIL") = NSP * RPPCIL
Original Lease Value ("OPCILV") (See Table Below)
Lease Termination Value ("PCILTV") = OPCILV * RPPCIL
Lease Termination Fee = the greater of zero (0) or (PCILTV - SPAPCIL)
Original Lease Value
*	1974 Lockheed L-1011-50 (Serial No. 1072)	$ 1,982,463
*	1974 Lockheed L-1011-50 (Serial No. 1091)	1,982,463
	1975 Lockheed L-1011-50 (Serial No. 1107)	2,397,773
	1976 Boeing 747-200B (Serial No. 21162)	14,807,321
*	1976 Boeing 747-200B (Serial No. 21316)	14,538,061
	1973 McDonnell Douglas DC-10-30 (Serial No. 46576)	27,626,871
	1973 McDonnell Douglas DC-10-30 (Serial No. 47864)	27,626,871
	1974 McDonnell Douglas DC-10-30 (Serial No. 46940)	32,029,349
	1972 Boeing 747-238B (Serial No. 20527)	28,779,290
	1979 Fokker F-28 4000 (Serial No. 11152)	1,067,876
	1974 Lockheed L-1011-100 (Serial No. 1098)	2,438,742
	1975 Lockheed L-1011-100 (Serial No. 1104)	2,523,242
	1975 Lockheed L-1011-100 (Serial No. 1108)	2,523,242
	1975 Lockheed L-1011-100 (Serial No. 1111)	2,523,242
	1978 Boeing 747-238B (Serial No. 21657)	36,312,732
	1980 Fokker F-28 4000 (Serial No. 1161)	1,067,876
	Total	$200,227,412
______________________ * Aircraft not in U.S. Registry.

CERTIFICATE OF AMENDMENT to CERTIFICATE OF INCORPORATION of PEPCO NEWCO II, INC. (a Delaware corporation) Pursuant to Section 242 of the General Corporation Law of Delaware
It is hereby certified that: FIRST: In accordance with Section 141(f) and 242 of the Delaware General Corporation Law (the "DGCL"), the Board of Directors of Pepco Newco II, Inc. (the "Corporation") on October 29, 2001, adopted a resolution to amend the Certificate of Incorporation of the Corporation as described herein. Such amendment was declared advisable and the sole stockholder was directed to consider the amendment. SECOND: In accordance with Section 228 and 242 of the DGCL, the amendment of the Corporation's Certificate of Incorporation was duly approved by the sole stockholder of the Corporation on October 29, 2001. THIRD: The Certificate of Incorporation of the Corporation is hereby amended by striking out in its entirety ARTICLE FIRST and substituting the following:
	"FIRST: The name of the corporation is Seaboard Mechanical Services, Inc. (hereinafter the "Corporation")."
IN WITNESS WHEREOF, Pepco Newco II, has caused this Certificate to be signed in its name and on its behalf by its President this 29 ^th day of October, 2001, and its President acknowledges that this Certificate is the corporate act of the Corporation and that, to the best of his knowledge, information and belief, the matters and facts set forth herein are true in all material respects.
		PEPCO NEWCO II, INC. By: Jason Sanker Jason Sanker, President

BY-LAWS OF

Pepco Newco II, Inc.
(a Delaware Corporation)

August 14 , 2001

PEPCO NEWCO II, INC.

BY-LAWS

ARTICLE I

OFFICES

Section 1. The registered office of PEPCO NEWCO, INC. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

ARTICLE II

MEETING OF STOCKHOLDERS

ARTICLE III

DIRECTORS

ARTICLE IV

INDEMNIFICATION

ARTICLE V

OFFICERS

ARTICLE VI

CERTIFICATES OF STOCK

            Section 1.       The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

            Section 2.       The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

            Section 3.       No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

ARTICLE VII

CHECKS, NOTES, CONTRACTS, ETC.

            All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

            All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

            Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

ARTICLE VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December of such year.

ARTICLE IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF PEPCO NEWCO II, INC.
For the purpose of organizing a corporation for conducting the business and promoting the purposes hereinafter stated under the provisions, and subject to the requirements, of the General Corporation law of the State of Delaware, the undersigned, a natural person, hereby certifies that: FIRST: The name of the corporation is Pepco Newco II, Inc. (hereinafter the "Corporation"). SECOND: The address, including street, number, city and county of the registered office of the Corporation in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Wilmington, Delaware 19808. The name of the registered agent of the Corporation at such address is Corporation Service Company, in the county of New Castle. THIRD: The Corporation is organized under the General Corporation Law of the State of Delaware for the purposes of engaging in any unlawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The duration of the Corporation shall be perpetual. FIFTH: The Corporation has authority to issue a total of one thousand (1,000) shares of common stock, all of one class, having a par value of one dollar ($1.00) per share, for a total authorized par value capital of one thousand dollars ($1,000). SIXTH: The name and mailing address of the incorporator of the Corporation are as follows:
	Name Robert D. Earle	Mailing Address Whiteford, Taylor & Preston, L.L.P. 7 St. Paul Street, Suite 1400 Baltimore, Maryland 21202
The powers of the incorporator will terminate upon filing of this Certificate of Incorporation.
SEVENTH: The number of directors of the Corporation shall be set forth in the by-laws of the Corporation. The Board of Directors is authorized to make, alter or repeal the by-laws of the Corporation. The Board of Directors may be elected by other than written ballot. The names and mailing address of the persons who are to serve as directors of the Corporation until the first annual meeting of stockholders or until their successors are elected and qualify are as follows:
	Name	Mailing Address
	E. R. Mayberry	2000 K Street, N. W., Suite 750 Washington, D.C. 20006
	William Shapiro	2000 K Street, N. W., Suite 750 Washington, D.C. 20006
	Robert Aylward	3220 Corporate Court, Suite A Ellicott City, Maryland 21042
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders, any court of equitable jurisdiction within the State of Delaware may, on application of any receiver or receivers appointed for the Corporation under the provision of Section 291 of General Corporation Law of the State of Delaware, or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware, order a meeting of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing at least three-fourths in value of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders, of the Corporation, as the case may be, and also on the Corporation. NINTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, and all such liability is hereby eliminated; provided, however, that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. TENTH: The Corporation, by action of its board of directors, shall indemnify any person who was or is a director, officer, agent and/or employee of the Corporation to the fullest extent allowed under Section 145 of the General Corporation Law of the State of Delaware from and against any and all of the expenses, liabilities, or other matters referred to in or covered by such Section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action by such person in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the heirs, executors and administrators of such a person. ELEVENTH: The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware regarding business combinations with interested stockholders. TWELFTH: Any amendment of this Certificate of Incorporation shall be made and effected only in the manner set forth herein. The board of directors shall adopt a resolution, by affirmative vote of at least two-thirds (2/3) of the directors then in office, at a meeting called for that purpose, setting forth the proposed amendment, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration of such amendment or directing that the proposed amendment be considered at the next annual meeting of stockholders. In order to be adopted, each proposed amendment to this Certificate of Incorporation must be approved by the affirmative vote of a majority of the outstanding shares of each class and series, if any, entitled to vote thereon. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 26 ^th day of June, 2001.
			/s/ Robert D. Earle Robert D. Earle, Incorporator

LIMITED LIABILITY COMPANY AGREEMENT

SEVERN CABLE, L.L.C.

This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of SEVERN CABLE, L.L.C. (the "Company"), is made by ENERGY AND TELECOMMUNICATIONS SERVICES, L.L.C., a Delaware limited liability company and the sole member of the Company (the "Member").

WHEREAS, the Member has formed the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del C. Sections 18-101, et seq., as amended from time to time (the "Act"), and hereby agrees as follows:

1. Name . The name of the Company is SEVERN CABLE, L.L.C.

2. Term . The term of the Company commenced on April 25, 2000 with the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Act and shall continue until dissolution and termination of the Company in accordance with Section 21 hereof.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby authorized to:

(b) act. as a trustee, executor, nominee, bailee, director, officer, agent or in some other fiduciary capacity for any person or entity and to exercise all of the powers, duties, rights and responsibilities associated therewith;

(e) borrow money and-issue evidences of indebtedness in furtherance of any or all of the purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the Company;

(h) enter into, perform and carry out contracts of any kind,. including, without limitation, contracts with the Member or any person or entity affiliated with the Member, necessary to, in connection with, convenient to, or incidental to the accomplishment of the purpose of the Company;

(i) employ or otherwise engage employees, managers, contractors, advisors, attorneys and consultants and pay reasonable compensation for such services;

(j) enter into partnerships, limited liability companies, trusts, associations, corporations or other ventures with other persons or entities in furtherance of the purpose of the Company; and

5. Principal Business Office . The principal business office of the Company shall be located at 1801 K Street, N.W., Suite 900, Washington, D.C. 20006 or any other location as may hereafter be determined by the Member.

6. Office . The address of the registered office of the Company in the State of Delaware is 1013 Centre Road, Wilmington, Delaware 19805.

7. Registered Agent . The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805.

8. Member . The name and mailing address of the Member are set forth on Schedule A attached hereto.

9. Limited Liability . Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

10. Capital Contributions . The Member shall contribute the amount of cash to the Company set forth on Schedule A attached hereto.

11. Additional Contributions . The Member is not required to make any additional capital contribution to the Company. However, the Member may make additional capital contributions to the Company at any time. To the extent the Member makes an additional capital contribution to the Company, the Member shall revise Schedule A of this Agreement.

12. Allocation of Profits and Losses . The Company's profits and losses shall be allocated to the Member.

13. Distributions . Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other applicable law.

14. Management.

(a) The business and affairs of the Company shall be managed under the direction and control of a management committee (the "Management Committee"), which shall consist of at least two (2) individuals, who need not be Members, and may be expanded or decreased from time to time as the Member may deem necessary. The Management Committee initially shall consist of the following persons: Steven M. Scherer and John R. Myers.

(c) Meetings of the Management Committee shall be held at the principal place of business of the Company or at any other place that a majority of the members of the Management Committee determine. In the alternative, meetings may be held by conference telephone, provided that each member of the Management Committee can hear the others. The presence of at least two (2) of the members of the Management Committee shall constitute a quorum for the transaction of business. Meetings shall be held once each month, or otherwise in accordance with a schedule established by the Management Committee. In addition, any member of the Management Committee may convene a meeting thereof upon at least two (2) business days' prior written notice to the other members. The Management Committee shall act at meetings by majority vote. The Management Committee also may make decisions, without holding a meeting, by written consent of a majority of the members of the Management Committee. Minutes of each meeting and a record of each decision shall be kept by the designee of the Management Committee and shall be given to the Member promptly after the meeting or decision.

(d) Except as otherwise determined by the Member, the members of the Management Committee shall serve without compensation from the Company.

24. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws.

25. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound thereby, has duly executed this Agreement as of the 25 ^th day of April , 2000.

ENERGY AND TELECOMMUNICATIONS SERVICES, L.L.C.

By:   /s/ STEVEN M. SCHERER
        Steven M. Scherer
        President and Chief Executive Officer

SCHEDULE A

SEVERN CABLE, L.L.C.

LIMITED LIABILITY COMPANY AGREEMENT

Name

Mailing Address

Agreed Value of Capital Contribution

Percentage Interest

Energy and Telecommunications Services, L.L.C.

1801 K Street, N.W
Suite 900
Washington, D.C. 20006

$1,000

100%

     STATE OF DELAWARE
   SECRETARY OF STATE
DIVISION OF CORPORATIONS
   FILED 09:00 AM 04/25/2000
    001209682 - 3217874

CERTIFICATE OF FORMATION

SEVERN CABLE, L.L.C.

The undersigned, an authorized natural person, for the purpose of forming a limited liability company, under the provisions and subject to the requirements of the State of Delaware (particularly Chapter 18, Title 6 of the Delaware Code and the acts amendatory thereof and supplemental thereof and known, identified, and referred to as the "Delaware Limited Liability Company Act"), hereby certifies that:

FIRST: The name of the limited liability company (hereinafter called the "limited liability company") is Severa Cable, L.L.C.

SECOND: The address of the registered office and the name and the address of the registered agent of the limited liability company required to be maintained by Section 18-104 of the Delaware Limited Liability Company Act are Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805.

Executed on April 25, 2000.

/s/ ELLEN D'ALELIO
Ellen d' Alelio
Authorized Person

LIMITED LIABILITY COMPANY AGREEMENT

SEVERN CONSTRUCTION, L.L.C.

This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of SEVERN CONSTRUCTION, L.L.C. (the "Company"), is made by ENERGY AND TELECOMMUNICATIONS SERVICES, L.L.C., a Delaware limited liability company and the sole member of the Company (the "Member").

WHEREAS, the Member has formed the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, et seq. , as amended from time to time (the "Act"), and hereby agrees as follows:

1. Name . The name of the Company is SEVERN CONSTRUCTION, L.L.C.

2. Term. The term of the Company commenced on April 26, 2000 with the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Act and shall continue until dissolution and termination of the Company in accordance with Section 21 hereof.

3. Purpose. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers. In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby authorized to:

(e) borrow money and issue evidences of indebtedness in furtherance of any or all of the purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the Company;

(g) prepay in whole or in pan, re finance, recast, increase, modify or extend any indebtedness of the Company and, in connection therewith, execute any extensions, renewals or modifications of any mortgage or security agreement securing such indebtedness;

(i) employ or otherwise engage employees, managers, contractors, advisors, attorneys and consultants and pay reasonable compensation for such services;

(j) enter into partnerships, limited liability companies, trusts; associations, corporations or other ventures with other persons or entities in furtherance of the purpose of the Company; and

6. Office . The address of the registered office of the Company in the State of Delaware is 1013 Centre Road, Wilmington, Delaware 19805.

8. Member. The name and mailing address of the Member are set forth on Schedule A attached hereto.

9. Limited Liability . Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated. personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

10. Capital Contributions . The Member shall contribute the amount of cash to the Company set forth on Schedule A attached hereto.

12. Allocation of Profits and Losses . The Company's profits and losses shall be allocated to the Member.

14. Management .

(a) The business and affairs of the Company shall be managed under the direction and control of a management committee (the "Management Committee"), which shall consist of at least two (2) individuals, who need not be Members, and may be expanded or decreased from time to time as the Member may deem necessary. The Management Committee initially shall consist of the following persons: Steven M. Scherer and John R. Myers.

(c) Meetings of the Management Committee shall be held at the principal place of business of the Company or at any other place that a majority of the members of the Management Committee determine. In the alternative, meetings may be held by conference telephone, provided that each member of the Management Committee can hear the others. The presence of at least two (2) of the members of the Management Committee shall constitute a quorum for the transaction of business. Meetings shall be held once each month, or otherwise in accordance with a schedule established by the Management Committee. In addition, any member of the Management Committee may convene a meeting thereof upon at least two (2) business days prior written notice to the other members. The Management Committee shall act at meetings by majority vote. The Management Committee also may make decisions, without holding a meeting, by written consent of a majority of the members of the Management Committee. Minutes of each meeting and a record of each decision shall be kept by the designee of the Management Committee and shall be given to the Member promptly after the meeting or decision.

(d) Except as otherwise determined by the Member, the members of the Management Committee shall serve without compensation from the Company.

15 Officers.

(a) The Management Committee may, from time to time as it deems advisable, appoint officers of the Company (the "Officers") and assign in writing titles (including, without limitation, President, Vice President, Secretary, and Controller) to any such person. Unless the Management Committee decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. The Officers shall be subject to the general supervision and control of the Management Committee and shall carry out the policy decisions made by the members of the Management Committee. At each regular meeting of the Management Committee(and, when requested by any member thereof, at any special meeting of the Management Committee), the President or other appropriate Officers shall be present and shall report to the Management Committee on the operations of the Company or any other matters as any member of the Management Committee may request. Any delegation pursuant to this Section 15 may be revoked at any time by the Management Committee. An Officer may be removed with or without cause by the Management Committee.

(b) At the direction of the Management Committee, the President and other appropriate Officers shall have the full power to perform any act that an "authorized person" may perform under the Act, and to execute, for and on behalf of the Company, any and all documents and instruments which may be necessary to carry on the business of the Company, including, without limitation, any and all deeds, contracts, leases, mortgages, deeds of trust, promissory notes, guarantees, security agreements, and financing statements pertaining to the Company's assets or 'obligations. No person dealing with the President or any other Officer need inquire into the validity or propriety of any document or instrument executed in the name of the Company by the President or other Officer, or as to the authority of the President or other Officer in executing the same.

16. Other Business . The Member may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others. The Company shall not have any rights in .or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

17. Exculpation and Indemnification. No member of the Management Committee or Officer (each of whom is hereinafter referred to as a "Manager") shall be liable to the Company or the Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that a Manager shall be liable for any such loss, damage or claim incurred by reason of such Manager's willful misconduct. To the full. extent permitted by applicable law, a Manager shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Manager by reason of any act or omission performed or omitted by such Manager in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Manager by this Agreement, except that no Manager shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Manager by reason of willful misconduct with respect to such acts or omissions; provided, however , that any indemnity under this Section 17 shall be provided out of and to the extent of Company assets only, and the Member shall have no personal liability on account thereof.

18. Assignments . The Member may assign in whole or in part its interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 18, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the Member shall cease to be a member of the Company.

19. Resignation . The Member may resign from the Company; provided, however, that in the event of such resignation an additional member of the Company shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the Member's resignation, and, immediately following such admission, the Member shall cease to be a member of the Company.

20. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

21. Dissolution .

(a) The Company shall have a perpetual existence; provided, however, that the Company shall dissolve, and its affairs shall be wound up, upon the occurrence of either of the following: (i) the written consent of the Member, or (ii) the retirement, resignation or dissolution of the Member or the occurrence of any other event which terminates the continued membership of the Member in the Company unless the business of the Company is continued in a manner permitted by the Act.

(c) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of thee assets o f the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

22. Separability of Provisions. Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.

23. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

25. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound thereby, has duly executed this Agreement as of the 26 ^th day of April , 2000.

ENERGY AND TELECOMMUNICATIONS SERVICES, L.L.C.

By:   /s/ STEVEN M. SCHERER
        Steven M. Scherer
        President and Chief Executive Officer

SCHEDULE A

SEVERN CONSTRUCTION, L.L.C.

LIMITED LIABILITY COMPANY AGREEMENT

Name

Mailing Address

Agreed Value of Capital Contribution

Percentage Interest

Energy and Telecommunications Services, L.L.C.

1801 K Street, N.W
Suite 900
Washington, D.C. 20006

$1,000

100%

     STATE OF DELAWARE
    SECRETARY OF STATE
DIVISION OF CORPORATIONS
  FILED 09:00 AM 04/26/2000
       001212448 - 3218646

CERTIFICATE OF FORMATION

SEVERN CONSTRUCTION, L.L.C.

FIRST: The name of the limited liability company (hereinafter called the "limited liability company") is Seven Construction, L.L.C.

Executed on April 26, 2000.

/s/ ELLEN D'ALELIO
Ellen d'Alelio
Authorized Person

CERTIFICATE OF FORMATION OF
1. The name of the limited liability company is Starpower Communications, LLC.
2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the city of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.
3. This Certificate of Formation shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of Starpower Communications, LLC this 27 ^th of October, 1997.
	STARPOWER COMMUNICATIONS, llc By: /s/ Michael J. Mahoney Name: Michael J. Mahoney

BY-LAWS OF

Pepco Building Services Newco, Inc.
(a Delaware Corporation)

May 19 , 2000

PEPCO BUILDING SERVICES NEWCO, INC.

BY-LAWS

ARTICLE I

OFFICES

ARTICLE II

MEETING OF STOCKHOLDERS

ARTICLE III

DIRECTORS

ARTICLE IV

INDEMNIFICATION

ARTICLE V

OFFICERS

ARTICLE VI

CERTIFICATES OF STOCK

            Section 1.       The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

            Section 2.       The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

            Section 3.       No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

ARTICLE VII

CHECKS, NOTES, CONTRACTS, ETC.

            All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature, or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

            All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

            Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

ARTICLE VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January of each year and shall end on the thirty-first day of December of such year.

ARTICLE IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF AMENDMENT to CERTIFICATE OF INCORPORATION of PEPCO BUILDING SERVICES NEWCO, INC. (a Delaware corporation) Pursuant to Section 242 of the General Corporation Law of Delaware
It is hereby certified that: FIRST: In accordance with Section 141(f) and 242 of the Delaware General Corporation Law (the "DGCL"), the Board of Directors of Pepco Building Services Newco, Inc. (the "Corporation") on January 2, 2001, adopted a resolution to amend the Certificate of Incorporation of the Corporation as described herein. Such amendment was declared advisable and the sole stockholder was directed to consider the amendment. SECOND: In accordance with Section 228 and 242 of the DGCL, the amendment of the Corporation's Certificate of Incorporation was duly approved by the sole stockholder of the Corporation on January 2, 2001. THIRD: The Certificate of Incorporation of the Corporation is hereby amended by striking out in its entirety ARTICLE FIRST and substituting the following:
	"FIRST: The name of the corporation is Substation Test Co. (hereinafter the "Corporation")."
IN WITNESS WHEREOF, Pepco Building Services Newco, Inc. has caused this Certificate to be signed in its name and on its behalf by its President this 2nd day of January, 2001, and its President acknowledges that this Certificate is the corporate act of the Corporation and that, to the best of his knowledge, information and belief, the matters and facts set forth herein are true in all material respects.
		PEPCO BUILDING SERVICES NEWCO, INC. By: Robert Aylward Robert Aylward, President

CERTIFICATE OF INCORPORATION OF PEPCO BUILDING SERVICES NEWCO, INC.
For the purpose of organizing a corporation for conducting the business and promoting the purposes hereinafter stated under the provisions, and subject to the requirements, of the General Corporation law of the State of Delaware, the undersigned, a natural person, hereby certifies that: FIRST: The name of the corporation is Pepco Building Services Newco, Inc. (hereinafter the "Corporation"). SECOND: The address, including street, number, city and county of the registered office of the Corporation in the State of Delaware is c/o Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805-1297. The name of the registered agent of the Corporation at such address is Corporation Service Company, in the county of New Castle. THIRD: The Corporation is organized under the General Corporation Law of the State of Delaware for the purposes of engaging in any unlawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The duration of the Corporation shall be perpetual. FIFTH: The Corporation has authority to issue a total of one thousand (1,000) shares of common stock, all of one class, having a par value of one dollar ($1.00) per share, for a total authorized par value capital of one thousand dollars ($1,000). SIXTH: The name and mailing address of the incorporator of the Corporation are as follows:
	Name Robert D. Earle	Mailing Address Whiteford, Taylor & Preston, L.L.P. 7 St. Paul Street, Suite 1400 Baltimore, Maryland 21202
The powers of the incorporator will terminate upon filing of this Certificate of Incorporation.
SEVENTH: The number of directors of the Corporation shall be set forth in the by-laws of the Corporation. The Board of Directors is authorized to make, alter or repeal the by-laws of the Corporation. The Board of Directors may be elected by other than written ballot. The names and mailing address of the persons who are to serve as directors of the Corporation until the first annual meeting of stockholders or until their successors are elected and qualify are as follows:
	Name	Mailing Address
	E. R. Mayberry	2000 K Street, N. W., Suite 750 Washington, D.C. 20006
	William Shapiro	2000 K Street, N. W., Suite 750 Washington, D.C. 20006
	Robert Aylward	6925L Oakland Mills Road Columbia, Maryland 21045
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders, any court of equitable jurisdiction within the State of Delaware may, on application of any receiver or receivers appointed for the Corporation under the provision of Section 291 of General Corporation Law of the State of Delaware, or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware, order a meeting of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing at least three-fourths in value of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders, of the Corporation, as the case may be, and also on the Corporation. NINTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, and all such liability is hereby eliminated; provided, however, that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. TENTH: The Corporation, by action of its board of directors, shall indemnify any person who was or is a director, officer, agent and/or employee of the Corporation to the fullest extent allowed under Section 145 of the General Corporation Law of the State of Delaware from and against any and all of the expenses, liabilities, or other matters referred to in or covered by such Section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action by such person in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the heirs, executors and administrators of such a person. ELEVENTH: The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware regarding business combinations with interested stockholders. TWELFTH: Any amendment of this Certificate of Incorporation shall be made and effected only in the manner set forth herein. The board of directors shall adopt a resolution, by affirmative vote of at least two-thirds (2/3) of the directors then in office, at a meeting called for that purpose, setting forth the proposed amendment, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration of such amendment or directing that the proposed amendment be considered at the next annual meeting of stockholders. In order to be adopted, each proposed amendment to this Certificate of Incorporation must be approved by the affirmative vote of a majority of the outstanding shares of each class and series, if any, entitled to vote thereon. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 18 ^th day of May, 2001.
			/s/ Robert D. Earle Robert D. Earle, Incorporator

		STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 01:00 PM 05/03/2001 010214140 - 3387855
CERTIFICATE OF INCORPORATION OF PEPCO UNI NEWCO, INC.
For the purpose of organizing a corporation for conducting the business and promoting the purposes hereinafter stated under the provisions, and subject to the requirements, of the General Corporation law of the State of Delaware, the undersigned, a natural person, hereby certifies that: FIRST: The name of the corporation is Pepco Uni Newco. Inc. (hereinafter the "Corporation"). SECOND: The address, inc1uding street, number, city and county of the registered office of the Corporation in the State of Delaware is c/o Corporation Service Company, 2711 CenterviI1e Road, Wilmington, Delaware 19808. The name of the registered agent of the Corporation at such address is Corporation Service Company, in the county of New Castle. THIRD: The Corporation is organized under the General Corporation Law of the State of Delaware for the purposes of engaging in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The duration of the Corporation shall be perpetual. FIFTH: The Corporation has authority to issue a total of one thousand (1.000) shares of common stock, all of one class, having a par value of one dollar ($1.00) per share. for a total authorized par value capital of one thousand dollars ($1.000). SIXTH: The name and mailing address of the incorporator of the Corporation are as follows:
	Name Robert D. Earle	Mailing Address \Vhiteford. Taylor & Preston L.L.P. 7 St. Paul Street, Suite 1400 Baltimore, Maryland 21202
The powers of the incorporator will terminate upon filing of this Certificate of Incorporation. SEVENTH: The number of directors of the Corporation shall be set forth in the by-laws of the Corporation, which number may be increased or decreased pursuant to the by-laws of the Corporation. The Board of Directors is authorized to make. alter or repeal the by-laws of the Corporation. The Board of Directors may be elected by other than written ba1lot. The names and mailing address of the persons who are to serve as directors of the Corporation until the first annual meeting of stockholders or until their successors are elected and qualify are as follows:
	Name E.R. Mayberry William Shapiro Robert Aylward	Mailing Address 2000 K Street, N.W., Suite 750 Washington, D.C. 20006 2000 K Street, N.W., Suite 750 Washington, D.C. 20006 3220 Corporate Court, Suite A Ellicott City, Maryland 21042
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for the Corporation under the provision of Section 291 of General Corporation Law of the State of Delaware, or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware, order a meeting of the creditors or class of creditors. and/or of the stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing at least three-fourths in value of the creditors or class of creditors, and/or of the stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors. and/or on all the stockholders. of the Corporation, as the case may be, and also on the Corporation. NINTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. and all such liability is hereby eliminated; provided, however, that the foregoing shall not eliminate or limit the liability of a. director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (ill) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. TENTH: The Corporation, by action of its board of directors. shall indemnify any person who was or is a director. officer, agent and/or employee of the Corporation to the fullest extent allowed under Section 145 of the General Corporation Law of the State of De1awarc from and against any and all of the expenses, liabilities, or other matters referred to in or covered by such Section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which. those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise.,both as to action by such person in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer. agent or employee and shall inure to the benefit of the heirs, executors and administrators of such a person. ELEVENTH: The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware regarding business combinations with interested stockholders TWELFTH: Any amendment of this Certificate of Incorporation shall be made and effected only in the manner set forth herein. The board of directors shall adopt a resolution, by affirmative vote of at least two-thirds (2/3) of the directors then in office, at a meeting called for. that purpose, setting forth the proposed amendment, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration of such amendment or directing that the proposed amendment be considered at the next annual meeting of stockholders. In order to be adopted, each proposed amendment to this Certificate of Incorporation must be approved by the affirmative vote of a majority of the outstanding shares of each class and series, if any, entitled to vote thereon I, THE UNDERSIGNED. being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 3 ^rd day of May, 2001
		/s/ Robert D. Earle Robert D. Earle, Incorporator

CERTIFICATE OF AMENDMENT to CERTIFICATE OF INCORPORATION of PEPCO UNI NEWCO, INC. (a Delaware corporation) Pursuant to Section 242 of the General Corporation Law of Delaware
It is hereby certified that: FIRST: In accordance with Section 141(f) and 242 of the Delaware General Corporation Law (the "DGCL"), .the Board"' of Directors of Pepco Uni Newco, Inc. (the "Corporation") on August 17, 2001, adopted a resolution to amend the Certificate of Incorporation of the Corporation as described herein. Such amendment was declared advisable and the sole stockholder was directed to consider the amendment SECOND: In accordance with Section 228 and 242 of the DGCL, the amendment of the Corporation's Certificate of Incorporation was duly approved by the sole stockholder of the Corporation on August 11. 2001. THIRD: The Certificate of Incorporation of the Corporation is hereby amended by striking out in its entirety ARTICLE FIRST and substituting the following:
	"FIRST: The name of the corporation is Unitemp, Inc. (hereinafter the "Corporation")."
IN WITNESS WHEREOF, Pepco Uni Newco, Inc. has caused this Certificate to be signed in its name and on its behalf by its President this 17 ^th day of August, 2001, and its President acknowledges that this Certificate is the corporate act of the Corporation and that, to the best of his knowledge, information and belief, the matters and facts set forth herein are true in all material respects.
		PEPCO UNI NEWCO, INC. By: /s/ Robert Aylward Robert Aylwarrd, President

BY-LAWS

OF

Pepco Uni Newco, Inc.
(a Delaware Corporation)

May.4, 2001

PEPCO UNI NEWCO, INC.

BY-LAWS

ARTICLE I

OFFICES

Section 1. The registered office of PEPCO UNI NEWCO, INC. (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 2. A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a stockholder or stockholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

Section 3. Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the stockholders of the Corporation or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the stockholders.

ARTICLE III

DIRECTORS

Section 2. A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present sha1l, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

Section 3. (a) Any director may resign at any time by giving written notice of his or her resignation to the Board. Such resignation shall take effect at the time specified therein or, if the

time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

(b) Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the stockholders pursuant to Section 3 of Article II hereof.

(b) Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

(c) The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him or her at his or her residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him or her at such place by telegraph, cable wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be

held. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

Section 5. The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of stockholders. He or she shall preside at meetings of the Board and of the stockholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He or she shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he or she shall be ex-officio a member of all committees of the Board.

Section 6. Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writing are filed with the minutes of the proceedings of the Board or committee.

Section 9. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the fullest extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or. is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination., in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the fullest extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him or her. To the fullest extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification: The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner .and to the fullest extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

ARTICLE V

OFFICERS

Section 2. The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any,. of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

Section 3. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each "have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

ARTICLE VI

CERTIFICATES OF STOCK

Section 2. The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

ARTICLE VII

CHECKS, NOTES, CONTRACTS , ETC.

Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall sign in more than one capacity.

ARTICLE VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January and shall end on ,the thirty-first day of December of such year.

ARTICLE IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

BY-LAWS

OF

W.A. Chester Corporation
(a Delaware Corporation)

January 30, 2001

W.A. CHESTER CORPORATION

BY-LAWS

Article I

OFFICES

Section 1. The registered office of W.A. Chester Corporation (hereinafter called the "Corporation") shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. The Corporation may also have offices at other places both within and without the State of Delaware.

Article II

MEETING OF SHAREHOLDERS

          Section 1.      The annual meeting of the shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (hereinafter called the "Board") and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware to be taken at a shareholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 3 of this Article.

          Section 2.      A special meeting of the shareholders for any purpose or purposes may be called by the Board, the Chairman of the Board or the President of the Corporation or a shareholder or shareholders holding of record at least a majority of the shares of Common Stock of the Corporation issued and outstanding, such meeting to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

          Section 3.      Any action required by the laws of the State of Delaware to be taken at any annual or special meeting of the shareholders of the Corporation or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing; setting forth the action so taken, shall be signed by all the shareholders.

Article III

DIRECTORS

          Section 1.      The Board of Directors of the Corporation shall consist of not less than one and not more than six persons. The Directors need not be shareholders. Each Director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided.

          Section 2.      A majority of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall, except as otherwise provided by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, be the acts of the Board of Directors.

          Section 3.       (a)      Any director may resign at any time by giving written notice of his resignation to the Board. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

                               (b)      Any director or the entire Board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the shareholders pursuant to Section 3 of Article II hereof.

                               (c)      Vacancies in the Board and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

          Section 4.       (a)      As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section of this Article.

                               (b)      Other meetings of the Board shall be held at such times and places as the Board, the Chairman of the Board or the President shall from time to time determine.

                               (c)      The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

                               (d)      The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

          Section 5.      The Chairman of the Board may be elected from among the members of the Board at its organization meeting and following each annual meeting of shareholders. He shall preside at meetings of the Board and of the shareholders, and shall give counsel and advice to the Board and the officers of the Corporation on all subjects touching the welfare of the Corporation and the conduct of its business. He shall perform such other duties as the Board may from time to time determine. Except as otherwise provided by resolution of the Board, he shall be ex-officio a member of all committees of the Board.

          Section 6.      Action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

          Section 7.      Any one or more members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

          Section 8.      The Board of Directors may, by resolution or resolutions adopted by not less than the number of directors necessary to constitute a quorum of the Board, designate one or more committees, each such committee to consist of such number of directors as the Board may from time to time determine, which, to the extent provided in said resolution or resolutions, shall have and may exercise such limited authority as the Board may authorize. Such committee or committees shall have such name or names as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority, or such other number as the Board may designate, of the members of any such committee shall constitute a quorum. Each such committee may make rules for the conduct of its business and fix the time and place of its meetings unless the Board shall otherwise provide.

          Section 9.      Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

INDEMNIFICATION

With respect to a Corporation officer, director or employee, the Corporation shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any' threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Corporation may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability, which may be asserted against him. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorney's fees), judgments, frees and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Corporation in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person in the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Corporation, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the' Corporation and each director, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

Article V

OFFICERS

          Section 1.      Board of Directors, as soon as reasonably practicable after the initial election of directors by shareholders in each year, shall elect a President and a Secretary, and from time to time may elect one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant Treasurers and other officers, and appoint such other agents, as it may deem desirable. Any two or more offices may be held by the same person.

          Section 2.      The term of office of all officers shall be until the next succeeding annual election of officers and until their respective successors shall have been elected and qualified; but any officer or agent elected or appointed by the Board of Directors may be removed, with or without cause, by the affirmative vote of a majority of the members of the Board whenever in their judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

          Section 3.      Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such authority and perform such duties in the management of the property, business and affairs of the Corporation as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Board of Directors.

Article VI

CERTIFICATES OF STOCK

          Section 1.      The shares of the capital stock of the Corporation shall be evidenced by certificates, in such form as the Board of Directors may from time to time prescribe. Such certificates shall be signed by the Chairman of the Board, the President, or a Vice President and by the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. In case any officer who has signed any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to hold such office at the time of its issue.

          Section 2.      The shares of the capital stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender and cancellation of the certificates evidencing such shares, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require.

          Section 3.      No certificate evidencing shares of the capital stock of the Corporation shall be issued in place of any certificate alleged to have been' lost, stolen, or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon such indemnification of the Corporation and its agents by such person or persons and in such manner, as the Board of Directors may from time to time prescribe.

Article VII

CHECKS, NOTES, CONTRACTS, ETC.

          All checks and drafts on the Corporation's bank accounts, bills of exchange, promissory notes, acceptances, obligations, other instruments for the payment of money, and endorsements other than for deposit in a bank account of the Corporation shall be signed by the Secretary or Treasurer and shall be countersigned by the President or a Vice President, unless otherwise authorized by the Board of Directors; provided that checks drawn on the Corporation's dividend and/or special accounts may bear the manual signature; or the facsimile signature, affixed thereto by a mechanical device, of such officer or agent as the Board of Directors shall authorize.

          All contracts, bonds and other agreements and undertakings of the Corporation shall be executed by the President, a Vice President, the Secretary or the Treasurer and by such other officer or officers, if any, as may be designated, from time to time, by the Board of Directors and, in the case of any such document required to be under seal, the corporate seal shall be affixed thereto and attested by the Secretary or an Assistant Secretary.

          Whenever any instrument is required by this Article to be signed by more than one officer of the Corporation, no person shall so sign in more than one capacity.

Article VIII

FISCAL YEAR

The fiscal year of the Corporation shall begin on-the first day of January of each year and shall end on the thirty-first day of December following.

Article IX

AMENDMENTS

Any By-Law (including these By-Laws) may be adopted, amended or repealed by the Board in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation.

CERTIFICATE OF INCORPORATION OF W.A. CHESTER CORPORATION
The undersigned, for the purposes of forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:
ARTICLE I
The name of the corporation is W.A. Chester Corporation.
ARTICLE II
The address of its registered office in the State of Delaware is 2711 Centerville Road, Wilmington, County of New Castle, DE 19808. The name of its registered agent at such address is Corporation Service Company, at Suite 400.
ARTICLE III
To engage in any business approved by the Board of Directors for which corporations may be organized under the General Corporation Law of Delaware.
ARTICLE IV
The Corporation shall have authority to issue one thousand (1,000) shares of capital stock all of which shall be shares of Common Stock, and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00).
ARTICLE V
The name and mailing address of the incorporator is as follows: NAME MAILING ADDRESS Jeremie P. Mann 1801 K Street NW, Suite 900 Washington, D.C. 20006
ARTICLE VI
Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.
ARTICLE VII
The Corporation is to have perpetual existence.
ARTICLE VIII
In furtherance and not in limitation of the power conferred by statute, the Board of Directors shall have the power to adopt, amend, alter and repeal the By-Laws of the Corporation.
ARTICLE IX
Meetings of stockholders may be held within or without the State of Delaware. The books of the Corporation may be kept (subject to any provision contained in the Delaware statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
ARTICLE XI
No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) or any transaction from which the director derived an improper personal benefit.
ARTICLE XII
The Corporation may indemnify and advance expenses to each director and each officer and any employee or agent of the Corporation and their respective heirs, administrators and executors, against all liabilities and expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer, employee or agent of the Corporation, to the full extent permitted by the laws of the State of Delaware now existing or as such laws may hereafter be amended. I, THE UNDERSIGNED, being the incorporator hereinbefore named, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 29th day of January, 2001.
	/s/ Jeremie P. Mann Jeremie P. Mann Incorporator

CERTIFICATE OF AMENDMENT OF W.A. CHESTER MARYLAND, L.L.C. A LIMITED LIABILITY COMPANY
FIRST: The name of the limited liability company is: W.A. CHESTER MARYLAND, L.L.C. SECOND: Article FIRST of the Certificate of Formation of the limited liability company is hereby amended to read as follows: FIRST: The name of the limited liability company is W.A. Chester, L.L.C. IN WITNESS WHEREOF, the undersigned, has executed, signed and acknowledged this Certificate of Amendment this 5 ^th day of January, 1996.
	/s/ John D. McCallum John D. McCallum Authorized Person

CERTIFICATE OF FORMATION OF W.A. CHESTER MARYLAND, L.L.C. A LIMITED LIABILITY COMPANY
FIRST: The name of the limited liability company is:
W.A. CHESTER MARYLAND, L.L.C.
SECOND: The address of its registered office in the State of Delaware is 1013 Centre Road, Wilmington, Delaware, 19805, and its registered agent is The Prentice-Hall Corporation System, Inc. IN WITNESS WHEREOF, the undersigned, being the individual forming the Company, has executed, signed and acknowledged this Certificate of Formation this 12 ^th day of December, A.D. 1995.
	/s/ JOHN D. McCALLUM John D. McCallum Authorized Person

OPERATING AGREEMENT OF W.A. CHESTER, L.L.C.
This Operating Agreement (this "Agreement") of W.A. Chester, L.L.C. (the "Company), is hereby amended and entered into by Pepco Enterprises, Inc., a Delaware corporation (the "Member"). Pepco Enterprises, Inc. is the sole member of the Company following (i) the merger on March 13, 2000 of Cove Point Energy Company-into Pepco Energy Company, and (ii) the Change of Name of Pepco Energy Company to Penink, Inc. on April 26, 2000 and the subsequent merger of Penink, Inc. into Pepco Enterprises, Inc. on April 27, 2000.)
ARTICLE I Company Formation and Registered Agent
1.1 FORMATION. The Company was organized as a Delaware limited liability company pursuant to the Delaware Limited Liability Company Act, 6 Del. Code Sections 18-101 et seq ., as amended from time to time, and any successor statute (the "Act"). A Certificate of Formation has been executed, acknowledged and filed with the Secretary of State on December 13, 1995. 1.2 NAME. The name of the Company is W.A. Chester, L.L.C. 1.3 REGISTERED OFFICE AND AGENT. The address of its registered office in the State of Delaware is: 1013 Centre Road, Wilmington, DE 19805, and its registered agent is Corporation Services Company. 1.4 TERM. The Company shall continue until dissolved with the following exceptions:
		(a)	A vote for dissolution by the Member; or
		(b)	Any event which makes it unlawful for the business of the company to be carried on by the Member; or
		(c)	The dissolution, resignation, bankruptcy or retirement of the Member or the occurrence of any other event that terminates the continued membership of the Member under the Act; or
		(d)	Any other event causing a dissolution of a limited liability company under the Act.
1.5 BUSINESS PURPOSE. The purpose of the Company is to engage in any lawful activity permitted under the Act and any activities incidental or related thereto. 1.6 PRINCIPAL PLACE OF BUSINESS. The location of the principal place of business of the Company is 1801 K Street, N.W., Suite 900, Washington, D.C. 20006 or such other location as the Management Committee may decide from time to time. 1.7 THE MEMBER. The name and place of business of the Member is contained in Exhibit A attached to this Agreement.
ARTICLE II Capital Contributions
2.1 INITIAL CONTRIBUTION. The Member shall contribute to the Company capital in immediately available funds in the amounts described in Exhibit A attached to this Agreement. 2.2 ADDITIONAL CONTRIBUTIONS. The Member is not obligated to make any additional contribution to the Company's capital until it is so decided by a majority of the Management Committee.
ARTICLE III Profits, Losses and Distributions
3.1 PROFITS/LOSSES. All items of Company income, gain, loss and deduction shall be allocated to the Member, and shall be credited or debited to its respective capital accounts in accordance with Treasury Regulations section 1.704-1 (b)(2)(iv), so as to ensure to the maximum extent possible that such allocations satisfy the economic effect equivalence test of Treasury Regulations section 1.704-1 (b)(2)(ii)(i) and that all allocations of items that cannot have economic effect (including credits and nonrecourse deductions) are allocated to the Member in accordance with the Member's interests in the Company. 3.2 DISTRIBUTIONS. The Management Committee shall determine the amount and timing of all distributions of net cash of the Company available after appropriate provision for expenses and liabilities. All distributions shall be made in proportion to the Member's Membership Interest in the Company as set forth in Exhibit A as such Exhibit may be amended from time to time.
ARTICLE IV Management and Indemnification
4.1 ACTIONS BY MEMBER (a) Except as otherwise set forth herein, all decisions, consents, approvals and actions of the Member regarding the Company, its operations and affairs shall require the affirmative vote of the Management Committee. Any decision, consent, approval or action shall be effective immediately upon the affirmative vote of the Management Committee as set forth in this Section 4.1, provided that the Chairman of the Management Committee gives each Manager entitled to vote on such matter at least two (2) business days' prior written notice of such vote (specifying in reasonable detail the matter to be voted on and basis for undertaking such matter), and shall not be conditioned upon there being a meeting, a quorum or any other procedure or prerequisite. (b) Meetings of the Management Committee may be held via conference telephone call, in person or in person with any number of Managers participating by conference telephone call. The Chairman of the Management Committee, on his or her own initiative or at the request of any Manager, shall call meetings of Managers for any purpose. The Secretary shall give notice to each Manager of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be given to each Manager at the address set out in Exhibit A hereto, as amended from time to time, at least two days before the day on which such meeting is to be held, or shall be sent to Managers at such address by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the person entitled thereto whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. Each Manager may designate an individual to act as the Manager's Representative at a meeting of the Management Committee. Each Manager may change such designation at any time upon written notice to all other Managers and to the Chairman of the Management Committee. 4.2 BOARD OF MANAGERS (a) The business and affairs of the Company shall be managed by a Management Committee, which shall have full, exclusive and complete discretion to manage and control the business and affairs of the Company, and to take such action as it deems necessary or appropriate in connection therewith. (b) The number of individuals constituting the Management Committee shall be four (4). Each such person (a "Manager") shall hold office until his or her successor shall have been elected and qualified. Managers need not be a Member of the Company. (c) The Management Committee shall be selected by the Chairman. The persons set forth below are hereby appointed as the initial Management Committee:
	Steven M. Scherer, Chairman John H. Wilson, Jr., Vice Chairman Robert L. Thompson, Jr. Richard P. Battista
(d) A majority of the Managers fixed by Section 4.2(b) (present in person or by teleconference) shall constitute a quorum for the transaction of business at any meeting of the Management Committee. The act of the majority of Managers present at a meeting at which a quorum is present shall be the act of the Management Committee. (e) Any action required to be taken at a meeting of the Management Committee may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers. (f) Each Manager shall be an "authorized person" as defined in the Act and is authorized to execute or file a document required or permitted to be filed on behalf of the Company. 4.3 OFFICERS (a) The Chairman and the Vice Chairman of the Management Committee shall have the power and authority to execute on behalf of the Company, and obligate the Company to perform, any contracts, agreements and other documents and instruments specifically approved by the Board. The Vice Chairman shall perform the duties of the Chairman at the request of the Chairman, or upon the refusal or inability of the Chairman to perform such responsibilities. (b) The Management Committee may, from time to time, appoint such other Company officials as the Management Committee deems necessary or appropriate. Such Company officials shall at all times serve under the supervision and at the pleasure of the Management Committee, and shall each have such authority and perform such duties in the management of the property, business and affairs of the Company as by custom generally pertain to their respective offices, as well as such authority and duties as from time to time may be conferred by the Management Committee. 4.4 RECORDS AND ACCESS TO RECORDS (a) At all times during the term of the Company, the Management Committee shall keep or cause to be kept full and true books of account maintained in accordance with United States generally accepted accounting principles as in effect from time to time ("GAAP") in which shall be entered fully and accurately each transaction of the Company. Such books of account, together with a copy of this Agreement and of the Certificate, shall at all times be maintained at the principal place of business of the Company (or such other location(s) approved by the Management Committee from time to time) and shall be open to inspection and examination at reasonable times by the Member and its duly authorized representatives for any purpose reasonably related to such Member interests. (b) For purposes of making allocations and distributions hereunder (including, without limitation, distributions in liquidation of the Company in accordance with capital account balances as required in Section 3.1, capital accounts and profits, losses and other items described in Section 3.1 shall be determined in accordance with federal income tax accounting principles, utilizing the accrual method of accounting, with the adjustments required by Treasury Regulations section 1.704(b) to properly maintain capital accounts. The Member acknowledges that the capital account balance of the Member for the purposes described in the preceding sentence are not computed in accordance with generally accepted accounting principles GAAP and accordingly that any GAAP financial statements for the Company do not reflect their true capital account balances for purposes of determining allocations and making liquidating distributions to the Member hereunder. 4.5 FINANCIAL STATEMENTS. The Management Committee shall prepare and maintain, or cause to be prepared and maintained, the books of account of the Company and the following financial statements, unless otherwise approved by the Management Committee: (a) balance sheet of the Company as of the close of each month, fiscal quarter and taxable year; (b) statement of the Company profits and losses for each taxable year; (c) statement of cash flow for the Company for each taxable year; (d) statement of the Member's capital account as of the close of each taxable year, and changes therein during such year; and (e) a statement of the Member' s share of each item of Company income, gain, loss, deduction, or credit for each taxable year for income tax purposes. Except as contemplated by Section 4.4, such financial statements shall be prepared in accordance with GAAP, consistently applied, subject to normal year-end adjustments and the absence of notes. 4.6 BANK OR BROKERAGE ACCOUNTS; CONTRACTS. All funds of the Company shall be deposited in the Company's name in such bank or brokerage account or accounts as shall be designated by the Management Committee. Any expenditure or commitment (including service and customer contracts) in excess of Two Million Dollars ($2,000,000) shall require the approval of at least two members of the Management Committee. All contracts, bonds and other agreements and undertakings of the Company shall be executed by the Vice Chairman, Chief Executive Officer, President, a Vice President, the Secretary or the Controller and by such other officer or officers, if any, as may be designated, from time to time, by the Management Committee. Whenever any instrument is required hereunder to be signed by more than one officer of the Company, no person shall so sign in more than one capacity. 4.7 RIGHT TO MAKE SECTION 754 ELECTION. The Management Committee may, at its sole discretion, make or revoke, on behalf of the Company, an election in accordance with section 754 of the Code, so as to adjust the basis of Company property in the case of a distribution of property within the meaning of section 734 of the Code, and in the case of an assignment of Membership Interest within the meaning of section 743 of the Code. The Member shall, upon request of the Management Committee, supply the information necessary to give effect to such an election. 4.8 TAX MATTERS PARTNER (a) Designation. Pepco Enterprises, Inc. is hereby designated as the initial "Tax Matters Partner" (the "TMP"), of the Company as defined in section 623l(a)(7) of the Code and, in such capacity, shall have the power subject to Section 4.8(d) below to manage and control, on behalf of the Company, any administrative proceeding at the Company level with the IRS relating to the determination of any item of Company income, gain, loss, deduction or credit for federal income tax purposes. The TMP shall use its best efforts to comply with the responsibilities (including, without limitation, the making of elections and preparing of returns) outlined in this Section 4.8 and in sections 6622 through 6231 and 6050K of the Code and in doing so shall incur no liability, provided, that such efforts are undertaken in good faith and in a manner that the TMP believes to be in the best interest of the Company. (b) IRS Notices. The TMP shall, within thirty (30) days after the TMP's receipt of any notice from the IRS in any administrative proceeding at the Company level relating to the determination of any Company items of income, gain, loss, deduction or credit, give or mail a copy of such notice to the Company. (c) New Tax Matters Partners. The TMP shall be subject to re-appointment each year. The Member may at any time hereafter designate a new TMP; provided, however, that the TMP for a given taxable year continue as TP with respect to all matters concerning such year. (d) No Discretion. Unless otherwise expressly provided in this Agreement, or required by the Code or Regulations the TMP shall act (or refrain from acting) on behalf of the Company in accordance with the directions of the Management Committee, and shall-make no election, declaration or statement, settle or compromise any audit matter or dispute, or execute or file any tax return, tax filing or other document on behalf of the Company without the prior approval of the Management Committee. (e) Income Tax compliance and Capital Accounts. The TMP shall prepare or cause to be prepared and filed, when and as required by applicable law, all federal, state and local income tax information returns or requests for extensions thereof. Not less than thirty (30) days prior to the due date (including extensions) for any return (but not later than August 15 of each year), the TMP shall submit a copy of the return as proposed for review and a schedule showing the Member's allocable share of Company tax attributes ("Tax Attributes") sufficient to allow the Member to include such Tax Attributes in its federal income tax return. (f) Tax Elections. The TMP shall make the following tax elections on behalf of the Company: (i) Unless required to adopt a different taxable year pursuant to section 706(b) of the Code, adopt the calendar year as the annual accounting period; (ii) Adopt the accrual method of accounting; (iii) Deduct interest expense and taxes attributable to the construction or installation of real and personal property improvements to the fullest extent permitted by the Code; (iv) Compute the allowance for depreciation under the most accelerated tax depreciation method and using the shortest life and lowest salvage value authorized by applicable law, with respect to all depreciable assets; (v) If allowed by the Code, and to the maximum extent allowable, elect to take available investment tax credit on the full basis of each asset; and (vi) Make such other elections as the TMP shall have been directed in writing by the Management Committee to make. The requirement to make any of the elections set forth above is predicated upon the assumption that current federal income tax law will continue in force. If any legislative change is made in the Code or any other tax statutes or by the IRS in regulations and other pronouncements or by the courts in ease law affecting any of such elections so as to materially alter the economic result of the required election, the TMP shall make such election in respect of the item so affected as directed by the Management committee; provided, however, that such election shall be made in a manner consistent with the best interests of the Member. Prior to making any change in the tax elections required above, the TMP shall give at least thirty (3) calendar days' written notice specifying such change. 4.9 INDEMNIFICATION AND EXCULPATION (a) With respect to a Company Manager, Member, officer or employee, the Company shall indemnify, in the manner and to the full extent permitted by law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, claim or proceeding (collectively, a "Suit"), whether or not by or in the right of the Company, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a Manager, Member, officer or employee of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Where required by law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that indemnification is proper in the circumstances. The Company may, to the full extent permitted by law, purchase and maintain insurance on behalf of any such person against any liability which may be asserted against him or her. To the full extent permitted by law, the indemnification provided herein shall include, but not be limited to, expenses (including attorneys' fees), judgments, fines and amounts paid in connection with the resolution of a Suit, whether as a result of (i) a final adjudication, (ii) settlement, (iii) summary judgment, (iv) dismissed counts or (v) otherwise. In the manner provided by law, any such expenses shall be paid by the Company in advance of the final disposition of such Suit and the repayment of such advancements will be required only if it shall ultimately be determined that the person who received such advance is not entitled to indemnification. The indemnification provided herein shall not be deemed to limit the right of the Company to indemnify any other person in .the manner and to the full extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Company may be entitled under agreement, vote of the Member or disinterested Managers or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. The provisions hereof shall be applicable to all Suits made or commenced after the date of incorporation of the Company, whether arising from acts or omissions to act occurring before or after such date. The provisions hereof shall be deemed to be a contract between the Company and each Manager, Member, officer or employee who serves in such capacity at any time while the provisions hereof and the relevant provisions of the laws of the State of Delaware and' other applicable law, if any, are in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any facts or any Suit then or theretofore existing, or any Suit thereafter brought or threatened based in whole or in part on any such facts. If any provision hereof shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof. (b) Notwithstanding any other term of the Agreement, whether express or implied, or obligation or duty at law or in equity, neither the Member, its affiliates, nor any of its respective Managers, officers, directors, shareholders, partners, employees, or agents or any other officer, employee, representative or agent of the company and its affiliates (individually, a "Covered Person" and collectively, the "Covered Persons") shall be liable to the Company or the Member for any act or omission (in relation to the Company or this Agreement) taken or omitted in good faith by a Covered Person and in the reasonable belief that such act or omission is in the best interests of the Company and is within the scope of authority granted to such Covered Person by this Agreement, provided that such act or omission does not constitute fraud, willful misconduct, bad faith or gross negligence. A Covered Person may rely and shall incur no liability in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, paper, document, signature or writing reasonably believed by it to be genuine, and may rely on a certificate signed by any officer of any Person in order to ascertain any fact with respect to such Person or within such Person's knowledge and may rely on an opinion of counsel reasonably selected by such Covered Person with respect to legal matters unless such Covered Person acts in bad faith. To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person. 4.10 FEES AND EXPENSES (a) Except as approved by the Board and as otherwise provided in subsection (b) below, no Member, Manager or officer of the Company shall be entitled to any fees or other compensation in connection with their acting in their capacities as such. (b) The Company shall reimburse each Manager and officer of the Company for all ordinary and reasonably necessary out-of-pocket expenses incurred with the approval of the Management Committee when acting in such capacity on behalf of the company, upon submission of proper receipts therefor. 4.11 NOMINEE. Title to the Company's assets shall be held in the Company's name or in the name of any nominee that the Management Committee may designate. The Management Committee shall have power to enter into a nominee agreement with any such person, and such agreement may contain provisions indemnifying the nominee, except for his or her willful misconduct.
ARTICLE V Transfers
5.1 ASSIGNMENT. The Member may not sell, assign or otherwise dispose of all or any part of its interest in the Company. SIGNED AND AGREED as of the 27th of April, 2000.
					W. A. CHESTER, L.L.C. /s/ Steven M. Scherer Steven M. Scherer, Chairman
EXHIBIT A W. A. CHESTER, L.L.C. MEMBER, CAPITAL COMMITMENT, AND MEMBERSHIP INTERESTS
Member				Initial Capital Contribution		Membership Interest
Pepco Enterprises, Inc. 1801 K Street, N. W. Suite 900 Washington, DC 20006				$1,000		100%