JOINT VENTURE AGREEMENT

          THIS JOINT VENTURE AGREEMENT (“Agreement”) is entered into as of June 16, 1999, by and among CHELSEA GCA REALTY PARTNERSHIP, L.P., a Delaware limited partnership (“Chelsea”), MITSUBISHI ESTATE CO., LTD., a Japanese corporation (“Mitsubishi”) and NISSHO IWAI CORPORATION, a Japanese corporation (“Nissho”). Mitsubishi, Nissho and Chelsea and any other persons or entities who shall in the future execute and deliver this Agreement pursuant to the provisions hereof shall hereinafter collectively be referred to as the “Parties” and individually as a “Party”.

          WHEREAS, the Parties desire to establish a company to develop, operate and own outlet malls in Japan, the base of which is to be premium brand apparel and general merchandise, subject to the terms and conditions hereof

          NOW, THEREFORE, in consideration of the foregoing, and of the covenants and agreements hereinafter set forth, it is hereby agreed as follows:

ARTICLE 1.
DEFINITIONS: APPENDICES

Section 1.1    Certain Definitions.

          Unless the context otherwise specifies or requires, capitalized terms used herein shall have the respective meanings assigned thereto as set forth below, for all purposes of this Agreement (such definitions to be equally applicable to both the singular and the plural forms of the terms defined).

Section 1.2    Other Definitions.

          In addition to the terms defined in Section 1. 1, other terms will have the definitions provided elsewhere in this Agreement.

Section 1.3    Appendices.

          Attached hereto and forming an integral part of this Agreement are various appendices, all of which are incorporated into this Agreement as fully as if the content thereof were set out in full herein at each point of reference thereto, it being understood that such appendices shall be applicable to Project 1, with substantially similar ones to be applicable to each additional Project.

Section 1.4    Party/Shareholder.

          For the purpose of this Agreement, if an Affiliate of a Party holds any Common Stock, such Party shall be deemed as Shareholder unless the context otherwise requires, while such Affiliate shall be also bound by the provisions of this Agreement by virtue of Section 5.2(a) or Section 10.2(d)(i) or otherwise.

ARTICLE 2.
FORMATION: NAME: PLACE OF BUSINESS

Section 2.1    Formation of Company.

          The Parties shall cause the organization, under the Laws of Japan, of a new stock corporation (Kabushiki-Kaisha) to be named “Chelsea Japan Co., Ltd.” in English and in Japanese (the “Company”) as soon as reasonably practicable after the execution of this Agreement. The Articles of Incorporation of the Company shall be in the form of Appendix A attached hereto.

Section 2.2    Place of Business.

          The location of the principal place of business of the Company shall be Chiyoda-ku, Tokyo, Japan, The Parties may hereafter change the principal place of business of the Company to such other place or places within Japan as may be Approved by the Parties. The Parties may establish and maintain such other offices and additional places of business of the Company, within Japan, as they deem appropriate.

ARTICLE 3.
PURPOSES AND POWERS OF COMPANY

Section 3.1    Purposes.

          Subject to the provisions of this Agreement, the purposes of the Company are limited and include only the following: investing in, acquiring, holding, owning, developing, operating, maintaining, improving, leasing, selling as a means of recovering the Parties’ investment and a profit thereon, exchanging and otherwise using any Project, for profit and as an investment, and doing any and all other acts or things which may be incidental or necessary to carry on the business of the Company as herein contemplated.

Section 3.2    Capacity.

          The Company shall have the capacity to do any and all acts and things necessary, appropriate, advisable, or convenient for the furtherance and accomplishment of the purposes of the Company, including, without limitation, to manage each Project, to engage in any kind of activity and to enter into and perform obligations of any kind necessary to or in connection with, or incidental to, the accomplishment of the purposes of the Company, so long as such activities and obligations may be lawfully engaged in or performed by a corporation under the Act.

Section 3.3    Limits of Company.

          (a) The relationship between and among the Parties shall be limited to carrying on the business of the Company in accordance with the terms of this Agreement.

          (b) The Parties shall each devote such time to the Company as is reasonably necessary to carry out the provisions of this Agreement. Each of the Parties understands that the other Parties or their Affiliates may be interested, directly or indirectly, in various other businesses and undertakings not included in the Company. Each Party also understands that the conduct of the business of the Company may involve business dealings with such other businesses or undertakings. The Parties hereby agree that the creation of the Company and the assumption by each of the Parties of their duties hereunder shall be without prejudice to their rights (or the rights of their Affiliates) to have such other interests and activities and to receive and enjoy profits or compensation therefrom, and except as otherwise expressly agreed in writing by the Parties, each Party waives any rights it might otherwise have to share or participate in such other interests or activities of the other Parties or their Affiliates, subject to the provisions of Section 4.2.

Section 3.4    No Individual Authority.

          No Party shall, without the express, prior written consent of the other Parties, take any action for or oil behalf of or in the name of the Company, or the other Parties, or assume, undertake or enter into any commitment, debt, duty or obligation binding upon the Company, except for (a) actions expressly provided for in this Agreement, (b) actions by any Party within the scope of such authority as may have been granted in this Agreement, and (c) actions Approved by the Parties. Any action taken in violation of the foregoing limitation shall be void. Each Party shall indemnify and hold harmless the other Parties from and against any and all claims, demands, losses, damages, liabilities, lawsuits and other proceedings, judgments and awards, and costs and expenses (including, but not limited to, reasonable attorneys’ fees and all court costs) arising directly or indirectly, in whole or in part, out of any breach of the foregoing provisions by such Party. This provision shall survive dissolution of the Company.

Section 3.5    Responsibility of Parties.

          (a) Except as set forth in Section 9.1 herein or for Project costs previously incurred by a Party which are reflected in the Development Budget to the extent permissible under applicable Japanese tax laws, the Company and each Party shall not be responsible or liable for any liability, indebtedness, or other obligation of any other Party incurred prior to, on the date of or after the execution of tills Agreement, except for those which are undertaken or incurred on behalf of the Company after the date of this Agreement under or pursuant to the terms of this Agreement, or Approved by the Parties, and each Party hereby indemnifies and agrees to hold the other Parties and the Company harmless from all such liabilities, obligations and indebtedness.

          (b) Each Party will notify the other Parties as quickly as reasonably possible upon receipt of any notice, (i) of the filing of any action in Law naming the Company or any Party as a party relating in any way to the business of the Company; (ii) of any actions to impose liens of any kind whatsoever or of the imposition of any lien whatsoever against the Company or its assets, including any Project; (iii) of any casualty, damage or injury to persons or property on or related to any Project; or (iv) of the default by the Company of any of its material obligations to creditors or other third parties. Each Party will endeavor to notify the other Parties verbally promptly upon learning of any of the foregoing actions, or the threat thereof, which, in such Party’s judgment, is material to the Company or the other Parties.

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES; COVENANTS

Section 4.1    Representations and Warranties.

          Each of the Parties represents and warrants to the other Parties as follows:

Section 4.2    Non-Compete.

          Each of the Parties agrees that for a period commencing on the date hereof and terminating two years after the termination of this Agreement, except as set forth in Section 5.8 it shall not directly or indirectly or through any Affiliate, participate or have any interest in, manage, finance, lease, operate, develop or control any outlet centers in Japan, provided, however, that Mitsubishi or Nissho may, from time to time, operate outlet shops as tenants and with the prior approval of Chelsea (which shall not be unreasonably withheld) include a small number of standalone outlet shops in an otherwise full price, discount or power retail center.

Section 4.3    Confidentiality.

          Each of the Parties shall insure that any information regarding the business, assets, Company, Projects, customers, and methods of the other or of the Company which it may learn in the course of negotiations for, or carrying out of, this Agreement is treated by it in strict confidence and shall not make use of or disclose such information, unless such information (a) is known to the Party prior to learning of it from the other, (b) is obtained by such Party from a source other than the other Party which source (i) did not require such Party to hold such secrets or information in confidence and (ii) did not limit or restrict such Party’s use thereof, (c) becomes public knowledge otherwise than through the fault of the Party seeking to use or disclose such knowledge or (d) is required to be disclosed by Law. This provision shall survive termination of this Agreement.

Section 4.4    Governmental Approval.

          Each Party agrees to use its best efforts to obtain from any local, prefectoral and national government in Japan (or any agency thereof) any and all appropriate formal or informal consents, validations, authorizations, licenses and other approvals, if any are required, with respect to this Agreement and the transactions contemplated hereby, including Chelsea’s investment in the Company.

Section 4.5    Establishment of SPC.

          At the request of any of the Parties made at any time, each Party agrees to use its best efforts, at the expense of the Company, to cause (a) the Company to establish a special purpose company (“SPC”) under Law or any other laws the Parties may agree upon and to take all steps necessary to effectuate such establishment as promptly as practicable or (b) each Project after the Project Completion Date of such Project to be transferred to a SPC.

ARTICLE 5.
CAPITAL

Section 5.1    Parties' Percentage Interest.

          (a) Percentage Interest.

          The Initial Percentage Interests of the Parties for purposes of applying the provisions of this Agreement are set forth below:

          The above Initial Percentage Interests are subject to adjustment only by agreement of all the Parties, by two Parties when the other Party shall be a Non-Funding Party or a Breaching Party, or as a result of operation of any provision of this Agreement, including Sections 5.8 or 5.9.

          (b) Initial Authorized Capital.

          The Company shall have a total authorized capital of 19,960 shares of Common Stock upon its incorporation. All the shares of Common Stock of the Company shall be equal and alike in all respects, each of which will have a face value of yen 50,000 per share, and the holders thereof shall be entitled to identical rights and privileges including, without limitation, identical rights and privileges with respect to dividends, voting power and distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company.

Section 5.2   Capital Contributions Upon Incorporation.

Section 5.3   Additional Funding.

Section 5.4    Calls for Partner Loan.

Section 5.5   Penalties to Non-Funding Party.

          Notwithstanding any other provision of this Agreement to the contrary, including without limitation Article 8 hereof, a Non-Funding Party shall suffer from the penalties set forth below; provided, however, that in the case where a Funding Loan is made pursuant to Section 5.4(e)(i) above, this provision shall apply when and only when the Funding Party shall have exercised the right granted under Section 5.4(e)(ii).

Section 5.6   No Interest on Capital.

          Interest earned oil Company funds shall inure solely to the benefit of the Company, and except as specifically provided hereinabove, no interest shall be paid upon any contributions or advances to the capital of the Company nor upon any undistributed or reinvested income or profits of the Company.

Section 5.7   Limit on Contributions and Obligations of Parties.

          Except as expressly provided in this Article 5, the Parties shall have no liability or obligation to the Company or to the other Parties (i) to make additional Capital Contributions to the Company, (ii) to make any Partner Loans to the Company or (iii) to make Guaranties of Loans. Each Party shall be personally liable to the other Parties (but not to any third parties) for its pro rata share of the liabilities of the Company (such share to be determined as of the time the liabilities are incurred) based on its Initial Percentage Interest in the Company.

Section 5.8   Expansions or New Projects.

          (a)    Notwithstanding anything to the contrary contained herein, if a new Project (the “New Project”) is proposed to the Company or if any expansion of an existing Project is proposed (the “Expansion”) and the Approval of the Parties is not obtained for the New Project or Expansion due to all objection by one Party (the “Objecting Party”) oil or prior to either (x) approval of commencement of feasibility study for the New Project or Expansion or (y) the vote to approve the New Project or Expansion, then the Parties owning 70% or more of the Percentage Interests (the “70% Shareholders”) shall have the right but not the obligation to proceed with the Expansion or the New Project. If the 70% Shareholders so proceed with a New Project, the New Project shall be done by a new separate company formed by the 70% Shareholders. The Objecting Party shall have no right or interest in or to said new separate company established by the 70% Shareholders or the business thereof.

          (b) (i) If the 70% Shareholders request that any existing Project that is the subject of Expansion be transferred to their separate company, the Company shall be required to transfer the Project to such separate company without delay at the Fair Market Value of such Project.

                     (ii)    If the 70% Shareholders proceed with an Expansion within the Company, the Percentage Interest in the Company of the Objecting Party shall be reduced based on the total yen amount of the Total Interest plus amount of Guaranties of Loans made by such Party as compared with the total yen amount of the Total Interests and Guaranties of Loans of all the Parties- The Objecting Party’s Percentage Interest shall be reduced upon opening of the Expansion, and the 70% Shareholders Percentage Interest shall be increased, to reflect each Party’s percentage of the Total Interest plus amount of Guaranties of Loans made by all Parties as of the opening of the Expansion. The Adjusted Percentage Interests of the Parties shall be expressed in terms of a decimal rounded to the nearest fourth digit. If there is any adjustment of the Percentage Interest of the Parties, any Party whose interest has been adjusted downward shall cause a sufficient number of its shares of Common Stock of the Company to be delivered or transferred, without any compensation by any Party, to the Parties whose interests have been adjusted upward to reflect the Adjusted Percentage Interest. Examples of these adjustments are attached hereto as Appendix I.

          (c)    The new company to be incorporated by the 70% Shareholders to proceed with the New Project or Expansion shall be permitted or granted by the 70% Shareholders the privileges, rights or advantages the same as or identical to those granted to the Company hereunder, including but not limited to the right to use relevant trademarks, without any compensation to the Company, and the Company and the Objecting Shareholder hereby waive any and all rights and objections against the new company.

          (d)    In the event that the Objecting Party shall fall to approve another New Project or Expansion despite approval of the 70% Shareholders, the 70% Shareholders shall have the right but not the obligation, exercisable within six (6) months of such event, to purchase the Total Interest of such Party at the Fair Market Value of such Party’s Total Interest. The closing of such purchase and sale shall take place at the office where the principal place of business of the Company is located oil the tenth business day in Tokyo, Japan after the exercise of said right, unless the Parties agree to a different mutually acceptable date. The form and substance of the closing documents shall be reasonably satisfactory to each of the 70% Shareholders. The purchase price shall be payable by wire transfer of immediately available funds to an account designated by the Objecting Party, against delivery of all the closing documents; provided, however that if the purchase price is a negative figure, the Objecting Party shall pay the 70% Shareholders a sum equal to such negative figure. The instruments and documents shall be legally sufficient to convey all of the Objecting Party’s Total Interest in the Company (and the Project) to the 70% Shareholders (or its nominee or designee), free and clear of all security interests, liens, charges and encumbrances.

          (e)    With respect to the Project which is the subject of Expansion, an Objecting Party shall not have ally further approval rights (including under Section 8.5), rights to make decisions, role in such Project or right to receive payments under the agreements set forth in Appendices B, C, D, E or F to which it is a party with respect to such Project or Expansion.

Section 5.9   Construction Overages, Improvements or Renovations.

          (a)    Notwithstanding anything to the contrary contained herein, if (i) a Construction Overage is incurred, (ii) all operating shortfall occurs or (iii) renovations or improvements to a Project are proposed and the Approval of the Parties is not obtained for ally of these due to an objection by one Party, the Parties owning 60% or more of the Percentage Interests (the “60% Shareholders”) shall have the right but not the obligation to fund the Construction Overage or shortfall or proceed with the renovation or improvements.

          (b)    If the 60% Shareholders so proceed, the Percentage Interest or the Party who did not so approve shall be reduced based oil the total yen amount of the Total Interest plus amount of Guaranties of Loans made by such Party as compared with the total yen amount of the Total Interests and Guaranties of Loans of all the Parties. Such Party’s Percentage Interest shall be reduced and the 60% Shareholders Percentage Interest shall be increased, to reflect each Party’s percentage of the Total Interest plus amount of Guaranties of Loans made by all the Parties as of the Percentage Interest Adjustment Date. The Adjusted Percentage Interests of the Parties shall be expressed in terms of a decimal Founded to the nearest fourth digit. If there is ally adjustment of the Percentage Interest of the Parties, ally Party whose interest has been adjusted downward shall cause a sufficient number of its shares of Common Stock of the Company to be delivered OF transferred, without any compensation by any Party, to the Parties whose interests have been adjusted upward to reflect the Adjusted Percentage Interest.

ARTICLE 6.
DIVIDENDS

Section 6.1   Dividends and Distribution.

          All dividends and distributions made by the Company with respect to Capital Contributions and all repayments of Partner Loans shall be made in accordance with the Percentage Interests of the Parties and shall be declared or made upon the Approval by the Parties. It is the intent of the Parties, to the extent feasible under Law, accounting regulations and good business practice, to distribute available cash to the Shareholders at the earliest possible dates in order to minimize the currency exchange risk to Chelsea.

ARTICLE 7.
COMPANY BOOKS, ACCOUNTING/FINANCIAL STATEMENTS

Section 7.1   Books and Record.

          The Company shall keep books and records at the Company’s principal place of business which are usually maintained by persons engaged in similar businesses, in form and substance Approved by the Parties and setting forth a true, accurate and complete account of the Company’s business and affairs including a fair presentation of all income, expenditures, assets and liabilities thereof Such books and records shall be maintained, and its income, gain, losses and deductions shall be determined and accounted for oil the accrual basis in accordance with generally accepted accounting principles consistently applied in Japan. Each Party and its authorized representatives shall have the right at all reasonable times to have access to, inspect, audit and copy the Company’s books, records, files, employment records, bank statements, bank deposit slips, bank reconciliation’s, cash receipts and disbursement records, and other documents (the “Documents”). Each Party and its authorized representatives shall also have the right, in connection with an examination and audit of the Documents, to question during normal business hours the employees, if any, of the Company and to question any other Person and the employees of such other Person having custody or control of any Documents, or responsibility for preparing the same.

Section 7.2   Tax Returns.

          The Independent Accountants shall either prepare or review and sign, as requested by the Company, the tax returns of the Company, and the Company shall use its reasonable efforts to cause the Independent Accountants to either prepare or review and sign such tax returns and cause such tax returns to be filed on a timely basis with the appropriate governmental authorities.

Section 7.3   Report.

Section 7.4   Audits.

          After the end of each Fiscal Year the Company shall cause all audit to be made by the Independent Accountants covering the assets, liabilities and net worth of the Company and its operations during such Fiscal Year, and all other matters customarily included in such audits. By May 31 of each Fiscal Year, the Company shall deliver, or cause to be delivered to each Party the following financial statements with respect to the Company: a balance sheet and statements of income and expense and cash flow of the Company, and the shareholder equity as of the end of and for the prior Fiscal Year, together with the report of the Independent Accountants covering the results of such audit and certifying such financial statements as having been prepared in accordance with generally accepted accounting principles consistently applied ill Japan. In addition, the Independent Accountant shall deliver to the Board of Directors a management report letter identifying any deficiencies, inconsistencies or problems in the Company’s system of internal controls.

Section 7.5   Bank Accounts.

          All funds of the Company shall be deposited in its name in an account or accounts maintained with a financial institution Approved by the Parties. Funds of the Company shall not be commingled with funds of any other Person. Checks or promissory notes shall be drawn upon the Company account or accounts only for the purposes of the Company and shall be signed by any duly authorized officer or representative of the Company; provided, however, that funds shall only be spent pursuant to applicable Budgets which have been Approved by the Parties or otherwise pursuant to Section 8.4 or 8.7(b)(iii).

ARTICLE 8.
MANAGEMENT OF THE COMPANY

Section 8.1   Board of Directors.

          (a)    General. The Company shall be managed by its Board of Directors. The Shareholders shall vote their shares of Common Stock of the Company and use their best efforts to cause the Board of Directors to consist of nine (9) individuals, three (3) of whom shall be designated by Chelsea, three (3) of whom shall be designated by Mitsubishi and three (3) of whom shall be designated by Nissho. Each of the Parties agrees to vote its shares of Common Stock of the Company in favor of the nominees of the other Parties. In the event that a Party shall wish to remove a director who was nominated by that Party, the other Parties shall vote their shares in favor of such removal. In the event a director nominated by a Party shall cease to be a director for any reason, the other Parties shall vote their shares in favor of the individual whom that Party shall nominate to fill such vacant position. The directors of the Company shall not receive any compensation for their services as directors.

          (b)    Meetings. Regular meetings of the Board of Directors shall be held at the Company’s principal place or business or at such other place as shall be Approved by the Parties and at intervals as may be Approved by the Parties, such intervals to be in all cases less than three months. Dates, times and places of such regular meetings shall be Approved by the Parties. Any Representative Director may call a meeting of the Board of Directors; provided, however, that at least 15 days notice is given of any meeting. The presence in person of a director nominated by each Party shall be required to constitute a quorum for the transaction of business and, subject to the provisions of Section 8.5, may take action only by the affirmative vote of a majority of the directors present at a meeting. If requested by Chelsea, meetings of the Board of Directors may be by video conferencing whereby each director may see and hear each other director.

          (c)    Statutory Audit. The Company shall have at least one statutory auditor. The statutory auditor of the Company shall not receive any compensation for their services as statutory auditor.

Section 8.2   Shareholders.

          Action by the Shareholders of the Company shall be taken as provided by Law or by the Company’s Articles of Incorporation. The presence in person or by proxy of a representative of each Party shall be required to constitute a quorum for the transaction of business at any meeting of Shareholders and any action required to be taken by the Shareholders may only be taken i Shareholders owning 70% or more of the Common Stock shall have approved such actions. The approval of Shareholders of the Company shall be required to amend the Company’s’ Articles of Incorporation. The first general meeting of Shareholders will be held within three months after the end of the first Fiscal Year of the Company. The Company shall give notice thereof at least 30 days prior to the day of the meeting. At the meeting all Shareholders may act by proxy.

Section 8.3   The Officers.

          (a)    Officers. The officers shall be appointed by the Board of Directors. The initial officers of the Company shall consist of the following persons:

          Each party shall use its best efforts to cause its nominees for Directors to vote to elect the Company officers. The Directors may appoint such other officers as they may determine. The President shall have general powers and duties of supervision and direction of the business and employees of the Company. Each of the Chairman, President and Senior Managing Director shall be a Representative Director of the Company. The Chairman, if present, shall preside at all meetings of the Board of Directors and shareholders, otherwise, the President, if present, shall preside.

          (b)    Subject to the provisions of Sections 8.4 and 8.5 hereof, the business and affairs of the Company shall be managed by its officers. The Officers may delegate their functions to other employees and representatives of the Company.

Section 8.4   Authorization for Expenditures.

          (a)    During the Construction Period, the Company shall review the applications for payment submitted by the general contractor, confirm that all applications for payment are in the form required by the construction contract, and advise the architect and/or engineer (based solely oil the Company’s observations and best judgment based on its review of submitted documentation and on-site inspections) as to the amount of work the Company believes is complete and for which the general contractor is due payment. The Company shall have the right, without obtaining the Approval of the Parties, to approve change order which, in the opinion of the general contractor, are required to avoid an imminent risk of injury or death to persons or damage to property and change orders which do not constitute a Material Change Order. The Company shall obtain prior Approval of the Parties; (i) if the aggregate total of change orders is less than or equal to 60 million yen, then as to any single change order the amount of which shall be greater than or equal to the greater of (a) 10% of any line item total of the Development Budget that the change order affects and (b) 12 million yen; and (ii) if the aggregate total of change orders exceeds 60 million yen, then as to all such change orders (hereinafter any of the change orders for which the Approval of the Parties is required is referred to as a “Material Change Order”).

          (b)    During the Operating Period, except for expenditures made and obligations incurred pursuant to a Budget, as revised or exceeded pursuant to Section 5.4(g) or 8.7(b)(iii), or pursuant to Section 5.9, the Company shall not make any expenditure or incur any obligation unless previously approved as provided herein, provided that the Company shall have the right, without such approval, to make expenditures and incur obligations not authorized by a Budget (i) to the extent necessary to pay utilities, taxes, and insurance premiums to the extent such charges exceed the amounts budgeted therefor in the applicable Budget, (ii) to pay for other non-capital expenditures in an amount up to 10% or cumulative expenditures of 6 million yen (whichever is less) in excess of the amount authorized for each Project under the applicable Budget for such expenditures, (iii) to pay for annual capital expenditures for each Project of up to 12 million yen in the aggregate for items not contemplated in, or in excess of amounts reserved for certain line items in, the applicable Budget or (iv) to take such actions and make such emergency expenditures as it, in its reasonable judgment, deems necessary for the protection of life or health or the preservation of Company assets if, under the circumstances, in the good faith estimation of the Company, there is insufficient time to allow the Company to obtain the necessary approval of such action, a good faith attempt has been made to contact the other Parties and any delay would materially increase the risk to life or health or materially increase the magnitude or likelihood of property damage or other potential loss involved; provided, however, that the Company shall notify the other Parties of such action contemporaneously therewith or as soon as reasonably practicable thereafter. In any event, the Company shall not expend more than the amount the Company in good faith believes to be the fair and reasonable market value at the time and place of contracting for any goods purchased or services engaged oil behalf of the Company and shall, upon request, provide the other Parties with reasonable documentation evidencing such expenditures.

Section 8.5  Major Decisions.

          All Major Decisions with respect to the Company’s business and operations shall require the Approval of the Parties. As used herein, the term “Major Decisions” shall mean the following decisions regarding the acquisition, development, ownership, management, leasing and operation of a Project, except those matters expressly delegated to the Developer and/or its Affiliate pursuant to the terms of this Agreement or the Development Agreement. Accordingly, if a decision is identified as a Major Decision, no Party shall have the right or the power to make any commitment or engage in any undertaking on behalf of the Company with respect to a Major Decision unless and until the same has been Approved by the Parties. The Parties hereby approve Project I and Project 2 in accordance with the Budgets set forth oil Appendices H I and H2, respectively. Without the Approval of the Parties, no Party shall cause the Company to:

Section 8.6  Authorized Acts.

          No Party shall be liable to the Company or to any other Party for any act performed, or omitted to be performed, by it in the conduct of its duties as a Party, if such act or omission is within the scope of authority of such Party hereunder and if such act or omission is not performed or made fraudulently or in bad faith. The Company shall indemnify and save harmless each Party from all personal liability, loss, cost, expense or damage incurred or sustained by reason of any act performed, or omitted to be performed, by it in the permitted conduct of its duties hereunder except for acts or omissions done or made fraudulently or in bad faith. Such indemnity, or the denial thereof, shall not be construed to limit or diminish the coverage of any Party under any insurance effected or maintained by the Company.

Section 8.7  Budgets.

          (a) The Company shall, by Approval of the Parties, establish a Company Budget and a Pre-Construction Budget and a Development Budget for each Project, which Budgets the Parties acknowledge are subject to change only as Approved by the Parties. The Development Budget is intended to cover all expenditures of a Project through the completion of construction of such Project, including, without limitation, those expenditures included in a Pre-Construction Budget for such Project. No later than sixty (60) calendar days prior to the Project Completion Date, the Company shall submit to the Parties a proposed Operating Budget for the then remaining Fiscal Year covering anticipated expenses of the Company in owning, operating and maintaining such Project. No later than sixty (60) days prior to the commencement of each Fiscal Year the Company shall submit to the Parties a proposed Operating Budget for such Fiscal Year for such Project.

          (b) After submission of the proposed Operating Budgets to the Parties, the following procedures shall be followed in adopting such Operating Budgets:

          (c) The Company may from time to time submit to the Parties revisions to an approved Operating Budget for their approval. The Parties shall promptly reject or approve the same or make such changes to the proposal as they may deem reasonably necessary and proper within the time frame contemplated by subparagraph (b) hereof If the Parties fail to approve or reject any proposed revisions or to suggest additional modifications thereto within twenty (20) calendar days after submittal to the Parties, then such revisions shall be deemed Approved by the Parties. The proposal, as finally approved or changed by the Parties, shall be incorporated into and become part of such Budget for the remaining period of the Fiscal Year in question.

Section 8.8  Developer and Development Agreement.

          Unless the Parties otherwise agree, it is intended that a Developer will be appointed for each Project. Mitsubishi and Nissho shall be the Developer of Project I and the Parties presently intend to appoint Mitsubishi and Nissho as the Developer of other Projects. If an Affiliate of a Party or a Party is to render services to the Company in connection with the initial development or redevelopment of a Project, then the Parties shall, by Approval of the Parties, approve a Development Agreement with such Affiliate or Party who shall be designated as the “Developer” thereunder.

Section 8.9  Fees and Expense Reimbursements for Parties.

          While it is contemplated that the Company shall be primarily responsible for implementing the decisions of the Parties and carrying out their directives with respect to the acquisition, development, construction, leasing and management of each Project, the Parties acknowledge that they or their Affiliates will both render valuable services to the Company in connection with a Project. The Parties, or such Affiliates, shall be compensated for such services in the form of fees, cost recoveries, expense reimbursements or other means in amounts and upon such other terms and conditions as are set forth in the Development Budget and the Operating Budgets Approved by the Parties, and subject to Section 9.1 hereof

ARTICLE 9.
COMPENSATION, REIMBURSEMENTS. CONTRACTS WITH AFFILIATES

Section 9.1  Compensation Reimbursement.

          (a)  Compensation.  Except as may be expressly provided for in this Section 9.1 or in the agreements referred to in Section 9.2, or in another written agreement Approved by the Parties, no payment will be made by the Company to any Party for the services of such Party or any Party’s shareholders, directors or employees, or Affiliate of such Party.

          (b)  Reimbursements.

          (c)  Consulting Fee. The Company shall pay to each Party consulting fees as set forth in Appendix C attached hereto.

          (d)  Development Fee. The Company shall pay to the Developers a fee as set forth in the Development Agreement.

          (e)  License Fee. The Company shall pay to Chelsea a licensing fee as set forth in the License Agreement.

          (f)  Management Advisory Service Fee. The Company shall pay to Mitsubishi and Nissho a management advisory service fee as set forth in the Management Services Agreement.

          (g)  Advisory Services Fee. The Company shall pay to Chelsea an advisory service fee as set forth in the Advisory Services Agreement.

          (h)  Guaranty Fee. The Company shall pay to each Party which guarantees a Third Party Loan an annual amount equal to 1% of the averaged daily balance of the principal amount of the Third Party Loan outstanding during each Fiscal Year, which amount will be paid within 60 days after the end of each Fiscal Year.

Section 9.2  No Contracts with Affiliates.

          Except as provided in Sections 8.3 and 8.8, no Party shall enter into any agreement or other arrangement for the furnishing to or by the Company of goods or services with any Person who is an Affiliate of such Party unless such agreement or arrangement has been Approved by the Parties after the nature of the relationship or affiliation has been disclosed.

ARTICLE 10.
SALE, TRANSFER OR MORTGAGE

Section 10.1  General.

          Except as expressly permitted in this Agreement, no Party shall, directly or indirectly, sell, assign, transfer, mortgage, convey, charge or otherwise encumber or contract to do or permit any of the foregoing, whether voluntarily or by operation of law (herein sometimes collectively called a “Transfer”), or suffer any Affiliate or other third party to, Transfer any part or all of its Total Interest hereunder without the express prior written consent of the other Parties, which consent may be withheld for any or no reason whatsoever. Any attempt to Transfer in violation of this Article 10 shall be null and void. The giving of consent in any one or more instances of Transfer shall not limit or waive the need for such consent in any other or subsequent instances. For purposes of this Agreement, Transfer shall include (a) the acquisition by a Person of fifty percent (50%) or more of the capital stock of Mitsubishi or Nissho, (b) the merger, consolidation or combination of Mitsubishi or Nissho with another Person in which Mitsubishi or Nissho is not the survivor, (c) the sale of all or substantially all the assets of Mitsubishi or Nissho or (d) a change in the majority of the directors or managers of Mitsubishi or Nissho which has not been approved by the then existing directors or managers.

Section 10.2  Permitted Transfers by the Parties.

          (a)  Transfers By Chelsea.  Without the consent of the other Parties, Chelsea may from time to time (1) Transfer its Total Interest, in whole or in part (1) to a Chelsea Affiliate or (ii) from a Chelsea Affiliate to another Chelsea Affiliate and (2) Transfer up to 50% of its Total Interest to Simon Property Group Inc. or all Affiliate thereof, provided, however, that (x) Chelsea shall continue to exercise all rights and powers under this Agreement and Simon Property Group Inc. or its Affiliate shall not participate in the management of the Company or be required to approve or consent to any transaction and (y) Chelsea shall continue to remain responsible for all its obligations hereunder. In addition, the acquisition by merger, sale of assets, combination or consolidation of Chelsea GCA Realty, Inc. by any Person shall not constitute a Transfer under this Agreement. Any Transfer under Section 10.2(a) shall not relieve Chelsea of its obligations under this Agreement.

          (b)  Transfers by Mitsubishi.  Without the consent of the other Parties, Mitsubishi may from time to time Transfer its Total Interest, in whole or in part (i) to a Mitsubishi Affiliate or (ii) from a Mitsubishi Affiliate to another Mitsubishi Affiliate. Any Transfer under Section 10.2(b) shall not relieve Mitsubishi of its obligations under this Agreement.

          (c)  Transfers by Nissho.  Without the consent of the other Parties, Nissho may from time to time Transfer its Total Interest, in whole or in part (i) to a Nissho Affiliate or (ii) from a Nissho Affiliate to another Nissho Affiliate. Any Transfer under Section 10.2(c) shall not relieve Nissho of its obligations under this Agreement.

          (d)  Agreements with Transferees.

Section 10.3  First Right of Refusal Procedure.

          (a)  First Refusal Notice.  Except as provided in Section 10.2, Section 10.5 or Section 10.6, if, subsequent to five (5) years after the date hereof, any Party desires to sell all of its and its Affiliates’ Total Interest in the Company it shall give written notice (the “First Refusal Notice”) of such intention to the other Parties (the Party issuing the First Refusal Notice is hereinafter called the “Offeror” and the Parties receiving the First Refusal Notice are hereinafter called the “Offerees”). The First Refusal Notice must set forth (i) the price (the “Refusal Price”) and terms upon which the Offeror has received a bona-fide, third party, arms-length offer to purchase such Total Interest (the Total Interest in the Company subject to the First Refusal Notice is hereinafter called the “Subject Interest”) subject to all liabilities of the Company as of that date, (ii) a copy of such third-party offer, and (iii) the name and address of the proposed purchaser (the “Purchaser”), provided, that the Offeror shall deal with only one Purchaser at a time and the Purchaser shall not be an Affiliate of the Offeror. The Refusal Price set forth therein must be payable with cash consideration only, although, at the Offeror’s election, payment of portions of such cash consideration may be deferred and paid, with interest, in one or more installments after closing. If the First Refusal Notice provides that payment of a portion of the Refusal Price is to be deferred, then the required collateral for such deferred payment shall be described in the First Refusal Notice and shall be the Subject Interest to be purchased and/or a certificate of deposit, irrevocable stand-by letter of credit, or other type of collateral which is generally available, liquid, and not unique. Such First Refusal Notice shall constitute an offer by the Offeror to sell to the Offerees the Subject Interest specified in the First Refusal Notice for such price and terms, exclusive of any brokerage or similar commission provided for therein. Except as set forth in Section 10.5 or Section 10.6, none of the Parties may give a First Refusal Notice until at least five (5) years from the date of this Agreement.

          (b)  Election by Offerees.

          (c)  Closing.

          (d)  Sale of Total Interest by Offerees to Third Party.

          (e)  Sale of Subject Interest to Third Party.

          (f)  Reinstatement of First Refusal Procedure. In the event the Offeror fails within the time specified in Section * 10.3(d) or Section 10.3(e), as applicable, to consummate such proposed sale, through no fault of the Offerees, the Offeror shall reimburse the Offerees for the above described costs and shall, prior to any subsequent proposed sale of the Subject Interest, be required to extend to the Offerees, and the Offerees shall have, the rights of First Refusal set forth in tills Section 10.3. Except as otherwise permitted by this Agreement, any Transfer by any Party of its Total Interest or any portion thereof in violation of the restrictions and procedures set forth in this Section 10.3 shall be void.

          (g)   Approval by the Board of Directors. Each of the Parties shall cause such directors of the Company as shall be nominated by it to approve at the meeting of the Board of Directors of the Company the transfer of the Common Stock (as part of Subject Interest or Total Interest or otherwise) as permitted under this Section 10.3 or elsewhere in this Agreement.

Section 10.4  Election Not to Proceed with Project.

          (a)  Notwithstanding anything to the contrary set forth elsewhere in this Agreement, if a Party elects (the “Non-Investing Party”), at its sole option, not to proceed with Project I or Project 2 by sending a written notice to such effect to the remaining Parties (the “Investing Parties”), then the Investing Parties shall have the right (pro rata in accordance with their Percentage Interests or as agreed to by them) but not the obligation to purchase the Non Investing Party’s Total Interest in the Company at a price equal to lower of (x) the total amount of Capital Contributions and Partner Loans which had been contributed or made to the Company by the Non-Investing Party at that point in time, less the amount of any distributions or dividends or repayments of Partner Loans previously made to the Non-Investing Party and (y) the Fair Market Value of the Non-Investing Party’s Total Interest. Any such election to purchase the interest of the Non-Investing Party will be made in accordance with the procedures set forth in Section 10. 3 (c).

          (b)  If the Investing Parties shall not exercise the right granted under Section 10.4(a) within thirty (30) days after their receipt of the notice from the Non-Investing Party, the Non-Investing Party shall be required to make the required Partner Loan, if any shall be required to be made at that time, within thirty (30) days from the end of such thirty (30) day period. If the Non-Investing Party fails to make the required Partner Loan within such thirty (30) day period, then the Non-Investing Party shall become, and be deemed as, a Non-Funding Party and Section 5.5 shall apply.

Section 10.5  Sale of the Company.

          If the 70% Shareholders as defined in Section 5.7, wish to sell all or substantially all of the assets of the Company or a Project, despite a rejection at a meeting of the Board of Directors, then the 70% Shareholders shall send notice thereof to the Shareholder who has not approved such sale (the “Purchasing Shareholder”). For a period of twenty (20) days following the date of receipt by the Purchasing Shareholder of such notice, the Purchasing Shareholder may accept to purchase Total Interests of the 70% Shareholders at a the price set by the 70% Shareholders in such notice sent by the 70% Shareholders to the Purchasing Shareholder. If the Purchasing Shareholder fails to send such notice within such 20 day period, it shall be deemed to have elected not to purchase, and the 70% Shareholders may effectuate the sale of their Total Interests, provided, however, that if such sale is consummated within six (6) months thereafter, it may only be at a price in excess of the purchase price set in their notice and after six (6) months may be sold at any price. If the Purchasing Shareholder accepts the 70% Shareholders’ offer, the closing shall occur in accordance with the procedures set forth in Section 103(c).

Section 10.6  Lack of Profits.

          If for the first three full consecutive Fiscal Years after the Project Completion Date of Project 1, the Company has not had any “earnings” (as defined below), the Parties shall have good-faith discussions to develop a solution to resolve the situation, upon the request of any Party. If no solution is reached despite such good-faith discussions within ninety (90) days after the end of such Fiscal Year, any Party (the “Selling Shareholder”) may offer during the period of twenty (20) days following the 90 day period after the end of such third Fiscal Year to sell its Total Interest in the Company to the other Shareholders at a price set by the Selling Shareholder in such notice. The other Shareholders shall have the right, but not the obligation, to accept any such offer. If no notice is sent by any Shareholder within such 20 days, the right contained herein shall be null and void and of no further effect. If the Shareholders accept the offer, the closing shall occur in accordance with the procedures set forth in Section 10.3(c). If the Shareholders do not accept such offer, the Selling Shareholder may, at its sole option, (i) sell its Total Interest only at a price in excess of that set by the Selling Shareholder, provided, however, that the sale shall be consummated within four (4) months after the expiration of such 20 days, and provided further that the purchaser shall not be a competitor of either Shareholder or the Company and in the exercise of the reasonable determination of the Shareholders the purchaser shall have the financial capability to fulfill its obligations to the Company and shall be of a quality and reputation consistent with that of the Shareholders and the Company; or (ii) by sending a notice to the other Shareholders in accordance with Section 12.2, relinquish all of its Common Stock to the other Shareholders and transfer the same pro rata in accordance with their Percentage Interests at no cost to such Shareholders within four (4) months after the expiration of such 20 days. If the Selling Shareholders exercised its option (ii) above, (x) it shall be released from any further obligation or liability hereunder or in connection with the Company which will accrue after the date of the notice, (y) the Guaranties of Loans given by it up to the date of the notice shall continue to be effective in accordance with their terms and conditions, and (z) its Partner Loans extended up to the date of the notice shall be repaid in accordance with their terms and conditions and pari passu with the Partner Loans extended by the other Shareholders. For the purpose of this Section 10.6, the term “earnings” shall mean the “income before taxes” as appearing in the income statements for the three Fiscal Years as shall be prepared by the Company in accordance with generally accepted Japanese accounting principles, plus (i) all the interest of Partner Loans accrued to the Parties, (ii) all the depreciation or amortization expenses, and (Hi) all the fees listed under Section 9.1 accrued to the Parties in such Fiscal Years.

ARTICLE 11.
DISSOLUTION

Section 11.1  Dissolution and Liquidation Continuation of Business.

          (a)  Causes of Dissolution and Liquidation. Except as set forth in this Article II and Article 10, no Party shall have the right and each Party hereby agrees not to withdraw from the Company, nor to dissolve or liquidate, or to petition a court for the dissolution or liquidation of the Company, except as provided in this Agreement, and no Party at any time shall have the right to petition or to take any action to subject the Company’s assets or any part thereof, including any Project, or any part thereof, to the authority of any court of bankruptcy or similar proceedings. The Company shall be dissolved and liquidated only upon the earliest occurrence of any of the following dates or events:

          For the purposes of this Agreement, the term “Bankruptcy” shall mean, and the Party shall be deemed “Bankrupt” upon, (i) the entry of a decree or order for relief of the Party by a court of competent jurisdiction in any involuntary case involving the Party under any bankruptcy or other similar law now or hereafter in effect, (ii) the ordering of the winding up or liquidation of the Party’s affairs; (Hi) the filing with respect to the Party of a petition in any such involuntary bankruptcy case, which petition remains undismissed for a period of ninety (90) days; (iv) the commencement by the Party of a voluntary case under any bankruptcy or other similar law now or hereafter in effect; (v) the making by the Party of any general assignment for the benefit of creditors; or (vi) the failure by the Party generally to pay its debts as such debts become due.

          (b)  Right to Continue Business of the Company. Upon all event described in Section 11. 1 (a), the Company thereafter shall be dissolved and liquidated unless, within ninety (90) days after the event described in such Section, an election to continue the business of the Company shall be made in writing by the remaining Parties holding fifty percent (50%) or more of the Percentage Interests. If such ail election to continue the Company is made, then the Company shall continue until another event causing dissolution in accordance with this Article II shall occur and the Parties who elect to continue shall have the right, but not the obligation, to cause the non-continuing Party’s Percentage Interest to be sold in accordance with the procedure set forth in Section 10.3 hereof.

          (c)  Termination by Material Breach.

Section 11.2  Procedure in Dissolution and Liquidation.

          (a)  Winding Up.  Upon dissolution of the Company pursuant to Section 11.1 hereof, the Company shall immediately commence to wind up its affairs and the Parties shall proceed with reasonable promptness to liquidate the business of the Company and (at least to the extent necessary to pay any debts and liabilities of the Company) to convert the Company’s assets into cash. A reasonable time shall be allowed for the orderly liquidation of the business and assets of the Company in order to reduce any risk of loss that might otherwise be attendant upon such a liquidation.

          (b)  Management Rights During Winding Up.  During the period of the winding up of the affairs of the Company, the Board of Directors shall manage the Company as liquidator and shall make with due diligence and in good faith all decisions relating to the conduct of any business or operations during the winding up period and to the sale or other disposition of Company assets; provided, however, that if the termination of the Company results from a default by a Party of its obligations under this Agreement, such Party shall have no further right to participate in the management or affairs of the Company and the other Parties shall manage the Company during the period of winding up. Each Party hereby waives any claims it may have against the others that may arise out of the management of the Company by the other, pursuant to this Section 11.2(b), so long as such other Party and its representatives act in good faith.

          (c)  Work in Progress.  If the Company is dissolved for any reason while there is development or construction work in progress, winding up of the affairs and termination of the business of the Company may include completion of the work in progress to the extent the Parties who have not defaulted under their obligations under the Agreement, may determine the same to be necessary to permit a sale or other disposition of the Projects which is most beneficial to the Parties.

          (d)  Distributions in Liquidation.  The assets of the Company shall be applied or distributed in liquidation in the following manner and in the following order of priority:

          (e)  Non-Cash Assets.  Every reasonable effort shall be made to dispose of the assets of the Company so that the distribution may be made to the Parties in cash. If at the time of the termination of the Company, the Company owns any assets in the form of work in progress, notes, deeds to secure debt or other non-cash assets, such assets, if any, shall be distributed in kind to the Parties, in lieu of cash, proportionately to their right to receive the assets of the Company on an equitable basis reflecting the Fair Market Value of the assets so distributed. In the alternative, the Parties may cause the Company to distribute some or all of its non-cash assets to the Parties as tenants-in-common subject to such terms, covenants and conditions as the Parties may adopt.

Section 11. 3  Disposition of Documents and Record.

          All Documents of the Company shall be retained upon termination of the Company for a period of not less than ten (10) years by a Person mutually acceptable to the Parties. The costs and expenses of personnel and storage costs associated therewith shall be shared by the Parties equally. The Documents shall be available during normal business hours to all Parties for inspection and copying at such Party’s cost and expense. If any Party for any reason ceases as provided herein to be a Party at any time prior to termination of the Company (“Non-Surviving Party”), and the Company is continued without the Non-Surviving Party, the other Parties (“Surviving Party”) agree that the Documents of the Company up to the date of the termination of the Non-Surviving Party’s interest shall be maintained by the Surviving Party, its successors and assigns, for a period of not less than ten (10) years thereafter.

Section 11.4  Date of Termination.

          The Company shall be terminated when its cash and other assets have been applied and distributed in accordance with the provisions of Section I 1.2(d) and the termination is registered at the commercial registration maintained by the relevant legal affairs bureau.

ARTICLE 12.
GENERAL PROVISIONS

Section 12.1  Jurisdiction.

          The Parties hereby agree to the exclusive jurisdiction of the Tokyo District Court as the first instance court with respect to any and all disputes and controversies relating to the interpretation, construction, performance or breach of this Agreement or the Appendices.

Section 12.2  Notices.

          Any notice, consent, approval, or other communication which is provided for or required by this Agreement must be in writing and may be delivered in person to any Party or may be sent by a facsimile transmission, telegram, courier or registered or certified mail, with postage prepaid, return receipt requested. Any such notice or other written communications shall be deemed received by the Party to whom it is sent (i) in the case of personal delivery, on the date of delivery to the Party to whom such notice is addressed as evidenced by a written receipt signed oil behalf of such Party, (ii) in the case of facsimile transmission or telegram, the next business day after the date of transmission, (iii) in the case of courier delivery, the date receipt is acknowledged by the Party to whom such notice is addressed as evidenced by a written receipt signed on behalf of such Party, and (iv) in the case of registered or certified mail, the earlier of the date receipt is acknowledged oil the return receipt for such notice or five (5) business days after the date of posting by the post office. For purposes of notices, the addresses of the Parties hereto shall be as follows, which addresses may be changed at any time by written notice given in accordance with this provision.

          If to Mitsubishi:

          With a copy to:

          If to Chelsea:

          With a copy to:

          If to Nissho:

Section 12.3  Entire Agreement.

          This Agreement (including all Appendices referred to herein and attached hereto, which Appendices are part of this Agreement for all purposes) contains the entire understanding among the Parties with respect to the Company and supersedes any prior understanding and agreements among them respecting the Company. There are no representations, agreements, arrangements or understandings, oral or written, among the Parties relating to the subject of this Agreement which are not fully expressed herein.

Section 12.4  Severability.

          This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable Laws of Japan. If any provision of this Agreement, or the application thereof to any Person or circumstances shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by Law; provided, however, that the above-described invalidity or unenforceablilty does not diminish in any material respect the ability of the Parties to achieve the purposes for which the Company was formed.

Section 12.5  Successors and Assigns.

          Subject to the restrictions on Transfer set forth in Article 10, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties.

Section 12.6  Counterparts.

          This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same agreement.

Section 12.7  Additional Documents and Act.

          In connection with this Agreement, as well as all transactions contemplated by this Agreement, each Party agrees to execute and deliver such additional documents and instruments 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.

Section 12.8  Interpretation.

          This Agreement and the rights and obligations of the Parties shall be governed by and interpreted and enforced in accordance with the Laws of Japan. This Agreement has been executed in the English language which shall be the binding and controlling language for all matters relating to the meaning or interpretation of this Agreement.

Section 12.9  Term.

          Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter singular, and plural, as the identity of the Persons may in the context require. Any reference to Laws shall include all amendments, modifications, or replacements of the specific sections and provisions concerned.

Section 12. 10  Amendment.

          This Agreement may not be amended, altered or modified except by an instrument in writing and signed by the Parties.

Section 12. 11  References to this Agreement.

          Numbered or lettered articles, sections and subsections herein contained refer to articles, sections and subsections of this Agreement unless otherwise expressly stated. The words “herein,” “hereof,” “hereunder,” “hereby,” “this Agreement” and other similar references shall be construed to mean and include this Agreement and all amendments thereof and Exhibits thereto unless the context shall clearly indicate or require otherwise.

Section 12.12  Headings.

          All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement.

Section 12.13  No Third Party Beneficiary.

           This Agreement is made solely and specifically among and for the benefit of the Parties and their respective successors and permitted assigns subject to the express provisions hereof relating to successors and assigns, and no other Person whatsoever shall have any rights, interest, or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.

Section 12.14  No Waiver.

          No consent or waiver, either expressed or implied, by any Party to or of any breach or default by any other Parties in the performance by such other Parties 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 Parties of the same or any other obligations of such other Parties under this Agreement. Failure on the part of any Party to complain of any act or failure to act of any other Parties, failure oil the part of any complaining Party to continue to complain or to pursue complaints with respect to any act or failure to act of any other Parties, or failure oil the part of any Party to declare any other Parties in default, irrespective of how long such failure continues, shall not constitute a waiver by such Party of the rights and remedies thereof under this Agreement or otherwise at law or in equity.

Section 12.15  Time of Essence.

          Time is of the essence in this Agreement.

Section 12.16  Attorney's Fees.

          The prevailing party in any litigation initiated to interpret and/or enforce the provisions of this Agreement shall be entitled to reasonable attorney’s fees and costs.

          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives, each on the day and year first above written.